Blue Desert RTO progress; $3-million financing
Blue Desert Mining Inc BDE
Shares issued 9,328,732 Aug 5 close $0.05
Tue 23 Nov 99 News Release
Mr. Brian Fairbank reports
Brian D. Fairbank, president of Blue Desert Mining, reports on progress
toward the reverse takeover of Burin Fluorspar Ltd. by Blue Desert
(Stockwatch, Aug. 12, 1999). Blue Desert will consolidate its shares on a 1
for 3 basis and issue up to 15.2 million shares to Burin shareholders on a
1 for 1 basis. The new company, with 18.7 million shares outstanding, will
be called Canadian Fluorspar Inc.
Blue Desert Mining has engaged Canaccord Capital Corporation as sponsor for
the proposed reverse takeover of Burin. In addition, Canaccord will be the
agent for a $3-million financing pending regulatory and shareholder
approval.
Blue Desert retained B.J. Price Geological Consultants to compile all
geological and resource data, to review the results of drilling currently
under way, and to recommend a program of further development. Summarizing
from the Price report dated Oct. 31, 1999, total production from the St.
Lawrence fluorspar deposits from 1933 to 1990 is approximately 4.6 million
tonnes grading about 50 per cent CaF2. Five veins, Black Duck, Iron
Springs, Director, Blue Beach and Tarefare, had substantial production.
Early production was from the Black Duck and Iron Springs veins and later,
larger production was from the Director, Tarefare and Blue Beach veins.
Roscoe Postle Associates Inc. of Toronto has quantified the fluorspar
resources at the Blue Beach North and Tarefare mines from underground
sampling and diamond core drilling. The 1996 resource study assumed a
cut-off grade of 35 per cent CaF2, dilution at 10 per cent CaF2, and
minimum mining width of 1.5 metres for the Tarefare vein and 2.5 metres for
the Blue Beach vein. Roscoe Postle estimates measured and indicated
resources of 5.453 million tons grading 50 per cent CaF2 broken down as
follows:
Area
-------- Resource
Area and Resource Grade
Category tonnes % CaF2
----------------- --------- --------
Blue Beach North
Indicated 2,966,000 46.7
Tarefare vein
Measured 783,000 65.6
Indicated 1,704,000 48.6
Tarefare subtotal 2,487,000 54.0
Total
Measured, indicated 5,453,000 50.0
A diamond drilling program commenced in May of this year to further define
reserves in the Blue Beach and Tarefare mines. 12,300 metres have been
drilled to date including 6,500 metres in 21 holes at Blue Beach North and
5,800 metres in 16 holes at Tarefare. The drilling is continuing. Drilling
has intersected both veins below their previously known limits and,
according to Price, can be expected to increase the indicated resource 4.5
million tons at Blue Beach and 1.2 million tons at Tarefare. Results of new
drilling are still being compiled. Roscoe Postle will conduct an updated
resource study from the new drill results upon completion.
In addition to Blue Beach and Tarefare, Price outlined other exploration
and development opportunities including: definition of resources in veins
adjacent to the Blue Beach and Tarefare veins intersected in drill holes
(e.g., Blow-Out, Valley, Haypook and Compressor veins); reinvestigation of
the Director vein for which estimated resources are of 2.1 million tonnes
grading 56.6 per cent CaF2 (Alcan); exploration of many other veins;
determination of the potential to recover lead, zinc and silver from
metal-rich veins; and marketing of construction aggregate from the
property.
Price recommends the following program at an estimated cost of $2-million
(Canadian): continuing definition drilling of resources at the Blue Beach
North and Tarefare deposits; and proceeding with metallurgy, mining,
marketing, environmental studies and complete a full feasibility study
following the above-noted drill program; examine other previously
delineated resources for inclusion in feasibility studies (Director,
Blow-out and other vein prospects); examine and recalculate the
reserves/resources at a number of different cut-off grades; and continue
research into dimension stone, lapidary and construction aggregates.
BLM Bharti of Toronto completed an earlier prefeasibility study (1998)
based of the Blue Beach North and Tarefare deposits. The development
program calls for the capacity of the existing mill to be increased from
85,000 to 180,000 tonnes of concentrate per year. Metallurgical tests will
be conducted on drill core to optimize the concentrator design. A high
quality 97.5 per cent CaF2 concentrate will be attainable. Mine plans as
determined by Bharti were for Blue Beach to be mined over the first seven
years, with Tarefare production taking over for the subsequent five years.
Blue Beach North has an existing decline (ramp) which will be extended
during preproduction development to provide for direct trucking from
conventional open stoops with pillars. Tarefare has an existing vertical
shaft which will be rehabilitated and equipped to hoist ore to surface for
trucking to the mill. Mining at Tarefare will be by Alimak open stoping
with pillars.
Ross Glanville & Associates Ltd. completed a valuation of the St. Lawrence
fluorspar project in November, 1999. Based on a detailed analyses of cash
flow (prefeasibility), and supporting methodologies such as appraised asset
value, comparable sales and share capitalization, Glanville estimated the
fair market value at $12.5-million.
Trading in Blue Desert stock will remain halted until the merger
transaction has been approved by the shareholders and accepted by the
Alberta Stock Exchange.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
