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Moneta Porcupine Mines Inc -
Year end results
Moneta Porcupine Mines Inc ME
Shares issued 38,888,751 1998-06-09 close $0.13
Thursday Jun 11 1998
Mr. Rhoderic Whyte reviews the company
Year End Results
The Golden Highway Project
Moneta controls the strategic heart of the Golden Highway Region of Northeastern Ontario, straddling the Destor Porcupine fault zone (DPFZ) along Highway 101 east of Timmins. This region hosts numerous gold deposits and several producing mines.
Moneta holds a total of 798 mining claim units (each claim unit is 16 hectares) in five separate packages: Michaud (Moneta 100 per cent and via Nufort joint venture); Michaud South (Moneta 100 per cent), Garrison (via joint venture with Alto Minerals/Jonpol Exploration); Barnet/Melba (via 50 per cent Alto Minerals joint venture); and the eastern properties (via 20 per cent Battle Mountain Gold/Aur Resources joint venture).
Moneta's principal asset is the Golden Highway project which incorporates 454 claim units from the above claim groups to form one of the largest contiguous advanced exploration properties ever assembled in the Golden Highway region. The keystone of the Golden Highway project is the Michaud property (Moneta 100 per cent) which hosts a 460,000 ounce resource (2.4 Mt at 6.1 g/t over a 6.4 metre average true width). There are six other known gold zones in the Golden Highway project.
Michaud Property
Moneta acquired most of the key Michaud claim units in 1987 and in the ensuing exploration program completed ground geophysical surveys, 93 diamond drill holes, and 125 reverse circulation drill holes. Subsequently in programs operated by several joint venture partners (Unocal, Independence Mining, and Barrick Gold) further geophysical surveys and 133 more diamond drill holes have been completed. Over $10-million has been expended and seven distinct zones of gold mineralization have been identified.
In 1996 Barrick Gold declared an initial resource for the Southwest zone (one of seven zones) in all categories of 2.4 million tonnes at 6.1 gpt over a true width averaging 6.4 metres (460,000 ounces of contained gold).
A substantial part of this resource was calculated to be in the central block covering 350 metres of strike and to a vertical depth of 450 metres. Drilling has identified the Southwest zone to be part of a sediment hosted gold bearing quartz-carbonate stockwork system along 2.7 kilometres of strike and to depths of over 1,000 metres.
Moneta's strategy has been to build the land position along the critical NW-SE cross-faults trending in Michaud from the Southwest zone towards the Moneta porphyry zone. In addition, a report has been prepared detailing the exploration work that must be done, both to establish a resource estimate and to develop new exploration targets. This work includes follow-up diamond drilling.
The company has received a number of expressions of interest for negotiation of a new and substantial joint venture on the Golden Highway project. The option of some sole risk exploration also exists. The $4.4-million exploration expenditure by Barrick over the past three years, combined with previous expenditures maintains the company's key claim block (73 square kilometres) in good standing with minimal land holding costs for the foreseeable future.
Garrison
In 1997 the Moneta/Alto joint venture recovered and assayed much of the 1987 drill core available from the Jonpol option. Several new zones of gold mineralization and alteration were discovered and old ones expanded. Plans for 1998 include lithogeochemical analysis of all Garrison drill core and diamond drilling of selected targets.
Barnet/Melba
An airborne Mag/EM survey is planned on the 50:50 Alto Minerals joint venture covering the contact with the Blake River formation, in order to develop base metal targets for follow-up drilling.
Nighthawk Lake
Moneta holds a 100 per cent ownership in 106 claim units (25 patents and 81 staked units) 20 kilometres east of Timmins covering portions of both Nighthawk Lake, its Northeast Bay and northern shore, and the peninsula.
Moneta has completed a three phase drill program for an expenditure of $600,000 and confirmed the discovery of a significant gold mineralized alteration zone. The discovery, now designated the Collins zone, is three kilometres north-northwest of Royal Oak's high grade Hopson zone and 4 kilometres west of Echo Bay's Aquarius project with a reported 1.3 million ounce resource.
Initial drill targets were identified by Realsection IP in favourable host rocks. To date 18 diamond drill holes have been completed in gold mineralization along a strike length of 550 metres and to depths of 375 metres.
The best intercept was 9.5 g/t over 5.8 metres. This discovery is now known as the Collins zone.
In addition, a Mobile Metal Ion (MMI) orientation soil geochemical sampling program has identified a strong and well defined base metal anomaly through 5-15 metres of clay overburden. The anomalous response is predominantly zinc, and is adjacent to the gold mineralization.
Moneta plans further diamond drilling to scope the Collins zone which appears to have a similar geologic setting to the Aquarius resource, albeit at higher grades and is known to continue to the west. Known gold resources which exceed 3.5 million ounces on the adjoining Royal Oak and Echo Bay properties, make a strong case for an integral regional resource development at Nighthawk Lake.
North Tisdale
The North Tisdale joint venture between Moneta and Pentland Firth Ventures is in the northern half of Tisdale Township, immediately north of the city of Timmins. The 75 claim unit property consists of unpatented and patented mining lands comprising 1,214 hectares (3,000 acres) and covers the 16 kilometre prospective extension of the new mine trends west of the Burrows Benedict fault.
