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2 Terrace Review — | Wednesday, September 28, 1988

Golden mag net draws i

"The high costs of exploration, development and pro-
duction for the mining industry in Northwestern B.C. |
aré offset by the relative potential of current exploration
results when compared to southern. operations. What
this means to the Northwest, and to Terrace if they

capitalize on the industry, is the investment of millions
more than in similar developments.down south.

by Tod Strachan

The: mining industry in the
Northwest is split between two
major areas: Smithers, which

will probably have little local ef-.

fect; and. the Stewart/Iskut
River area which could be cause
for the development of a major
service center in the Northwest

.— either in Terrace or Alaska —
depending on who is most ag-

gressive.
And as was pointed out by
Alderman Bob Jackman in the

“Sept.. 14 issue of the Terrace

Review — the Alaskans may be
ahead, When the Johnny Moun-

‘tain gold mine was officially

opened recently, the American
presence far over-shadowed our
delegation of a few local
businesses, One alderman, one

regional district board director

— Dan Pakula of Telegraph
Creek.— and total absence. of
provincial and federal _politi-
cians.

In order to understand just
how great the impact of the min-
ing industry on the Northwest
may be, it’s necessary to take a
look at what's there and what’s

happening. In the Stewart area, ©

there are several developments.

- Johnny Mountain, located near

the Iskut: River, about 60 miles
northwest of Stewart, is now in
production and is expected to
produce more than 686,612

ounces of gold. And.as of last.
Friday, that’s worth more than

$273 million U.S. Little wonder
developers were willing to spend
close to $15 million this year
alone in order to develop the
site, and intend to spend many
million more in future develop-
ment, maintenance, operational
expenses and wages.

And 35 miles to the northwest
of Johnny Mountain is an even
greater find — the Comin-
co/Deleware Resources Snip
gold reserve, which is slated to
begin production of 300 to 500
tonnes of ore per day i in less than
a year, The mine’s potential is
estimated at 851,612 ounces,
valued at about $339 million on
today’s market, and this has
prompted Deleware Resources
to spend over $800. million to
date and Cominco to commit a
further $16 million in explora-

tion and development. In total,

it is estimated that the Snip pro-
ject could cost as much as $45
million in capital costs, a
sizeable investment in the North-
west which still leaves an entic-
ing profit for the developers.
The Sulphurets mine site,
located about half way between
Stewart and Johnny Mountain,
is-a 60-40 joint venture between
Newhawk Gold Mines Ltd. and

Granduc Mines Ltd. Production —

is slated to begin late next year

-and is expected to total about
- §13,300 tonnes of ore containing

182,159 ounces of gold, worth

$72.5 million on today’s market,

plus about 365.4 million ounces
of silver worth. another $2.5
million over its expected life of

about nine years. .

ing capita, inflation and in-

million, $5 million of which will
be spent on roads, site prepara-

tion and ‘environmental studies.

In addition, an additional $3.1
million wili be spent on further
exploration of the site.

In addition, the old Scottie
Gold Mine is located in ‘the

terest,-is expected to total $80.4‘

vicinity of the ‘Premier Gold
‘Project and may be- soon be”
scheduled to .re-open.” The

potential here is about 306,000
ounces’ of gold for sure, plus’

another unproven 40,580 ounces

for a total value of $138 million. —

Another new site in the same
area.is the Tenajon Silver Cor-
poration property, owned equal-

Gold hasn’t lost its glitter

“Gold j is the currency of last

resort,’”

That’s the way investment
counsellor Marylou. McDonald
describes the metal that's
brought a recent mining boom
to. the Northwest and pumped
millions of dollars into the Ter-
race economy over the past few
years. |

McDonald, an account ex-
ecutive with Vancouver’s Odlum
Brown, was in-Terrace to speak
to a luncheon meeting of the
Chamber of Commerce. In an
interview afterward she-discuss-
ed the behavior of gold in rela-
tion to the economy and the
reasons it continués to hold a
special position in the hearts and
minds of..investors and in the
overall affairs of global finance.

“It’s the hard currency; when
paper money is worthless, gold
is still left as a medium of ex-
change,’” she explained. Using
as an example the inflation that
plagued: Germany in the years
prior to World War II, when a

wheelbarrow full of paper
money was required to buy a.

loaf of bread, she likened the

penchant for ‘gold to the sur- .

vivalist. mentality that compels
people to equip bomb shelters
with canned foods and bottled
water. If the world (financially)
collapses, gold will still be a
standard of value.

_ There was a time in the not-
too-distant past when most na-
tional currencies were based ona
gold standard, with the value of
paper money having a direct
relationship t6 a country’s gold
reserves, Currencies are no

Closer to home, development
in the Stewart area holds a great
deal of promise. By combining
the Silbak Premier Mines and
Big Missouri Gold properties to
form the Premier Gold Project,
the principals have a resource
located approximately 20
kilometers north of Stewart

which is roughly equivalent.in

potential to Johnny Mountain.
An open-pit operation. produc-
ing 2,000 tonnes of ore per day is

anticipated to produce 660,000

ounces, or $263 million in gold
plus another 16.3 million
ounces, or $1.8 million, in silver
during its. estimated 10.5 year
life.

