News from Nov. 6
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BORNEO GOLD CORPORATION
THIRD QUARTER REPORT 1997
Despite the negative environment for junior Indonesian gold exploration
companies which exists in the wake of the Bre-X scandal, Borneo Gold
Corporation continued to achieve solid fundamental progress during the
third quarter of 1997. Highlights of the quarter include:
Initiation of a drilling program at Tanah Laut.
Indonesian Parliament recommended 7th Generation Contracts of
Work ("CoW") for approval.
Encouraging progress in exploration at Bunut.
Initiated program to acquire additional projects in Indonesia.
Tanah Laut
During the quarter the Company initiated a 3,000 metre RC drilling
program at its Tanah Laut project in South Kalimantan. The objective of
this drilling program was to test the viability of the bulk-tonnage exploration
model being pursued by drilling soil geochemical anomalies identified in the
Rasnu, Munggukalang and Sarang Halang prospects of the Tanah Laut
CoW area. Portions of each of these three anomalies are being grid drilled
on 50 metre centres to an average depth of 30 metres and sampled at one
metre intervals through the saprolite and several metres into unweathered
bedrock. Results to date are in line with expectations and, on a preliminary
basis, confirm the viability of the bulk tonnage mining model being pursued
at Tanah Laut. Drilling of the large tonnage required for the project will
require considerable capital, even at the US$20 per metre cost of drilling
presently being incurred at Tanah Laut. Therefore, in addition to
conducting detailed interpretation of geological information obtained in this
drilling program, efforts at Tanah Laut will also now shift to a detailed
scoping study of the project's anticipated capital and operating costs and
the resulting required tonnage and grade to make the project economic at
today's gold price. If sufficient assurance is obtained regarding the validity
of these assumptions the Company anticipates proceeding with an intensive
drilling program to fully define a mineral resource at Tanah Laut.
Bunut
The Company also made good progress on its 7th Generation Bunut
project in West Kalimantan during the quarter. The Company has been
informed its 7th Generation CoW's have been recommended by the
Indonesian Parliament to be approved the Indonesian government. The
Company presently expects these CoW's will be signed before the end of
the year. On the technical side, airborne geophysical data indicates a
significant magnetic low and potassium anomaly centered within the 3 km
by 2 km target area delineated at the project during earlier field work. This
provides further evidence of a major hydrothermal alteration system.
Preliminary results of an IP survey conducted during the quarter indicate a
significant chargeability zone also located near the center of the target area.
The Company continued its trenching and pitting activities during the
quarter. Initial test pit results from the Monsan area did not encounter
significant coarse gold, however, commercial grades are now being
encountered in the Bingkai area 400 metres to the southeast. The
Company is encouraged by these results and expects to expand its
exploration efforts on the project upon the final granting of the CoW.
Outlook
The Company maintains its strong capital position with over $8.5 million in
working capital at the end of the quarter. In addition, the Company expects
to receive proceeds of $2.0 million through the exercise of warrants
expiring during the final quarter. The Company will continue to aggressively
explore both its key properties. The Company is also actively seeking
additional projects which are now available as the result of the current
difficult environment for gold exploration companies operating in Indonesia.
We remain confident that the Company has the properties, management
and capital necessary to create significant shareholder value in the year
ahead.
Respectfully submitted,
Francis T. Manns
President and Chief Executive Officer
November 6, 1997 |
