LATIN AMERICA — High American Gold narrows focus in Argentina

After spending the last half-year separating the wheat from the chaff among its Argentine property holdings, High American Gold (HIAM-C) is focusing its attention on two promising gold-silver prospects.

High American began life more than a year ago as a privately held company, Stromatalite Resource, which acquired an 80% interest in a land package of 54 precious and base metal properties covering 2,000 sq. km in 10 Argentine provinces.

The vendor, Hector Gando, retained a 20% interest in High American Gold International, the Argentine subsidiary that owned the properties, and the right to a 20% participating interest or 10% carried interest. As well, Gando had the right to a similar interest in any new properties High American added to its portfolio.

Stromatalite then completed a $3.6-million private placement (6 million shares at 60cents each) and merged last spring with the publicly traded shell company Intex Mining. The new corporate entity, named High American Gold, went public in July 1997 and has since applied for a Montreal listing.

The company has now homed in on the two most prospective properties: Oesteroche, a gold-silver porphyry property situated in northwestern Argentina’s Salta province, and Pirineos, an epithermal gold-silver property in southern Argentina’s Santa Cruz province.

Gando recently reached a preliminary agreement with High American to sell his 20% interest in both Oesteroche and Pirineos. As part of the deal, High American is returning the remaining properties. Further details will be released after the deal is signed. This latest deal with Gando has paved the way for High American to seek out joint-venture partners for Oesteroche and Pirineos.

President James Decker says the company intends to open an office in Mendoza or Salta, in order to give the company better access to its properties as well as to Chile and other South American countries.

At the 5,400-ha Oesteroche property, High American has completed two mapping, trenching and sampling programs over a 600-by 400-metre tourmaline-breccia pipe.

In the first program, about 700 rock and soil samples were collected from a 25-metre grid over the breccia pipe. Another 115 samples were taken from areas adjacent to the pipe. Soil samples showed gold contents as high as 111 grams per tonne and one rock sample graded 12.7 grams.

In the second phase, High American took 197 rock samples along a newly built road on the north side of the breccia, and a further 74 soil samples along the road on the south side, where rock exposure was limited. Five hand-dug trenches exposed fresh rock faces. Highlights include a rock sample grading 4.18 grams gold and a soil sample grading 2.44 grams gold.

The gold at Oesteroche is in metamorphosed Ordovician phyllites and quartzites adjacent to the Inca Viejo felsic intrusion. Both are overprinted with epithermal high-sulphidation alteration and intruded by Tertiary rhyolite and dacite breccias. Intersecting north- and northwest-striking faults control the vein and breccia locations. Drill targets have been identified, and a US$575,000 drilling program is planned.

The company mapped and sampled the Pirineos property — made up of eight smaller properties totalling 39,000 ha — in November and December.

Mineralization is in a vein system hosted by rhyolite tuff and ignimbrite that has been brecciated and silicified along major north-south trending zones, 50 to 150 metres wide and up to 2 km long. Of the 500 rock samples taken from eight different structures, the highest values obtained were 4.6 grams gold and 852 grams silver per tonne.