Bayfield Ventures Explores with BHP in Mongolia
By Peter Fitzhenry
June 20, 2007
Since Rio Tinto and Ivanhoe Mines announced an agreement in principle with the Mongolian government to develop the Oyu Tolgoi Mine in the South Gobi region of Mongolia, investor interest has been piqued about the opportunity of exploiting the minerals embedded in the metal-rich East Asian country. Bayfield Ventures (TSX.V:BYV) is one junior company with a promising copper-gold and coal position in the desirable area.
In June 2005¬¬¬¬¬¬, Bayfield Ventures signed an agreement with BHP Billiton where BHP could earn 51% interest in Bayfield’s Hurmen Uul Mongolian copper-gold and coal property. BHP Billiton began an exploration program on the properties in October of 2005 and is currently earning 51% interest in the Hurmen Uul properties by paying 100% of exploration expenditures.
Mining analyst Terence Ortslan, in an interview with Katherine Young of Resourcex Group, described the opportunity for mining companies in Mongolia. “[Mongolia is] one of the great metallogenic belts of the world. It has been underexplored and has been explored only to Eastern block standards. Russian, Czech, Bulgarian and East German geologists have been through the properties with their own systems and devices, approaches and exploration methodologies. It’s not been seen a lot by the western technology and expertise.”
The Mongolian government, according to Ortslan, is recognizing the value of its resource assets while learning how to best work with foreign investors to both develop and protect Mongolian interests. Ortslan outlines the issues, “In short, Mongolia has everything to offer, and the western exploration companies have a lot to offer. The learning process is still on. Mongolia is careful and protective of what they want out of the industry. Obviously, they have also seen enormous interest by their neighbors, not only by us, but also by the Chinese and the Russian resource business people. And [the Mongolian government] knows and understands that the western companies are far more into corporate governance, into the environment, into World Bank Standards than Chinese or Russian possible counterparts.”
With the Mongolian government making historic deals with the likes of Rio Tinto and Ivanhoe Mines, Bayfield is well-positioned next to a partner like the major mining company BHP Billiton. Protected by the size and power of one of the largest mining companies in the world, Bayfield is poised to protect its interests.
According to Bayfield’s website, the Mines Branch of Mongolia carried out geophysical and geological studies in the area of Bayfield’s Hurmen Uul properties in the 1980’s and turned up findings of “coal, several porphyry gold occurrences (granitoid related gold), instances of placer gold, and outcroppings of laterites containing weathering crust nickel exposure.”
Also notable, the Hurmen Uul properties are located in the same South Gobi region of Mongolia as the Rio Tinto/Ivanhoe Oyu Tolgoi world-class deposit and the legendary Tavan Tolgoi deposit. Ortslan puts the Tavan Tolgoi in perspective, “the Tavan Tolgoi is one of the biggest undeveloped coal mineral resources and reserves on this planet. That can feed China and Mongolia for decades to come…It’s a massive, beautiful project, I’ve never seen anything like it before in my life. It’s unprecedented.”
Similarly impressive, the Oyu Tolgoi deposit is estimated to contain measured and indicated resources of 1.15 billion tonnes grading 1.30% copper and 0.47g/t gold for an estimated resource of 32.9 billion pounds of copper and 17.3 million ounces of gold. The additional estimated inferred resource adds another 26.2 billion pounds of copper and 8.4 million ounces of gold.
Bayfield is currently waiting in queue with many other foreign mining companies in Mongolia for new licenses. Bayfield’s President, Don Huston explained, “Bayfield has been forced to make a reapplication, as hundreds of other companies have been in Mongolia at this time, foreign companies, Canadian or Australian or whatever to make a reapplication to the Mongolian ministry of mines to have the ministry of mines reissue new licenses for this specific area. It is the way that business has to be done there right now.”
However, with a major like BHP Billiton for a partner, Huston is confident that the licenses will be issued. “We’re very optimistic we’ll get those. The hardest part is the time.” Huston estimates that Bayfield will proceed at the Mongolian properties within a few months. “They [the Mongolian people] are just coming to their annual summer festival where I understand work stops for a month. It will probably be three months before we hear.”
In addition, Bayfield has gold properties both in Rainy River Ontario and in Red Lake Ontario. Exploration programs are underway on the company’s Claim Block A Rainy River property while the winter 2007 exploration program on Block B has recently been completed. The properties are situated approximately1000 metres (m) from Rainy River Resources’ newly discovered gold zone where the company has reported intercepts of 23.5m of 10.6g/t gold and 22.6m of 17.0 g/t gold. Drilling is planned for Blocks A,B and C this summer.
Bayfield also owns a 24.5% interest in the Red Lake Ontario, Baird Gold property. Skyharbour resources owns another 24.5% while the remaining 51% is held by Goldcorp Inc. The Red Lake area is home to several gold mines where production and proven resources total upwards of 30 million ounces of gold. The Company is currently in negotiations with Goldcorp for an interest in a much larger land package in the area, which is presently owned by Goldcorp.
Rounding out its portfolio, Bayfield is also exploring for diamonds in the Fort a la Corne diamond area of Saskatchewan. The company’s 5 claims are located near the Shore Gold and the De Beers-Shore Gold recent diamond discoveries.
Bayfield Ventures stock price was $0.55 on Tuesday June 19, 2007 with volume trading at 17,900.
This article is intended for informational purposes only and should not be considered as a recommendation to buy stock in any company. Although the author has made efforts to verify the information contained herein, the accuracy of all the information cannot be guaranteed. As always, it is recommended that you commit considerable time to completing your due diligence before buying stocks in publicly traded companies. A fee has been paid for the creation and distribution of this article.
