South-Malartic finds more gold at Croinor

Definition drilling by South-Malartic Exploration (MSU-M) continues to intersect gold at the Croinor project, 75 km east of Val-d’Or, Que.

Earlier this year, the junior proved the existence of flat-lying, gold-bearing tension veins perpendicular to a better-known, gold-bearing shear zone.

Highlights from the latest drilling include: 11.1 metres (from 24 metres) grading 23.21 grams gold per tonne in hole 38; 2.4 metres (from 74 metres) of 15.04 grams gold in hole 42; 15.1 metres (from 107 metres) of 12.23 grams gold in hole 43; and 6.7 metres (from 106 metres) of 8.59 grams gold in hole 46.

South Malartic plans to update the resource estimate for the deposit, which was pegged, in a prefeasibility study completed in May, at 1.1 million tonnes grading 2.44 grams gold.

From 1996 to 1997, Croinor was the site of a small open-pit gold mine operated by Calgary-based Goldust Mines, which changed its name to Huntington Exploration (HEI-V) in 1997. South-Malartic can earn a 70% interest in the Croinor property from Huntington Exploration by spending $1.5 million by mid-2003. At July 19, South-Malartic had spent about half that amount.

South-Malartic has also decided to limit a previously announced, $2-million private placement to $1 million. The revised placement will consist of 1.7 million units priced at 60 per unit, with each unit consisting of one share and one warrant. Each warrant entitles the holder to buy another share for 80 over 18 months.

Once the private placement is completed, the funds will be used to complete South-Malartic’s acquisition of Cambior‘s (CBJ-T) Chimo mill, as well as the Chimo and Nova mining properties.

Malartic acquired the mothballed, 2,000-tonne-per-day Chimo mill, 20 km southwest of Croinor, for $375,000 and the assumption of any environmental liabilities. Earlier, Malartic had arranged to buy the Chimo property and the adjacent Nova property from Cambior for $1 and a 1% net smelter return royalty.