By Lynne Olver
Of DOW JONES NEWSWIRES
VANCOUVER (Dow Jones)--In the ongoing attempt to find more gold around Red
Lake in northwestern Ontario, dozens of companies are prospecting, staking,
drilling, and flying over ground.
One of the smaller companies has attracted support from Goldcorp Inc. (GG),
owner of one of the district's two producing mines.
Calgary-based Planet Exploration Inc. (V.PXI) owns 100% of the Sidace Lake
property in what has been called a less-explored area of the prolific Red Lake
camp.
Goldcorp is funding exploration work to earn an initial 50% interest in
Sidace Lake, with an option to boost that to 60% with a cash payment. Goldcorp
also said last March that it owns 8.7% of Planet's stock, or 16.1% partly
diluted.
In late July, Planet announced initial results from its joint exploration
program with Goldcorp and said more results are pending.
Last year the junior company found a gold-bearing zone containing narrow,
high-grade gold mineralization and drilling this year has identified
additional high-grade zones, according to a recent report by Haywood
Securities analyst Jim Mustard. There's "considerable exploration merit on the
property," and Goldcorp has indicated its interest with its "fairly aggressive
drill program" and additional staking in the immediate area around the Sidace
property, Mustard noted.
Haywood has acted for Planet in a private-placement financing. Mustard
doesn't own Planet shares, but Haywood, its officers, directors and employees
in aggregate own more than 5% of Planet shares.
Robert McEwen, chairman and chief executive of Toronto-based Goldcorp, says
his firm has made a number of investments in juniors, where it has rights to a
joint-venture interest in a property along with an equity interest, or just an
equity interest.
As for Planet, "it seemed attractive, the target was intriguing...we hope
the exploration bears fruit," McEwen told Dow Jones.
Goldcorp has interests in other juniors exploring around Newfoundland, Peru,
Nevada and Arizona. McEwen doesn't rule out future equity stakes in other Red
Lake explorers, although he noted that the gold producer doesn't want to have
"a huge portfolio of investments." (It has about 10 equity investments, mostly
in liquid stocks, but the number of investments fluctuates depending on the
market, he said.)
Goldcorp Could Seek Other Investments
"They're all doing good work right now," McEwen said of the Red Lake
explorers. "If we see something that really catches our attention, and it's at
the right price point, then there wouldn't be anything to stop us from making
an investment in one of the others."
Earlier this year, Barry Allan, a mining analyst at Research Capital in
Toronto, began publishing updates of a Red Lake Exploration Index devised
in-house.
"As a result of the proven potential of this gold camp and the continued
excitement being generated by Goldcorp's Red Lake mine, the Red Lake and
Birch-Uchi greenstone belts have attracted many companies from senior
producers to junior exploration companies," he noted in June.
The index was designed to track the market valuation of 10 Red Lake
exploration plays, and was fixed at 100 in April 2002. By late August, the
index was breaking new ground, having rallied to 170.
"Junior golds and exploration plays have outperformed the intermediate and
senior producers, as investors look for leverage to a rising gold price and
the next big find," Allan wrote in an Aug. 21 research note.
His Red Lake index is composed of Wolfden Resources Inc. (T.WLF), Rubicon
Minerals Corp. (V.RMX), Fronteer Development Group (T.FRG), Planet
Exploration, Tribute Minerals (V.TBM), Skyharbour Resources Ltd. (V.SYH), Red
Lake Resources Inc. (V.RL), Redstar Gold Corp. (V.RGC), Golden Tag Resources
Ltd. (V.GOG), and Solitaire Minerals Corp. (V.SLT).
The index has been quite volatile - as one might expect with a group of
highly speculative equities, Allan wrote earlier.
Many of the companies in the index have property interests outside of the
Red Lake area. For example, shares in Wolfden Resources, based in Thunder Bay,
Ont., have rallied in the last three months to around C$4.00, mainly on
results from its High Lake copper/zinc property in Nunavut.
Over the summer, Wolfden also signed letters of intent for joint ventures
with Placer Dome Inc. (PDG) on the Marathon Red Lake and Bateman properties,
both in the Red Lake gold district. The Marathon Red Lake property adjoins
Placer's Campbell gold mine.
-Lynne Olver, Dow Jones Newswires; 604-669-1595
lynne.olver@dowjones.com
(END) Dow Jones Newswires
09-10-03 1200ET
End of News |
