Reverse-circulation drilling by Alamos Gold (AGI-T) on the Escondida Hanging Wall zone continues to return some impressive near-surface gold grades from the Mulatos deposit in Mexico’s Sonora state.
The latest batch of 11 holes are highlighted by hole no. 39, which yielded 24.4 metres running 35.8 grams gold per tonne, including 9.15 metres of 89.2 grams. Hole no. 37, about 50 metres to the northeast, returned 29 metres of 21.3 grams gold, including 13.7 metres of 41.2 grams. Nearby hole no. 47 encountered 24.4 metres averaging 27.3 grams, including a 15.2-metre interval of 42.9 grams. The remaining holes generally returned grades of 3.6-11.2 grams over widths of 3-23 metres. The intervals do not represent true thickness.
Alamos says that drilling has now closed the deposit off to the north and west, while it remains open to the southeast and along strike to the northeast. So far, the zone has been tested with 33 holes, with another 15 planned for the northeast and south areas. The company also plans a large diameter core-drilling program designed to collect bulk samples for metallurgical test work.
Alamos believes the zone may represent the faulted extension of the historic high-grade mineralization Mina Vieja deposit, which was responsible for the bulk of previous gold production at Mulatos.
Meanwhile, mine construction at Mulatos is essentially complete, with the primary crusher currently being commissioned and secondary and tertiary crushers slated to soon be operational. Integrated crushing and conveyor systems are expected to come on line by month’s end. Primary and run-of-mine ore is currently being hauled to the leach pad.
The newly constructed US$76-million mine is expected to produce up to 150,000 oz. gold per year over at least 10 years. Cash costs for 2006 are forecast to average US$200-US$210 per oz.
The Escondida zone is situated 500 metres northeast of the producing Estrella pit. Reserves there total 36.4 million tonnes grading 1.64 grams gold, for about 1.9 million contained oz.
Shares in Alamos ended 77, or nearly 10%, better at $8.60 following the news in Toronto on Jan. 16.
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