Francisco finds new targets in Guatemala

Vancouver — With a fourth round of drilling underway on the Marlin Main zone, Francisco Gold (FGX-V) has identified additional targets on its ground surrounding the promising Guatemalan gold property.

Some 30-km southeast of Marlin, regional reconnaissance has discovered a 1.5-km-long northwest striking quartz vein structure averaging from 5-to-20 metres in width. Channel sampling across the structure has returned grades up to 1 gram gold and 173 grams silver per tonne.

Moving 45-km south of Marlin, the company has identified a low sulphidation epithermal gold target, dubbed Jesse. Covering a 500-by-200-metre area, the prospect yielded from 0.2-to-2.2 grams gold in grab samples.

The third new area of mineralization lies 50 km west of Main project where a 10-sq.-km area of hydrothermal alteration has been outlined. Surface samples collected to date returned up to 0.5 gram gold.

Drilling has also resumed with Francisco testing geophysical anomalies west, east and south of the Main zone, as well as the 900-metre-long Los Cochis structural corridor. The first three rounds comprised 46 core holes outlining near surface, oxidized gold-silver mineralization over a 450-by-250-metre area.

The Marlin property lies 140 km northwest of Guatemala City and 60 km from the Mexican border. The project is part of a package of properties originally held by Montana Gold, a privately owned Canadian company. Since it began exploration work in Guatemala in 1996, Montana has staked more than 6,000 sq. km of mineral concessions along a major structural trend in the country’s western region. Francisco acquired Montana by issuing an initial 650,000 shares on closing the deal and if 1.5 million oz. gold-equivalent ounces are defined (proven and probable), it will issue up to 1.4 million more.

The Main zone is a low-sulphidation, epithermal system hosted in Tertiary volcanic and volcaniclastic rocks. The main “Marlin complex” comprises a series of massive-to-fragmental pyroclastic rocks, which host a large part of the Main zone’s high-grade mineralization. An underlying volcaniclastic sequence is composed of conglomerate-to-fine sandstone-siltstone rocks that can also host low-grade mineralization.

In Mexico, engineering work needed to complete a final feasibility study on Francisco’s wholly-owned El Sauzal project is continuing. Final test results from a bulk metallurgical sampling program returned an average gold recovery of 94%.

Situated 13 km west of Batopilas in Chihuahua state, El Sauzal contains an oxide gold reserve of 20.9 million tonnes grading 3 grams gold per tonne, equivalent to 2 million contained ounces. Prefeasibility work has deemed the reserve minable by open-pit methods.

Geologically, El Sauzal represents a high-sulphidation, epithermal gold deposit. The host rocks comprise andesite flows, tuffs and breccias, which grade upward into intercalated, highly altered dacitic volcanic rocks. Gold mineralization occurs in the upper dacite along with quartz-kaolinite- dickite-alunite alteration. The dacites are overlain unconformably by post-mineral rhyolite and dacite breccias and conglomerates that contain no significant gold mineralization.

Interest income propelled the cash-rich company to a net profit of $303,369 in the third quarter of 2001, compared to a profit of $428,198 in the corresponding period last year. During the quarter ended September 30, the company spent $196,639 on the E1 Sauzal project, $333,653 on the Marlin property and $102,855 on other exploration activities. As of September 30, Francisco had $32.2 million in cash and short term investments.