EXPLORATION ’99 – Cerro Dorado drilling in Chile

Cerro Dorado (CDCH-O) is preparing to drill the Cenizas gold property in northern Chile, having recently acquired the property from Fremont Gold (FGLD-O).

The junior will drill up to 20 reverse-circulation holes totalling 2,500 metres along the West Fissure zone.

Several untested anomalies are targeted, including a zone averaging 1 gram gold per tonne over 42 metres in a trench. Another interval runs 1.1 grams gold per tonne over 28 metres.

Cerro Dorado took over Fremont’s option from Rio Tinto (RTP-N) in October. Cerro Dorado must spend US$1 million on Cenizas over the next three years.

Rio Tinto still has the right to earn a 51% interest in the property by spending US$2 million over two years. If it chooses not to exercise that right, it would retain a 2% net smelter royalty on production up to US$10 million.

Cerro Dorado has also acquired Fremont’s 70% interest in the Milagro gold property, as well as an option to earn an 80% stake in the Resguardo gold property by spending US$1.5 million on exploration.

Meanwhile, the company continues to explore its Lobo Solitario gold property, northwest of Santiago. Mapping has led to the identification of several veins parallel and sub-parallel to the main Fortuna Mine vein. A geophysical survey is nearly complete.