High grades confirmed at VenCan’s Edwards play — Company and former director to meet in court

Underground sampling by VenCan Gold (VCGMm) has confirmed the grade and continuity of two mineralized zones at its Edwards gold project, near Wawa, Ont.

The project is being managed by River Gold Mines (RIV-T) under the terms of a 1996 agreement. Profits from processed material are to be split evenly after the deduction of River’s development and production costs.

The weighted average of sample assays taken from 685 ft. of development drifting at a depth of 200 ft. yielded 0.841 oz. gold per ton across an average drift width of 8.2 ft. Sample assays taken across a mining width of 4.26 ft., along the same 685-ft. length, yielded an average of 1.03 oz.

A report by Bruce Edgar, VenCan’s consulting geologist, states that the drift sections grade 1.97 oz. across a sampling width of 5 ft. and a length of 439 ft.

The company says the project “continues to demonstrate strong economic potential.” Production is well under way at Edwards, with three stopes under development. An estimated 40,000 tons will be shipped to River’s Magnacon mill by the end of June. Milling is scheduled for July and August.

Meanwhile, the company reports it will appear in court Sept. 29 to defend itself against a $75-million breach-of-contract suit filed by a company controlled by Robert Hill, a former VenCan director.

Hill claims his right of first refusal on the Edwards property was ignored by VenCan when it closed a deal with River Gold.

VenCan’s management considers the lawsuit to be without merit, describing the claim as “fanciful.”

VenCan earned $531,000 (or 5 cents per share) during the 6-month period ending Jan. 31, 1997, compared with a loss of $92,000 (1 cents per share) for the same period last year. Total revenue of $1.2 million included $1.2 million generated from the sale of 720,000 shares of Chesbar Resources (CBI-M) at an average share price of $1.64. As of Jan. 31, VenCan still held 280,000 Chesbar shares.

VenCan management estimates that VenCan’s 50% share of net profits from the Edwards mine will generate $2 million in 1997.