Golden assets

ÔÇ£Look for a gold mine where there already is a gold mine,ÔÇØ says Bralorne Gold Mines president Bill Kocken to Gary Toushek. With the infrastructure already in place, he hopes to be pouring gold bars by the end of 2008. Without the existing infrastructure of what used to be a sizeable mining community in the 1930s, Louis Wolfin and Bill Kocken would not be looking forward to their first gold bars from Bralorne Gold Mines. The mine has had a long and sometimes tortuous history, but the importance of its infrastructure has never been far from the surface. The west coast gold rush came to British Columbia in the late 1860s, attracting hundreds of prospectors from San Francisco to the Fraser Valley, north and east of the city of Vancouver. In 1896 Harry Atwood and William Allen staked claims for Pioneer Mine, east of Vancouver; Frank Kinder acquired a 50 percent share by promising to purchase and operate a stamp mill, which proved capable of crushing only about a hundred pounds of gold ore per day. Atwood and Allen, frustrated with the slow progress, withdrew from the partnership, leaving Kinder to operate on his own for the next six years, when he sold out to a syndicate for $20,000. In 1915, Pioneer Gold Mines Limited was incorporated. For the next decade the mine was producing, but it was examined and turned down by numerous companies who had no faith in its potential.In 1928 the nearby Lorne Mine was incorporated and a company town was formed. Although 60,000 tons of ore with proven value were discovered, in 1930 mining broker Stobie Furlong and Company ran into trouble, and under investigation of the market, declared bankruptcy. Financing on the Lorne Mine disappeared, and without new investment the project was doomed. In early 1931 a deal was reached with Balco Development and Investment Company to form a new company with the Lorne shareholders retaining an interest. Bralorne Mines Limited was incorporated in 1931, and a mill was constructed to handle a capacity of 100 tons of ore per day. In 1932 the first gold brick was poured at Bralorne; weighing 363 ounces, it was worth $6,217 at the time. In 1959 the two mines amalgamated to form Bralorne-Pioneer Mines Ltd under the direction of Franc Joubin; this move facilitated the development of holdings along their common boundary, and the combined working capital provided funds for exploration and expansion. However, rapid expansion sometimes proves costly, and in 1971, the cost of production overtook the market price of gold, which was $36 per ounce, and the Bralorne-Pioneer Mines were shut down. However, from 1932 until the closing, these mines produced 4.15 million ounces of goldÔÇö the largest amount in the Canadian Cordillera mountain region.The Bralorne-Pioneer mine property is an extensive holding of mineral claims and crown grants that includes the Bralorne Gold Mines Ltd (2,294 hectares or 5,668.6 acres) in the historic Bridge River gold mining camp in southwest British Columbia. Bralorne Gold Mines owns 100 percent, according to an assignment agreement with Avino Silver and Gold Mines Ltd, dated June 21, 2002. Avino Mines and Resources Limited first became involved in the LOCO property in 1987 and subsequently acquired 100 percent ownership from Love Oil Company, Coral Gold Corporation and Levon Resources. The original Bralorne Pioneer mine property was then acquired by Avino Mines and Resources Limited in November 1991. In July 1993, Bralorne Pioneer Gold Mines Ltd. made an agreement with Avino to earn a 50 percent interest in the property by spending $1,000,000 over three years. Bralorne Pioneer Gold Mines Ltd carried out exploration and underground development work, constructed a mill, and carried out permitting for a mine operation. The company was granted a mine development certificate for the property, conditional on a payment of $50,000 to increase the reclamation bond.Louis Wolfin met Bill Kocken in the early 1980s and was impressed enough with his knowledge of mining to invite him to become a director of three of WolfinÔÇÖs companies (since 1972 Kocken had operated Terra Mine in the Northwest Territories, which produced 16 million ounces of silver; he left in 1986 when new management took over, and three years later the mine was in receivership and shut down). In 1996 Kocken retired and Wolfin asked him to put a plan together for Bralorne Mines, but Kocken passed on it, until seven years later when he had grown weary of retirement and agreed to become president and CFO of Bralorne. In August 2003 Kocken supervised the construction of the mill (he had experience in mill fabrication as well as steel fabrication in the Vancouver area, having completed many industrial and mining projects in the 1960s). He tested the mill in 2004 by running a 20,000 ton bulk sample test and recovered approximately 3,000 ounces of gold. The strategy was to explore the previously unexplored area between the three mines, and it proved fruitful. As Kocken puts it, ÔÇ£ThereÔÇÖs an old expression in mining: ÔÇÿLook for a gold mine where there already is a gold mine.ÔÇÖÔÇØ In 2005, with a three-phase exploration program from Vancouver-based Beacon Hill Consultants, they explored the area between Bralorne and Pioneer, drilled from the surface and located some very exciting anomalies in the new Bralorne-Pioneer zone. ÔÇ£We opened up the area and proved that we have 150,000 tons of gold ore from the eighth level and up (we havenÔÇÖt tested below that level yet). The grade of ore is about one-third of an ounce, so we have roughly 50,000 ounces in that area,ÔÇØ he says. Exploration and drilling between the King and Bralorne mines turned up a large anomaly and bonanza grade intersects which has been titled the BK zone. Accordingly a drill program has been initiated that commenced from the surface. ÔÇ£We drilled one hole down to about 2000 feet, and came up with an intersection of 11.781 ounces over 13 inches,ÔÇØ he says. ÔÇ£Our geology department put a program together to drill from the underground (half the cost of drilling than from the surface) which we have just completed. We have drilled roughly 7700 meters on 41 holes, we have got assays from 35 so far, and every hole has hit a reasonably good grade of ore.ÔÇØ He points out that the company is fortunate to have most of the previous infrastructure in place, including piping, water lines, and electrical lines for the mines. ÔÇ£If we had to start from scratch to construct services like roads, municipal water and power, it would cost at least $50 million. In the 1930s this was the largest community north of San Francisco, about 10,000 people with schools, police, fire station, hospital, banks, housing. Most of those buildings are still standing.ÔÇØKocken calculates that by the spring of 2008, theyÔÇÖll have a good indication of how much ore is in the area between the three mines; theyÔÇÖre looking for 350,000 tons, with the potential for 500,000 tons, which would increase mill operation from 100 to 280 tons per day. ÔÇ£At 100 tons itÔÇÖs barely covering the expense of exploration, but all the equipment is ready to go, and hopefully weÔÇÖll be pouring gold bars by the end of 2008,ÔÇØ he says. After that theyÔÇÖll look at the lower levels of this previously unexplored area, and once in production, theyÔÇÖll look at pumping out the lower levels of all three mines to see whatÔÇÖs there. ÔÇ£In the early days they were looking for a half-ounce and higher grade ore, but at todayÔÇÖs gold prices, one-quarter of an ounce is good profit for the shareholders. We have a good base of investors, but we could always use more.ÔÇØ