Exploration during 1997 consisted of a Mobile Metal Ion (MMI) soil geochemical survey on selected portions of the property, as well as geophysical surveys on portions of the Pentland contribution to integrate the database generated from the previous Placer Dome option. The MMI soil geochemical sampling appears to have delineated the western strike extension of both the north and south parallel trends of the Bell Creek and Hoyle Pond stratigraphy.
Diamond drilling will test the strike potential of the interpreted north and south parallel (grey zone style) mineralization such as previously intersected on the property. The soil geochemical survey has helped to prioritize potential drill targets. A field drill program valued at about $200,000 is proposed for the summer of 1998.
Kamiskotia Property
The Kamiskotia base metal property consists of 473 unpatented claim units comprising 7,568 hectares (18,920 acres). Regionally, the property is contained within the Kamiskotia volcanic complex, (KVC) lying immediately west of the Mattagami River fault and on the periphery of the Kamiskotia gabbroic complex (KGC).
Moneta has a 100 per cent interest in most of the mining claims.
A further 20 claims in north central Godfrey Township are in a 50:50 joint venture with Kinross, with Moneta as operator. Previous intersections on the Kinross joint venture property included intersections of 2.5 opt gold over five feet and 10 per cent zinc over three metres. In central Jamieson Township, Moneta has an agreement on 22 claim units with Wildcat Resources, a private company which is financing a drill program with Moneta as operator.
Moneta has conducted annual programs of diamond drilling to systematically evaluate targets in the KVC in Godfrey and Jamieson Townships.
Moneta and previous partners have spent a total of $1-million exploring the property to date which is adequate to maintain the land position in good standing for the next phase of considerable exploration activity on neighbouring properties. Moneta intends to drill base metal targets generated by Realsection IP geophysics in 1998.
Wounded Bull Resources
Moneta's American interests are held in a wholly owned subsidiary, Wounded Bull Resources (WBRI), a Nevada company. WBRI's main asset is the perlite project of Idaho Minerals (IMI).
Perlite is a unique glassy volcanic rock that has the unusual characteristic of expanding up to 20 times its original volume upon being exposed to rapid, controlled heating. The resulting expanded particles are spherical in shape, usually fluffy or frothy, highly porous due to a foamlike cellular internal structure, and have a low density. Expanded perlite exhibits low thermal conductivity, low sound transmission, high fire resistance, a large surface area, and low moisture retention characteristics. Perlite is regarded as an environmentally safe building material.
The NP-2 deposit contains measured reserves of 4.8 million short tons and indicated reserves of 2.3 million short tons. These are categorized on the definitions adopted by the U.S. Geological Survey and the U.S. Bureau of Mines. Additional exploration could substantially expand the reserves. At a planned production rate of 180,000 tons per year, existing reserves alone could sustain an operation for the next 40 years.
The IMI business plan intends to redesign and re-engineer the project for efficiency in handling bulk production, and to identify market areas in which the mid-west location would be transportation competitive. The existing plant and expander are not modern, and are inefficient to operate. A new plant has been planned, off-site, adjacent to the Union Pacific main rail line and off Interstate Highway 15.
Single handling of material from the open pit minesite to the new plant requires construction of five miles of new haul road. Moneta has now secured options on the relevant land for road and plant construction. Construction permitting is in hand, and design engineering has been advanced to the point of contract tendering.
Moneta intends to provide $5-million (U.S.) finance for construction by permitting an earn-in by the financing partner. The new processing plant, designed for a 50 ton per hour throughput, allows for initial annual output of 125,000 tons per year, expanding as markets permit to 180,000 tons per year by the year 2003. The initial cash flow generated will be tax protected inside WBRI which has over $7-million of tax losses. Processed perlite sells at an average of $28 per ton, f.o.b. plantsite, and expanded perlite at $205 per ton. All costs are expressed in American dollars.
Moneta has recently executed a letter agreement permitting Inca Mining to earn a 49.9 per cent interest in the perlite project by providing the $5-million of project finance. After the project has generated cumulative profits of $15-million, Inca has the option to acquire a further 5.1 per cent interest in the project. Should Inca secure project finance, construction could commence in the summer of 1998.
Financial
During 1997, there was a total of $2.8-million spent exploring the company's mining properties. The bulk of this was provided by the company's joint venture partners, notably Barrick Gold. Sole risk exploration was financed by a private placement of 600,000 flow-through shares at 25 cents. Hard dollars for general, administration and perlite project advancement were provided through exercise of 1.8 million warrants at 50 cents, and 230,000 stock options at 36 cents. Subsequent to year end, two separate financings of flow-though and non-flow-through shares were issued for gross proceeds of $385,000.
The company has completed permitting its perlite project and looks forward to construction in 1998. A letter agreement has been completed with Inca Mining to finance the project to production ($5-million (U.S.)) for a 49.9 per cent interest. After a cumulative $15-million of profit from the project, Inca may earn a further 5.1 per cent interest.
The company's Timmins mining properties are maintained in good standing. Whereas 1997's field efforts concentrated largely on the company's gold property exploration (Michaud, Nighthawk, Garrison), in 1998 the company intends to reactivate the Kamiskotia and Kelly Lake base metal properties. The company's strategy is to maintain its properties with a minimum of sole-risk expenditures to be prepared for a projected market improvement.
Over the past year the company has assembled a large land position in the Golden Highway area with the Michaud property as keystone to a large advanced gold exploration project. Moneta is now extremely well positioned for the recovery phase in the gold market.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Mr Metals
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