McAdam, Stoch in dispute over McWatters gold mine

A dispute has arisen between Toronto-based McAdam Resources (TSE) and Jack Stoch Geoconsultants over who owns the old McWatters gold mine near Rouyn- Noranda, Que.

In October 1986, McAdam agreed to pay vendor Jack Stoch $500,000 over three years, 250,000 shares of McAdam and spend $500,000 annually on the property for five years in return for the property.

However, Stoch recently returned McAdam’s final option payment claiming that it wasn’t made properly.

While Stoch has asked for the property to be returned to it, McAdam’s chief financial officer Joe Edmunds said the company would “vigorously defend its right to own the project.”

Since optioning the Rouyn-Noranda property three years ago, McAdam has doubled the reserves to 910,869 tons of grade 0.19 oz. gold per ton but underground exploration was stopped last spring before a prefeasibility study could be completed.

McAdam intends to resolve the dispute through an arbitration process. “We believe our position is valid,” said Edmunds.

Also, McAdam says it is continuing to obtain encouraging results while panel sampling and exploration drifting on the 7A level at the Spud Valley gold project on Vancouver Island.

Panel sampling on the back of the exploration drift on the Linton North vein returned 0.53 oz. over a 4-ft. width for a distance of 34 ft., the company said.

Results from drifting on the 7A sublevel yielded 136 ft. of grade 0.48 oz.

Better than 90% recoveries are being achieved during test milling of lower-grade surface stockpiled material. “Recoveries will be even higher when vein material from the bulk-sampling program is run through the mill,” said President John McAdam.

Bulk-sample material is expected to be extracted in the current program at a 4-ft. width from the Linton North vein and should run more than 0.3 oz. Project reserves (all classes) stand at 243,005 tons grading 0.31 oz.

McAdam says it has received commitments from NIM (1989) Resource partnership for $185,000 in exploration financing which will be used to fund the Spud Valley bulk-sampling program.