Space Technology

By: Alex Large
Bayfield to Drill Rainy River as Tide Turns in Mongolia

By Alex Large

June 28, 2007

Bayfield Ventures Corp. (TSXV: BYV) is a well traveled mining exploration company, but the seasoned investor will immediately recognize its guiding hand as a home town boy. Don Huston, the president, was born and raised in Red Lake, Ont., the proving grounds of massive gold finds, and learned his profession in 15 years as a geophysical contractor in northern Ontario, Manitoba, and Saskatchewan.

Readying his staff for more work around Red Lake, Huston is working his faith on the success of nearby miners. Gold finds often come in clusters and underground secrets can be teased from the earth in the sight of other players.

Bayfield has more than $1 million cash in its war chest, preparing for new projects this summer in some key mining districts around Canada. However, it’s cooling its heels on 100,000 hectares in Mongolia until the political tides there abate.

Bayfield’s property mainstay right now is in northwestern Ontario, between Fort Frances and Kenora, close to the Manitoba border. This is in the Rainy River district, where a new gold discovery appears to feature a major gold ore body. Bayfield has three properties surrounding it and has spent about $300,000 on these lands over the last six months, establishing grids and doing geophysics. It has also finished an overburden drilling program, to develop gold grain counts in the silt and gravel overlying bed rock. The overburden can vary to 100 feet in depth, in mud and clays and Bayfield is searching for pristine, sharp-edged grains of gold that have not been moved from source over the millennia by glaciers.

“We expect to be in diamond drilling for these properties in two weeks,” Huston stated. “We have about three months’ work to do at this time.”

Meanwhile, at Fort a la Corne, in central Saskatchewan, diamonds are attracting some serious players, including Shore Gold and DeBeers. Smaller Bayfield, with five diamond leases within 1 km of the successes of the larger firms, currently is entering into an optioning agreement with another mid-tier junior company on the Toronto Stock Exchange that wishes to do some exploration on Bayfield’s property there.

“Some geophysics has been done here,” Huston said, “but we anticipate over the next six months to start a much more aggressive exploration program on that ground.”

Huston has a 24.5-percent interest in the Baird property, near Red Lake, Ont. The majority owner is Goldcorp, probably the biggest boy on the block in that mining camp. He said he expects the larger partner will spend between $300,000 and $400,000 there this year.

“We are in negotiations with Goldcorp right at this time,” Huston said, “to develop an exploration program on the Baird property. I expect in the next two to three months, we will have some sort of exploration program being undertaken there. If Goldcorp was working there, I would be very much onside with my money.

“We are just now in the final phases of closing a private placement of $1.12 million, in non-flow through working capital and flow through money, which of course must be spent in Canada.”

Mongolia is getting more outside attention these days than Genghis Khan received in his. Many mining exploration companies have been active in the country’s Gobi Desert since 1998.

“At this time, Bayfield’s business partner in Mongolia is mining giant BHP Billiton. We received tremendous support in all our endeavors in Mongolia from BHP. They are in an option situation to earn a 51-percent ownership in our 100,000 hectares in Mongolia at this time,” Huston commented.

However, political conditions inside Mongolia have shifted recently for foreign investment companies. The country’s minister of mines has suggested they re-submit their applications to hold the specific licenses they had been granted earlier.

“They have found that they have to modernize the rules and regulations for miners and, of course, they want a piece of what the exploration companies have found. We have made new applications to regain the licenses we hold and we now just sit in a queue with a hundred other mining companies in the same position.

“It is tough for us to spend any exploration money in Mongolia right now, until the situation is resolved,” Huston said.

The most recent word from Mongolia is that the government has signed an agreement with Ivanhoe Mines, after which other mining interests, such as BHP Billiton and Bayfield’s, are expected to fall into line, as well.

Ivanhoe’s CEO, John Macken said in a statement on June 28th, "As provided by Mongolia's Minerals Law, the agreement provides for the government of Mongolia to own a 34-per-cent interest in the Oyu Tolgoi project. We have agreed that this partnership would own, finance, build and operate the Oyu Tolgoi project.”

Bayfield and BHP’s properties are located to the west of Ivanhoe’s Oyu Tolgoi copper-gold deposit.

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.