William prepares to pour gold at Velardena project

Within a few short weeks, William Resources (TSE) will begin pouring gold from a mine that has a long and sporadic production history.

Situated in Mexico’s Durango state, the Velardena project is, in many respects, characteristic of the region, which has been a key producer of silver since pre-colonial times. Even though mining methods available at that time were crude, the epithermal silver-lead-zinc veins were easily accessible and rich enough to yield large quantities of ore. Eventually, however, the veins were depleted and the ancient miners and conquistadores moved on to other, more profitable ground.

It was not until the turn of this century that many of these historic prospects, including those at Velardena, were given another look. Advances in underground mining rendered many of the old mines economic once again (especially those with deep sulphide reserves), yet they stayed re-opened for only a short period, for, as before, the economic ore became exhausted.

With the latest wave of technological improvements, much of the uneconomic material left behind is now looking attractive. At Velardena, William is planning to mine oxide material that, until recently, was not amenable to processing. In addition, improvements in exploration techniques have shown that additional sulphide ore exists, at depths greater than those previously explored.

Recently, The Northern Miner toured the property and witnessed, first hand, the progress being made on underground development and construction of surface facilities.

In addition to installing an underground hoist and driving new drifts, William is putting the finishing touches on its new carbon-in-leach plant, which is expected to be operational by the first week in April. Initially, the plant will process 250 tonnes per day, rising to 400 tonnes before the end of the first year; within four years the rate is projected to rise to 900 tonnes.

The company is also building a haulage road between the mine and plant, as well as a tailings dam and a well.

At present, the Velardena is known to contain 3.8 million tonnes averaging 3.71 grams gold and 298 grams silver per tonne, plus 0.28% copper, 1.53% lead and 1.98% zinc.

By paying the property vendor US$1 million, William is acquiring the 20% of the project that it does not already own. The transaction is expected to close shortly.

The Velardena project is near the boundary between the predominately volcanic Sierra Madre Occidental domain and the sedimentary Sierra Madre Oriental domain.

Many of the epithermal vein and breccia silver-lead-zinc

deposits are on the margins of uplifted blocks of limestone. These polymetallic deposits were formed when metals precipitated from epithermal fluids migrating upwards along block fault conduits.

William is focusing on oxide material in the Santa Juana mine, one of six past-producing operations on the 175-hectare Velardena property. The mine is underlain by several diorite plugs that intrude on the overlying Cretaceous-age limestones. Gold, silver, copper, lead and zinc mineralization is hosted in veins that are related to northwest-trending, axial and planar cleavage developed during an episode of regional folding.

Narrow veins

While the veins are narrow (usually less than a metre wide), mapping and drilling by William suggest they are rich, continuous and predictable. Three veins of the past-producing Santa Juana mine have strike lengths of between 200 and 1,600 metres and extend up to 200 metres in depth.

In addition to the veins, the mine contains mineralized structures known as chimneys, formed at the intersection of the axial planar cleavage and a secondary, east-trending fracture cleavage. These rich deposits were the prime target of miners at the turn of the century.

Work completed on one chimney zone indicates that it, like the veins, is rich, continuous and predictable. Drilling of the down-rake projection of the zone has intersected mineralization 140 metres below the lowest level of the mine. Channel sampling between the 14 and 15 levels has returned encouraging results. The weighted average of 19 channel samples indicates the chimney has an average width of 0.71 metre and an average grade of 12.73 grams gold and 244.2 grams silver per tonne.

Mineralization at the Santa Juana is divided into three zones: the East, which consists chiefly of sulphide mineralization; the West, which consists of oxides; and the Central Stockwork, which also consists of oxides. Sulphide mineralization is hosted in diorite, whereas the oxides are typically found in limestone or limestone skarns.

William will use three methods to mine the Santa Juana.

The bulk of the tonnage will be mined using shrinkage and longhole stoping, the minimum mechanized mining width being 80 cm.

Two groups of contract miners will be employed to mine the narrow veins in the old workings. One group will mine veins that are 40-80 cm wide, while the other will mine the even narrower veins, which are less than 40 cm wide.

So that miners can gain access to ore below the 15 level, the 3-compartment shaft is being deepened to 135.5 from 95 metres beneath the surface. A new level, between the 15 and 16 levels, is being driven, and will serve as the main haulageway.

William’s geologists have been sampling all past-producing stopes.

According to Jeff Kenwood, chief mine geologist: “We’ve literally channel-sampled all the old workings to build a computerized database, and, while this has been time-consuming, it will be an enormous help in directing future exploration both in the mine and around the district.” Kenwood and his colleagues are interested in determining the relationship between gold content and depth.

“We’ve noticed that the gold grade has increased between the 12 and 16 levels,” explains William Pearson, manager of geology. “The gold grade has doubled, jumping from about 6 grams to 12. This increase is typical of epithermal systems, and we think that, as we get deeper into the system, the gold grades should go even higher.”

William expects to spend $2 million on exploration in 1996. In addition to searching for the down-rake extension of the chimney zone, geologists are exploring the possible on-strike extensions of the known A, B, C zones and the newly discovered G vein.

The company will also acquire additional property, more than doubling its current land holdings in the region within the next few years. In particular, it hopes to gain a stake in the Buenaventure claim group, which adjoins the Velardena property.