Pacific Minerals drill-tests 217 Gold project

Pacific Minerals (PMZ-V) will oversee a 5,000-metre program of diamond drilling on the 217 Gold project in Inner Mongolia.

Crews will test the main Northeast Gold zone, which is 1,600 metres long and up to 200 metres wide and which forms part of a larger mineralized zone that has been traced in outcrop for 4,000 metres.

The drilling will be performed jointly by Pacific Minerals and Ivanhoe Mines (IVN-T). Under an agreement, the latter is required to spend US$1 million of the proceeds from a private placement. Once it has done so, it will have a first option to acquire a 60% interest in the property by completing a feasibility study. Pacific Minerals’ holding, once exercised, will be converted to a 36.5% carried interest. Ivanhoe will be able to increase its stake to 76.5% by arranging financing to take the property into production. As a result of this option, Pacific Mineral’s interest will be reduced to a 20% carried interest, which will be subject to Ivanhoe’s right to recover its capital and carrying costs from production revenue.

The partners plan to drill 24 holes totalling 4,300 metres at the Northeast Gold zone; the remaining 700 metres will test several newly identified geophysical targets south of the zone.

Gold mineralization at 217 is hosted by Proterozoic-aged, carbonaceous slates which have been highly deformed and intruded by a series of granitic plutons. Mineralization remains open to the west and at depth. Work by the previous operator included 65 trenches totalling 2,600 metres plus 10 widely spaced holes (2,800 metres). All of the holes intersected gold mineralization. The best assayed 1.28 grams gold per tonne over 273 metres from the surface.

The new drill program will start in late July.

The 217 Gold project is covered by a 36-sq.-km exploration permit near the southeastern border of Mongolia. The property is accessible via paved and gravel roads linking the city of Baotou, which is served by daily flights to Beijing. The project has an ample supply of electricity and is near several large freshwater lakes, as well as a rail line, 60 km to the east.

JBS project

Meanwhile, Pacific Minerals is engaged in a 3,000-metre program of underground infill drilling at the JBS platinum-palladium-nickel deposit in south-central China. The drilling is designed to test the continuity of the K1 and K2 zones. Two electric drills are drilling a series of short, 20-to-60-metre holes spaced at 20-metre intervals within the floor and roof of an adit. The first phase is testing a 500-metre section of high-grade mineralization previously defined by the Chinese. The second phase will seek to verify the previous resource estimate.

To date, nine underground infill diamond drill holes from two cross-sections have been completed and the cores have been split and crushed. Samples are being assayed at the ACME laboratory in Vancouver, B.C.

The JBS property is in Yunnan province, 200 km east of the city of Kunming, which has a population of 2 million and is serviced by regular flights to all of the major cities in the region, including Hong Kong and Singapore. The property is accessible via a 45-km gravel road and paved highway.

Based on 65,000 metres of diamond drilling, the Chinese government estimated an underground resource of 33 million tonnes grading 0.42 gram platinum and 1.1 grams palladium per tonne, plus 0.14% copper, 0.15% nickel and 0.013% cobalt. The estimates are based on a cutoff grade of 0.5 gram combined platinum-palladium per tonne.

Pacific Minerals had an independent technical audit performed on the Chinese resource estimates. Results indicated an estimate of 20.8 million tonnes grading 0.61 gram platinum, 0.94 gram palladium, 0.1 gram gold, 0.155% copper, 0.27% nickel and 0.017% cobalt. The Chinese also estimated an inferred resource of 9.4 million tonnes grading 0.9 gram platinum, 1.77 grams palladium, 0.2% copper, 0.21% nickel and 0.017% cobalt. This resource is entirely within the North Ore zone.

The JBS property is also subject to a deal with Ivanhoe. Once US$1 million has been spent on the property, Ivanhoe will have an option to acquire half of Pacific Minerals’ 70% interest by completing a feasibility study. Ivanhoe can increase its interest to 50% by financing the property to production.