EXPLORATION 1997 — Yamana Resources a leader among globetrotting juniors

A Spokane, Wash.-based company with a Toronto listing has assembled a portfolio of properties stretching from the South American countries of Chile, Argentina and Paraguay to Indonesia and Papua New Guinea (PNG).

While Yamana Resources (YRI-T) recently acquired exploration and mining leases on three gold and copper properties near its own head office in Spokane, most of the company’s exploration efforts have been in foreign districts. These include: the 86,000-ha Santa Cruz-Vanguardia project and Fin del Mundo and Tierra del Fuego properties in southern Argentina; the Paraguari and Concepcion concessions in Paraguay; the 126-sq.-km Viento claim group in Chile; 12 contracts of work (CoWs) comprising 2.7 million ha in Kalimantan, Indonesia; and an exploration licence in PNG.

“Our central focus is to look for substantial metal targets,” says Yamana’s vice-president, Greg Taylor. “Three-quarters of our properties are gold-related. Our strategy is straightforward: identify properties as targets and then combine with a senior partner to develop them.”

The company holds 3.4 million ha in six countries, with 34.2 million shares outstanding. Barrick Gold (ABX-T) is the largest shareholder, with 14.2% of Yamana’s shares.

Argentina

“Argentina was what drew us to South America,” says President Victor Bradley.

The junior has its own assay lab at the Vanguardia project in Santa Cruz and recently received final results from the 3,346-metre first phase of drilling at the Martinetas epithermal gold prospect. Results confirm earlier signs of a significant geologic resource of silver mineralization.

Mineralization was encountered in 19 of the 20 reverse-circulation holes drilled over a total of six targets.

On one of these, a mineralized body was defined by 10 holes. The best intercepts were 132 metres of 1.02 grams gold and 3.8 grams silver in hole 13, and 98 metres of 1.22 grams gold and 4.9 grams silver in hole 18. The mineralized area covers at least 440 metres north-south by 210 metres east-west, and is up to 200 metres deep and open to the south and west.

The next phase of drilling is scheduled for the Microonda property, southwest of Martinetas.

Last fall, Rio Algom (ROM-T) picked up an option on the Argentine concessions that Noranda (NOR-T) had dropped. The former can earn a half interest in the Santa Cruz properties by spending US$20 million on exploration over five years. To increase this to 60%, Rio must complete a feasibility study on each property and make a production decision.

At the 195,000-ha Tierra del Fuego concession, in the country’s southern tip, Westmin Resources (WMI-T) can earn a 60% interest by spending US$6.3 million over four years and carrying out a feasibility study.

Argentina has been slow in reforming its laws to attract foreign investment (unlike neighboring Chile), and this is especially true in regard to mineral development. “It wasn’t until 1989 that the mineral industry was declared open for world-wide exploration,” Bradley recalls. “Today, Argentina has a land tenure system that works, and the provinces cannot charge more than 3% in royalties.”

Chile

Yamana’s Viento claim group in northern Chile’s Taltal province covers multiple geophysical anomalies covered by overburden.

For Yamana, the new, wholly owned acquisition is regarded as a key position in the southern end of “Porphyry Alley,” a north-south corridor of porphyry copper deposits in the Atacama Desert.

The project originated when Yamana geologists obtained geophysical data on regional rock density variations from previous plate tectonics research. The program detected a magnetic anomaly measuring 3 by 10 km, which could indicate a copper skarn deposit formed by a mineralized igneous intrusion into buried limestones.

The company also outlined a 1-by-3-km induced-polarization anomaly, which is open to the south and averages fewer than 100 metres deep.

Paraguay

Paraguay has undergone virtually no mining, and, consequently, has no laws governing mineral exploration. Bradley was responsible for negotiating the contract for the properties clause by clause — a contract which, he asserts, will serve as the basis for Paraguay’s new mining law.

“We don’t have any hangups about being first [to explore in the country],” he says. “You pay a price sometimes, but if you’re lucky you can really scoop the pot.”

At the 500-sq.-km Paraguari concession, the company has delineated a 15-sq.-km area of interest. Orientation sampling in 1995 identified five gold anomalies in streams and soils, which appear to be related to a series of diatremes, or breccia pipes, associated with one of the world’s largest alkalic rock complexes. The strongest anomaly is indicated by stream-sediment pan concentrate values of up to 14.4 grams gold.

Indonesia

Indonesia accounts for the bulk of Yamana’s holdings. The company is the third-largest landholder in Kalimantan and has applications for 12 CoWs, comprising 27,000 sq km.

In February, the company reported an aeromagnetic anomaly in the northern part of its Block 1 CoW, 95 km north of the massive Busang deposit. Because of the rugged jungle terrain, only a preliminary examination of down-stream rock float from the anomaly has been possible.

Two rock float samples returned: 1.95 grams gold and 3.5 grams silver per tonne, as well as 920 parts per million arsenic, from a hydrothermal breccia with quartz-sulphide matrix; and 0.95 gram gold, 5.1 grams silver and 1,060 parts per million arsenic from a silicified and brecciated sediment with quartz-sulphide veins.

Yamana’s 100% interest in the CoWs remains subject to Barrick’s right to advance three resources (as identified by Yamana) to production, in which case Barrick would acquire a 75% interest in those CoWs.

Despite the ongoing controversy surrounding Bre-X Minerals’ (BXM-T) claim to the Busang deposit, Bradley predicts the Kalimantan rush is not yet over.

“Kalimantan will draw a lot more attention because parts of it are virgin territory,” he says, while, at the same time, warning, “It’s a different part of the world, and companies had better understand how to do business there.” Papua New Guinea

In Papua New Guinea, Yamana can earn up to 51% in Union Mining’s gold exploration licences, as well as acquire up to 17.1% of the Australia-listed company. To do so, it must spend A$9 million on exploration over four years.

The deal includes a 2,305-sq.-km land package, with eight exploration licences and two applications in Milne Bay and Oro provinces.

Also, Yamana will increase exploration funding for the PNG properties by A$1 million to A$10 million over the next four years.

Washington state

In its home state of Washington, Yamana has acquired two prospective gold properties, and another prospective for copper and cobalt. Historic mining and prospecting have taken place on all three properties, which comprise a total area of 958 ha. Drilling targets have been developed on all three properties.

Meanwhile, Yamana has completed surface work on the 634-acre Palmer Mountain prospect, a volcanogenic massive sulphide target. “Here we’re looking for several tons of high-grade copper, with important gold and cobalt credits,” Waters says.

Underground mining during the First World War produced 3,500 tons averaging 3.1% copper and 0.03 oz. gold. Old mine maps of workings on the property show high-grade copper interceptions of 1-10% in zones up to 10 ft. wide.