Goldcorp buys into American Bonanza

Vancouver — High-grade miner Goldcorp (G-T) has taken a 10.4% stake in the junior explorer that holds the Copperstone project in southwestern Arizona.

That company, American Bonanza Gold Mining (BZA-V), has resumed underground drifting to extend the existing decline. The first target area is 150 metres south in the D zone, where a surface drill hole cut 3.1 metres grading 182 grams gold per tonne. The decline will then be used for underground drilling and sampling aimed at converting the current resource into reserves. The geological resource for the C and D zones is 2.1 million tonnes grading 18.04 grams gold per tonne.

From 1982 to 1987, Cypress Minerals pulled 500,000 oz. gold from material in the Copperstone open pit grading 3.11 grams gold. Then, in the late 1980s, Royal Oak Mines (now defunct) began investigating the underground potential of the property, and in the mid 1990s Asia Minerals discovered a northwestern extension of the mineralization. A new mine plan was drawn up, envisioning a 185,000-tonne-per-year operation with a mine life of five years.

By the late 1990s, Asia Minerals, which subsequently took over American Bonanza Gold, acquired the property outright. Following up on the underground potential, the junior cut bonanza gold grades in the D zone with three drill holes.

The mineralization occurs mainly in native form with some quartz and iron oxide encapsulation. There are no deleterious metals or carbon minerals, and copper oxides were typically found associated with the gold.

Goldcorp garnished its interest in American Bonanza Gold by being the largest buyer of a newly completed $4-million financing by the junior. The private placement comprised 18.3 million units priced at 22 each. A unit consists of one share and half a warrant. Each full warrant allows the holder to buy another share at 28 for a year.