According to the principals i in

the venture, Westmin Resources

Ltd., Silbak.Premier Mines Ltd.

and Canacord Resources Inc.,.

production is scheduled to begin

early next year, and based on -

current precious metal prices

and exchange rates the average |
cash flow (before financing and ©

taxes) is estimated at about $30

million, enough to recover the.

capital investment costs in about
2.5 years,
Capital costs, excluding work-

longer tied to gold,: and
McDonald believes that’s one
reason the global economy has
been subject to periodic bouts of
inflation. The value of money

isn’t anchored to anything. The

gold ‘standard ‘“‘used to keep
everybody honest’, she remark-
ed,

_ Like the financial. bomb.
shelter it is, gold provides -pro-

-tection against inflation because
its value tends to climb as prices
of goods and services escalate.
McDonald points out that it has’

also has an intrinsic psycho--

logical value that puts it outside
the normal rules for supply and
demand, There are industrial
uses for it, such as jewelry, and
most’ countries keep bullion
reserves in their national
- treasuries, but despite more and
more gold mining discoveries in
recent years demand for the
metal has not tapered off. -

McDonald suggests that all in-
vestors should hold between five
and 10 percent of their port-
folios | in gold, for the’sake of
diversity, with the recommended

‘forms being coin, wafer or
stocks of senior mining com-
panies.

‘McDonald was here to. speak

to the Chamber last year, arriv-.
ing the week of ‘Black.
Monday” when world stock.

markets went into a tailspin and
_ investors lost billions of dollars.
She jokingly told the Chamber
last week that she hoped this
visit to Terrace’ wouldn’ t

precipitate another catastrophe,
but then added that the night

before the price of gold had
dropped below $400 U.S. an
ounce for the first time this year.
Investment authorities, she said,
think the price may go as low as
$376 but no lower.

Even with the price dropping
somewhat, there is little concern
on the part of mining companies
operating in northwestern B.C.
gold fields: they’re all estimating

production costs between $150

and: $200 an ounce, leaving a
wide margin of profit. —

ly. by. Tenajon’ Silver afd Esso _
« Resources ‘Canada: Ltd; About’
$1.8 “million has been spent.on.
this development so far, and the -
future of gold and silver produc-:
tion on the site is said to hold

much promise.
In total, all this activity adds

up to over $1 billion in gold pro- |

duction, less whatever. is: left,
behind in exploration and pro-

duction costs and wages, in our

immediate area between. now
and 1998. The question now, as
Jackman has pointed out, is just

who is going.to gain from the”

dollars that are left behind. Or,
where. will the service center for

“the. industry be located, and

where will the families of those
mine workers live?

_Jackman says that we simply.
-have to ‘‘get the word out’ if
‘we’re going to compete. Due to
significant improvements to the-

Terrace Airport in the past year,
Jackman says, airline perform-

ance has improved to the point’

where we are now competitive

with any other northern com-  -
munity — and the mining com-

munity has to be told. He says
this is already happening: with a

new awareness of the mining —

potential, Terrace city council,
the Chamber of Commerce and
the regional district are all lob-
bying hard. An area where im-
provement is still required
however, is the upgrading of the
Highway 37 corridor in order to

provide more economical access
. ‘continued on page 3

Westmin Resources Limited

Denis Gregoire

Westmin Resources Limited is —
pleased to announce the appoint-
ment of Denis Gregoire as Mine
Manager, Premier Gold Project lv-
cated at Stewart, British Columbia.

From positions in Quebec, the
Yukon, and Nova Scotia, Mr. Gre-
goire brings 16 years of engineering
experience in the mining industry to
Westmin Resources. Prior to joining
Westmin, Mr. Gregoire was em-
ployed as Mihe Superintendent at

‘the Rio Algom Limited, East
‘Kemptvilleopen pittitiminein Nova
_ Scotia, where he was responsible for

mining of the ore deposit. As Mite“
Manager, Premier Gold Project, Mr.
_ Gregoire will be responsible for.the

mining development.
serves from the Silbak Premier and
Big Missouri mines, which make up
the Premier Gold Project, will sup- *
ply the ‘new mill for the next ten
years. Thepotential for new reserves
is also encouraging. Goid and silver

spring 1989.
Westmin Resources Limited;

with its head office in Calgary, is a

- diversified natural resource explo-

with interests in’ oil, natural gas,
precious metals, base metals, coal.
and industrial minerals.

the geology, engineering and actual. | .| ae

operation of the company’s newest -
Current re-

production is expected: to start in,

‘ ration and development company | >

ARIES

Mar.28-Apr. 19
reach out.

TAURUS

Apr. 20-May 20

GEMINI
May 24-June 20)
CANCER
Sune 2 1-Julty 22
LEO :
July 23-Aag. 22
rule.
VIRGO
Aug. 23-Sept. 22
again,
LIBRA
Sept. 23-C)ct. 22
prestige.
SCORPIO
Oct, 23-Nov, 21
SAGITTARIUS
Nov, 22-Dec. 21

~ CAPRICORN...
a tne. 22-4an. 19 -

AQUARIUS
dan. 20-Feb. 18.

PISCES .
Feb, 19-Mar, 20
openup. »

Forecas! Period: 10/2- 10/8/88

New and stimulating ways of thinking open up.
New palhs to be explored. Now is the time to

Emphasis is on Finances and possessions that you
‘hold with others. Try to ease the restrictions
placed on you.

Some relationships may cone to an end. Diffi-
culty in dealing with the tensions is just too much,

Regulate your job in sucha way (hat you are not
“donein’’ at theend of the day. Ease up.

A surprising turn of events adds an urgent note
to the blissful romantic picture. Let the heart

Alterations and adjustments are experienced on
the home front. Things will never be the same

You meet important people i in connection with
your community activities. They lend an air of

Changes invalving the source of your income are
in the works. It would be wellto economize.

Increased work and greater accomplishments put
you into a more progressive patiers. Your inter-
" estsin life undergo change.

Serious: attention isdir ected toward spiritual dis-
ciplines: You may become involved i in a secre-
~tiveor ganization.

Our expectations are condit ioned by the groups
we belong to, To make progress, wemayhaveto . |
change associates. ‘

Conflict with an authority figurecould affecithe
way You make your living. New opportunities

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036-5446,