LATIN AMERICA — More juniors, seniors flock to Argentina

With dreams of huge deposits dancing in their heads, more and more junior and senior companies are heading toward Argentina in search of gold and base metals.

Orko Gold (ok-v) recently began a 1,500-metre program of reverse-circulation (RC) drilling on the 54.5-sq.-km La Ortiga property in the Valle del Cura area, 12 km east of Veladero. The program is designed to test six priority targets within brecciated and silicified zones. Several surface samples collected from trenching in the silicified zone yielded gold values in excess of 1 gram, with the highest being 11.8 grams.

Under an agreement with TNR Resources (TRR-V), Orko can earn a 60% interest in the La Ortiga, Valle de Cura and EL Fierro gold-silver properties by spending US$3 million on exploration prior to May 25, 2004, and paying US$340,000 and issuing 600,000 shares over three years.

TNR holds 15 prospective properties in west-central Argentina. TNR acquired the package a year ago from Solitario Resources (SLR-T) for 1 million share units.

The land package includes the 5,000-acre Canada Hondo project in the San Luis province, where Australian miner Newcrest Resources recently walked away from a joint venture after spending US$375,000 to drill three core holes that twinned and deepened previous RC holes. Newcrest returned the property to TNR as a result of budgetary constraints.

Viceroy Resource (VOY-T) is undertaking a US$2-million exploration program at the Gualcamayo gold project in San Juan province. This second phase of work is utilizing two core rigs, with infill drilling being carried out in the eastern portion of the Cerro Diablo zone, and the downdip extension being tested.

Geological mapping, sampling and an initial 4,000 metres of drilling confirm a widespread system of low-grade epithermal gold mineralization hosted in brecciated limestones, marble and dacite porphyries. The main mineralized zone is traced for at least 1,000 metres along strike and up to 200 metres downdip. Highlights of previous drilling results include:

• 0.94 gram gold per tonne over 136 metres in hole 1;
• 2.7 grams gold over 62 metres in hole 2;
• 1.1 grams gold over 130 metres in hole 5; and
• 1.3 grams over 47 metres in hole 10.

Viceroy is earning a 60% interest in the Gualcamayo project from Mincorp Exploraciones by spending US$5 million on exploration. Mincorp is a joint venture fomerly held between Minorco (MNRCY-Q) and the Argentine conglomerate Perez Companc. Anglogold (AU-N) recently acquired the gold assets of Minorco for US$492 million, including an interest in the newly constructed Cerro Vanguardia mine in Santa Cruz.

IMA Exploration (IMR-V) picked up more ground in the Gualcamayo region, increasing its holdings in this area to 24,475 ha. In addition, IMA holds more than 37,000 ha in the emerging Valle del Cura region, where a reconnaissance program on the Potrerillos property yielded values of up to 0.23 gram gold and 117 grams silver from grab sampling of talus boulders.

The company also has holdings in the Pelambres and La Honda districts in the province of San Juan, for a total land package of 179,600 ha. Reconnaissance work is under way on several of these properties.

In the northern province of Salta, about 50 km east of the Chilean border, Corriente Resources (CTQ-T) has signed a joint-venture agreement with London-based Rio Tinto (RTP-N) concerning a 2-by-2.4-km block of ground within the Taca-Taca copper-gold property. This area of the property, called Cerro Cobre, shows potential for near-surface, higher-grade copper oxide mineralization. The area of interest is covered by a leached cap that has yielded values of 0.1-0.3% copper in surface trenching.

Rio Tinto can earn a 70% interest in the Cerro Cobre block by spending US$10 million over the next six years, as well as paying US$1 million. The balance of the Taca-Taca project remains 100% Corriente.

An initial 40-to-50-hole program is targeting three areas of shallow oxide copper and gold mineralization that is peripheral to a central copper-gold porphyry zone that was outlined by drilling in 1996 and 1997. Based on 33 drill holes, BHP Minerals, a subsidary of Broken Hill Proprietary (BHP-N) calculated a global resource of 440 million tonnes grading 0.58% copper, 0.2 gram gold and 0.02% molybdenum.

Mansfield Minerals (MDR-V) is now in its fourth year of exploring the Puna region of northwestern Argentina. The Vancouver-based junior can earn a half-interest in the Santa Rosa property from Argentina Gold (ARP-V) by spending US$500,000 over three years. The property is in the province of Salta. Mansfield has reported encouraging results from eight trenches dug across the Tom showing, four across the Kelly zone, and one across the Porphyry zone. Results ranged from 0.89 to 84.5 grams gold and 3.8-192 grams silver over trench lengths of between 1.5 and 14 metres.

Mansfield can also earn up to a 70% interest from Aranlee Resources (ARB-V) in the Panchos Arias property, which is contiguous to Santa Rosa.

Recent work on the company’s Incahuasi and Las Burras copper-gold porphyry prospects, 50 km northwest of the city of Salta, shows textbook metal zonation with anomalous copper, molybdenum and gold hosted in a quartz stockwork phyllic zone. Results from trenching and geophysics have yet to be announced.

In 1998, Mansfield was awarded title to the Cerro Samenta property by the court of appeal of Salta. The property has been the subject of a court challenge by Salta resident Jorge Daroca since mid-1996. Cerro Samenta is regarded as a highly prospective, Chilean-style copper porphyry prospect. Mansfield and joint-venture partner Teck (TEK-T) had completed two drills on Samenta, when they shutdown exploration in December 1996, following a lower court ruling.

The dispute had focused on the location of claims in relation to the geographical point known as Cerro Samenta.

