First quarter results
Major General Resources Ltd MGJ
Shares issued 35,463,847 Jun 23 close $0.41
Wed 24 Jun 98 Company Review
Mr. Glenn Shevchenko reviews the company
This report covers the company's first fiscal quarter of 1998, from January
1 to March 31, and subsequent significant events.
Exploration Projects
Sarah Lake Property, Labrador
(Nickel-Copper)
The 142 claim Sarah Lake property (3,550 hectares) is jointly owned by
Major General (40 per cent) and Donner Minerals (60 per cent) with Teck
Corp. retaining the right to earn 50 per cent of Donner's interest. This
would result in the company retaining the majority interest of 40 per cent.
The claims are approximately 1km from the Voisey's Bay-style massive
sulphide occurrences on the adjoining Donner/Northern Abitibi claims and
cover the eastern strike extension of the black troctolite unit that hosts
this mineralization. Data from the two holes (SVB97-90 and 92) drilled on
Major General's ground indicate a thickening of this mineralized
troctolite. Furthermore, the down-hole electromagnetic survey on SVB-97-92
has defined a strong off-hole conductor that is interpreted by Teck's
geophysicist to be caused by a sulphide-rich troctolite measuring close to
100m in thickness.
The 1998 exploration budget for the Sarah Lake property is set at
$2.5-million and will consist of geophysical surveys and a two-phased
drilling program totalling 8,000m. The exploration program for the entire
South Voisey Bay project is anticipated to extend into October with a total
budget of $14.7-million.
Nepisiguit Brook Property, New Brunswick
(Lead-Zinc-Silver)
The Nepisiguit Brook property (3,100 hectares) consists of two contiguous
claim blocks known as the Rio (187 claims) and Stewart (nine claims)
options.
A drill program was completed in mid-February which consisted of 3,489m in
six holes. The campaign focused on testing the two northerly trending
chargeability/resistivity anomalies on the Rio option that were delineated
by the gradient array induced polarization survey.
The western IP anomaly measures 2.2km in length and is open at both ends.
Two drill holes (NB97-21 and 23) spaced 1.4km apart, have intersected wide
zones (up to 100m) of altered volcanics that host base metal rich,
semi-massive sulphide mineralization. NB97-21 intersected 16.8m grading
1.59 per cent zinc, 0.16 per cent lead and 4.6 g/t silver while NB97-23
returned a 15.5m interval of 1.44 per cent zinc, 0.70 per cent lead and 8.6
g/t silver. This style of mineralization is commonly found proximal to the
more massive accumulations of Brunswick-type lead-zinc mineralization. The
dip and strike extent of this mineralized horizon suggests an enormous
amount of base metal potential exists along this anomaly.
The eastern IP anomaly has been tested by only one drill hole (NB97-20)
which encountered similarly altered volcanics to that which was cored in
NB97-21 and 23.
The upcoming 1998 exploration budget is targeted at $250,000 and will
include a 3,500m diamond drilling program that will commence around the end
of June.
Green Bay Property, Newfoundland
(Lead-Zinc-Silver)
In a major agreement covering 600 claims (10,000 hectares), Rio Algom
Exploration has optioned the company's Green Bay property in north central
Newfoundland.
The four year option agreement allows Rio Algom to earn a 50 per cent
interest in the properties by making exploration expenditures of $2-million
and payments to Major General of $285,000. Rio Algom may earn an additional
10 per cent by expending a further $1-million and making a cash payment to
the company of $100,000 in the fifth year.
Rio Algom has completed 366 line-kilometres of airborne geophysical surveys
which is part of the committed expenditure of $250,000. The exploration
program will also consist of data compilation and ground geotechnical
surveys leading to a drilling program by the third quarter. In order to
maintain the option, Rio Algom must expend $400,000 in 1998.
Despinassy Property, Quebec
(Gold)
Located 70km north of Val d'Or, the 100 per cent owned Despinassy property
covers an extensive deformation zone in volcanic rocks of the Abitibi
Greenstone Belt.
Cameco Gold has completed a $150,000 exploration program consisting of
linecutting, 22km of induced polarization surveys and 1,389m of diamond
drilling (seven holes).
Drill holes were targeted to test the known gold bearing structure as well
as new IP anomalies. Drill holes 98-4, 98-5 and 98-7 returned encouraging
results with numerous quartz veins hosting gold values exceeding 1 gm/t.
The best intervals included 2.2 gm/t Au over 2.6m, 4.9 gm/t Au over 1.2m
and 9.9 gm/t Au over 0.3m. The gold-quartz veins are contained within two
wide, parallel deformation zones and are associated with two distinct
felsic porphyries. The deformation zones have been traced along strike for
over 1.8km by drilling and appear open ended.
Cameco staked an additional 15 claims to cover possible extensions to the
mineralized deformation zones and intends to complete further geophysical
surveys later this year in preparation for future drilling.
Victoria Island Property, NWT
(Diamonds)
Major General Resources and partner Ascot Resources have entered into an
agreement allowing Monopros Ltd., the Canadian subsidiary of De Beers
Consolidated Mines, to acquire an interest in the large Victoria Island
diamond property. Monopros has recently discovered several diamondiferous
kimberlite pipes just to the north of and close to two of the Major
General/Ascot targets. Drilling will commence shortly, weather permitting.
By expending $2-million on exploration and making payments to the partners
totalling $200,000 over three years, Monopros will earn a 51 per cent
interest. Currently, the project ownership is Major General 25 per cent and
Ascot 75 per cent. Under the terms of an agreement with Ascot, after the
first $1-million expenditure by Monopros, Major General and Ascot will each
have a 50 per cent interest. Once Monopros has earned its interest, the
partners will dilute pro rata to 24.5 per cent each.
The first stage field program this spring will include drill testing of the
two main targets as well as ground magnetic surveys over other magnetic
targets of interest which may also be drilled in the first program.
Other Labrador Properties
(Nickel-Copper)
Major General Resources staked three new properties totalling 134 claim
units in Labrador. The properties are along the western margin of the Nain
Plutonic Complex, 40km west/northwest of the South Voisey Bay project.
Mapping by the mines department indicates that the properties cover gabbros
of the Nain Plutonic Complex which are host to the Voisey's Bay
nickel-copper deposit.
The company now controls five additional nickel-copper properties in the
Nain Complex outside of its Sarah Lake property and discussions are under
way with potential joint venture partners.
Greenland Properties
(Diamonds)
The long awaited results of the 1996 sampling program on the company's
properties in southwestern Greenland indicate the presence of both
diamondiferous and non diamondiferous kimberlites.
Of the 300 samples collected, 55 contain kimberlitic indicators of which
nine contain a variety of minerals interpreted to be sourced by
diamondiferous kimberlites.
Major General has retained approximately 400 sq km in six separate areas
which are designed to adequately cover the sources of the stream gravels
from which the anomalous samples were collected.
Preliminary positive discussions have been held with several potential
partners concerning joint venture opportunities.
Financing
Working capital on March 31, 1998 was $1,544,101. Subsequent to March 31,
1998 the company has added $866,082 to the treasury from the exercise of
1,924,628 warrants at 45 cents. The warrants are 75 per cent flow-through.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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