Zaruma sizes up Realito (August 20, 2004)

Zaruma Resources (ZMR-T) has tabled an initial resource estimate for the Realito structure on the 97-sq.-km San Antonio property in Sonora, Mexico.

Based on 4,700 metres of drilling in 36 diamond drill holes sunk in June, underground measured and indicated resources in the Golfo de Oro, Centenario, and California zones total 1.7 million tonnes grading 4.4 grams gold per tonne, with the bulk (1.2 million tonne of 4.7 grams) found in the Golfo de Oro zone. Another 162,000 tonnes of inferred resources in the Golfo de Oro and California zones grades 4 grams gold. The estimates are based on a cutoff grade of 2.5 grams gold and a gold price of US$325 per oz.

The open-pittable portion of the measured and indicated resource at Golfo de Oro and (mostly) California weigh in at 551,000 tonnes 2.1 grams; some 72,000 tonne of 2.1grams at California are categorized as inferred resources. The estimates employ a cutoff of 1 gram gold and a gold price of US$375 per oz.

The resource occurs in closely spaced breccia bodies stretching over a strike length of 700 metres.

“We are pleased with these results, as the resource model indicates that we have successfully delineated resources along the Realito structure that are highly likely to be mineable, including the still open-ended Centenario zone,” says Zaruma’s chief executive Thomas Utter.

The Cerro Sapuchi zone, 1 km to the north, was excluded from the latest estimate, as there has been no recent work there. A non-compliant NI-43-101 estimate in 1996 pegged resources there at 1.4 million tonnes averaging 2 grams.

Zaruma plans follow-up work aimed at expanding the Realito resource, which remains open along strike to the east and west.

Meanwhile, regional surface exploration on several large gold-in-soil, rock-chip and geophysical anomalies elsewhere on the property continues. Promising targets have been identified along the Corina-Mina Grande-Cerro Sapuchi trend and between the California zone and newly drilled Centenario zone on the Realito structure.

An exploration hole sunk to test an induce-polarization anomaly in the Centenario area encountered several mineralized intervals, including a shallow, 1.35-metre section running 8.8 grams gold.

The San Antonio project is also home to the Luz del Cobre copper deposit that hosts an estimated 6.6 million tonnes averaging about 0.8% copper. The project is situated in the San Javier mountain range, 140 km southeast of the city of Hermosillo in Sonora state.

The news sent shares of Zaruma 2.5, or 20%, higher to 15 in late afternoon trading in Toronto on Aug. 20.

Zaruma ended the recent second quarter with a net loss of US$722,000 (or 1.3 per share), compared with a year-earlier loss of US$427,000 (1.1 per share). At the halfway mark, the company’s loss totalled just shy of US$1.4 million (2.6 per share), compared with a loss of US$709,000 (1.8 per share) during the corresponding period of 2003. The wider losses are attributed to increased project activity.