Fargo, Brenda reach agreement on kaolin project

An agreement has been finalized by Fargo Resources and Brenda Mines covering the Lang Bay kaolin property at Powell River, B.C.

Brenda, a member of the Noranda group, may earn a 50% interest in the property by providing 100% of the exploration and development costs through to production. Brenda is committed to spending a minimum of $200,000 and has paid Fargo $100,000 towards the current exploration program.

The overall exploration program is estimated to cost $3 million with the cost of production at $28 million. Once the project is into production, Brenda will receive 80% of the output until it recoups its production-cost investment. During this period, Fargo’s share will be 20%. Once Brenda recovers its investment, output will be split on a 50/50 basis.

Kaolin, which has about 300 practical applications, is used in North America mainly as a filler and coater in the manufacture of paper.

The current exploration program has defined one million tons of mineable reserves of white filler grade kaolin and grey cement/ refractory grade kaolin. The drilling will continue into the next phase, with the objective of delineating about 16 million tons of recoverable kaolin for open-pit development.

The project will be managed by a four-man committee consisting of two representatives from each of Brenda and Fargo. James Currie, Brenda’s chief engineer, will act as exploration manager and supervise the project through exploration and the feasibility stage.

The companies note Brenda’s affiliation with MacMillan Bloedel, through their common ownership by Noranda Inc. With the paper industry in the Pacific northwest projected to be a large consumer of kaolin, it is expected the Lang Bay property will be ideally suited to supply the product.