JUNIOR MINING — Juniors display varied exploration

The strategies employed in searching for mines vary from company to company. Among other factors, they are determined by company size, financial clout and management’s view as to which minerals offer the best prospects.

Although it has a diverse portfolio of properties throughout North America, Equinox Resources (TSE) plans to focus on gold exploration in the coming year — particularly in Nevada. President Ross Beaty believes gold is the best commodity for young, aggressive mining companies to seek and develop. And he noted that more gold discoveries have been made in Nevada in the past 10 years than anywhere else in the world.

Equinox’s strategy is to bring in joint-venture partners to fund work on its projects. Major third-party-funded programs will be carried out this year on at least 17 of its properties, most of them in Nevada. Expenditures on such programs in the state are expected to total about $1 million this year, only $300,000 of which will be funded by Equinox.

On the other hand, Cominco Resources International (TSE) is, as its name implies, mainly interested in projects outside North America. Its mandate is to focus internationally on geological environments that potentially host large deposits of above-average grade. The company expects to spend more than $15 million in joint-venture funds this year, of which it will directly fund only $5.7 million. Metals of interest are copper, gold and zinc with a current emphasis on exploration in Chile and Turkey.

Aside from a flood of exploration dollars flowing into the search for diamonds, much of the junior exploration money in Canada is focused on known mineral systems.

John Greig, president of Redfern Resources (TSE), said his company plans to focus this year’s efforts outside of known reserves at its Tulsequah chief mine in northwestern British Columbia. The former producer hosts a large massive sulphide system and Redfern has identified massive sulphide targets on surrounding ground. The budget for this season’s work will be about $4 million, Greig said.

Greig is also a director of Cumberland Exploration (VSE) which recently acquired a large position in the Northwest Territories from Asamera Minerals. Contrary to most companies’ interest in the north, Cumberland is focusing on the gold potential of three acquired interests, including 60% in the Meadowbank River project and 50% in each of the Meliadine River and Parker Lake projects. Expenditures are expected to reach about $600,000 this year, most of which will be spent on the Meliadine River project where 900,000 tons grading 0.29 oz. gold per ton have been outlined, Cumberland reports. Greig also wears the hat of secretary of internationally focused Sutton Resources (VSE). James Sinclair, president of the company, steers the firm into projects based not only on their individual merits but primarily on the merits of the country of origin. In selecting projects, Sinclair considers the country’s attitude to foreign investment, its political stability and its natural resource potential.

Sutton’s major asset is property holdings covering an emerging nickel-cobalt belt in northwestern Tanzania. (BHP Minerals International can earn a majority interest in any mine developed on the ground by funding all exploration and development work to a production decision.) Work to date on the Kabanga nickel deposit has identified a drill-indicated inventory of more than 25 million tons grading 1.19% nickel, 0.2% copper and 0.10% cobalt based on a cutoff of 0.5% nickel. Additional work is planned on Kabanga as well as on the Kagera concession which covers more than 10,000 square miles to the north.

Exploration is also under way at Sutton’s 100%-owned Marudi project in south-central Guyana where a preliminary open-pit reserve of about 6.7 million tons grading 0.065 oz. gold has been outlined.

Instead of so-called grassroots projects, the Hunter/Dickinson group tends to focus on upgrading known resources with an emphasis on large, open-pit-style copper-gold deposits. Headed by Robert Hunter and Robert Dickinson, the group met with considerable success developing the Mount Milligan project near Prince George, B.C., through Continental Gold. Continental, along with 30% partner BP Canada, outlined a minable reserve of about 313 million tons grading 0.20% copper and 0.017 oz. gold. Placer Dome (TSE) bought the project in 1989 for about $260 million, netting Continental shareholders a tidy windfall.

The team has three projects on the go through three separate companies including Taseko Mines (VSE), El Condor Resources and Pacific Sentinel Gold (VSE). The ultimate goal is eventually to sell each project to a third party, mirroring the strategy used successfully at Mt. Milligan.

Taseko is completing a feasibility study on its Fish Lake project in south-western British Columbia; if a buyer is found, proceeds will be split with part-owner Cominco (TSE), according to a scaled formula. The group’s focus is on Pacific Sentinel Gold and its Casino copper-gold-molybdenum project in the southern Yukon. The company is planning to spend about $7.2 million this year on the project to expand preliminary reserves, now estimated at 417 million tons grading 0.30% copper, 0.038% moly and 0.01 oz. gold.

El Condor, with 40% joint-venture partner St. Philips Resources (VSE), plans to spend about $1 million this year on the South Kemess property in north-central British Columbia. The program will include completing a prefeasibility study on the Kemess South deposit which contains an estimated minable reserve of 213 million tons grading 0.23% copper and 0.019 oz. gold. The companies also plan to drill 12 widely spaced holes to test for a possible fault-offset to the Kemess South deposit.