Mansfield is awaiting the outcome of a constitutional complaint lodged by Daroca with the Supreme Court of Salta province. Daroca alleges that his constitutional rights were violated by the government’s lack of due diligence in maintaining claim maps. Acceptance of the complaint would allow Daroca the right to deliver arguments addressing this issue. Mansfield would have the right to rebut such arguments.

In other news, Mansfield has entered into an option agreement with Clarion Resources on the Cerro Gordo gold-silver property in Salta. Clarion can earn a half-interest by spending US$1 million on exploration and paying US$300,000 over three years. Mansfield has carried out geological mapping, trenching and 2,400 metres of drilling in nine holes. Of significance is hole 97-7, which hit 57 metres grading 1.11 grams gold and 1.12% copper (including 14 metres of 2.3 grams gold and 2.26% copper), starting at a downhole depth of 109 metres.

Partners Golden Peaks Resources (GL-V) and Primo Resources (PRI-V) are currently drill-testing the Vallecito prospect at their Sierra de Las Minas project, which straddles the border between the northwestern provinces of La Roija and San Luis. A series of shallow, closely spaced drill holes, along with trenching, has tested the gold-silver zone over a strike length of 80 metres and to a vertical depth of 100 metres. Values from four of the reported holes range from 1.64 to 11.9 grams gold and 2.38 to 14.42 grams silver, over widths varying from 0.5 to 9.71 metres. A fifth hole intersected 4.5 metres averaging 26.9 grams gold, 163 grams silver and 1.1% copper at a down-hole depth of 69 metres.

Mitsubishi of Japan can earn a 30% interest in the project from Golden Peak and Primo by spending US$1.5 million on exploration.

Pacific Rim Mining‘s (PFG-T) most advanced project is the Diablillos silver-gold project in northern province of Salta. The proje
ct is being advanced by Barrick, which can maintain a 70% interest by making a production decision by June 2000, or by spending US$4 million per year on exploration from June 2000 onward.

An independent resource estimate prepared by Mine Development Associates estimates that the Oculto deposit at Diablillos contains an inferred resource of 49.5 million tonnes grading 68.3 grams silver and 0.42 gram gold, representing 109 million oz. silver and 664,000 oz. gold. Pacific Rim believes the potential to develop the Oculto resource depends on the discovery of additional ounces.

Barrick is in the final phase of a detailed assessment in preparation for a feasibility study.

In 1998, Pacific Rim entered into a deal with Corriente to acquire the Fantasma project, which is adjacent to the company’s Diablillos property. Management is awaiting a decision from Barrick regarding its plans at Diablillos before proceeding with drilling at Fantasma.

At Pacific Rim’s San Francisco project in Jujuy province, initial work has outlined a hot-springs gold target. The property totals 3,600 ha and centres on an area of alteration 500-800 metres wide by 3,500 metres long. The zone of alteration is believed to be related to a low-sulphidation, epithermal gold system. Gold geochemistry is unusually strong, as 44% of the surface samples contain more than 25 parts per billion gold, with a high of 1.4 grams. Plans are expected to include a geophysical survey and trenching in preparation of drilling.

In southern Argentina, the Deseado Massif area of Santa Cruz is enjoying a high level of exploration activity. Deseado Massif is underlain by Mesozoic-age rhyolitic volcanic rocks covering about 100,000 sq. km. It is geologically prospective for epithermal-style precious metal mineralization. The newly constructed Cerro Vanguardia gold mine is the cornerstone of discoveries in the region.

Abacus Minerals (AMC-V) recently completed a 1,000-metre round of RC drilling at La Manchuria, a gold-silver prospect 80 km west of Cerro Vanguardia. The 9-hole program began in early March and is focused on expanding a mineralized trend that was defined by drilling in 1998 along a strike length of 250 metres and a depth of 125 metres. Assay results from the recent drilling are expected in a couple of weeks.

La Manchuria is one of six properties held under option from Barrick Gold (ABX-T). Abacus can acquire all six by spending US$2.75 million on exploration and issuing 600,000 of its shares. Barrick retains a back-in right to a half-interest. Abacus has since optioned a half-interest in the Sarita properties to sister company Redstar Resources (RST-V), while optioning Snowfield Resources (SNO-V) a half-interest in the Cerro Moro, Cerro Negro and Rio Oro properties.

Abacus completed 14 holes at La Manchuria in 1998, encountering 58 metres averaging 6.5 grams gold and 22.3 grams silver, starting at a downhole depth of 45 metres in hole 98-2.

Other significant intercepts included:

• 54.6 metres averaging 4.5 grams gold and 12.1 grams silver (including an 8.7-metre interval of 24.9 grams gold and 11.3 grams silver), beginning at a downhole depth of 34 metres in hole 98-9;
• 94.5 metres averaging 0.74 gram gold and 104.6 grams silver, starting at a depth of 3 metres in hole 98-10; and
• 43.5 metres averaging 1.27 grams gold and 22.7 grams silver, beginning at a depth of 24 metres in hole 98-12.

Mineralization occurs in an epithermal sheeted quartz vein or stockwork system hosted in rhyolitic and andesitic volcanics. Abacus plans to drill another 1,000 metres at La Manchuria once it has had time to digest the pending results.

Meanwhile, Redstar Resources (rst-v) has begun geochemical and geophysical grid surveys on the Sarita properties, which lie 40 km southeast of La Manchuria. Prospecting has identified three northwesterly trending vein swarms within a 3-by-6-km area. Limited grab sampling has yielded anomalous gold, silver and base metal values. Steve Todoruk, president of both Abacus and Redstar, says he hopes to put down 6-10 holes on the Sarita property following the next round of drilling on La Manchuria.

Redstar can earn a half-interest from Abacus by spending US$2 million on exploration, paying $275,000 and issuing 200,000 shares over four years.