MEXICO AND CENTRAL AMERICA — Greenstone aims to expand production in Central America

Central America’s largest gold producer, Greenstone Resources (GRE-T), expects output from its properties in the region will increase to 402,000 oz.

before the end of the century.

With one operating mine and three advanced projects nearing production, output is expected to rise steadily over the next three years. Production for 1997 is expected to increase four-fold, to 157,000 oz., and production will nearly double in the following year, to 287,000 oz., before topping 402,000 oz. in 1999. The company expects to have 10 million oz. of reserves by the end of next year.

On the Libertad concession in central Nicaragua, construction is nearly complete on the Cerro Mojon gold mine. The heap-leach pad and ancillary earthworks are more than half-complete, concrete for the crushing plant has been poured and the building’s steel frame is being raised. The processing plant is also nearing completion.

Cerro Mojon is expected to yield 88,000 oz. annually at a cash operating cost of US$142 per oz. The first gold pour is anticipated for the end of the year, and capital costs are projected at US$18 million.

In due course, Greenstone plans to shut down the Libertad mill and relocate its workers to the Cerro Mojon project.

The final feasibility study on the Cerro Mojon deposit outlined a geologic reserve of 936,000 oz. and a minable reserve of 526,000 oz. The deposit contains 9.3 million tonnes grading 2.12 grams gold per tonne.

Drilling around Cerro Mojon continued after the study was completed. Hugh Snyder, chairman of Greenstone, says the additional drilling will more than double the reserves outlined in the feasibility study.

Exploration at Cerro Mojon is ongoing, Snyder adds. Two drill rigs are at work on the property, and a third is scheduled to begin once the rainy season ends. One rig is conducting the third phase of drilling on the deposit by testing the potential for deeper mineralization. Another rig, 2 km from the minesite, is testing the northeastern extension.

In late September, Greenstone bought the remaining 25% interest in Libertad from IMISA, a private corporation owned by the United Mine Workers’ Union of Nicaragua.

On the Hemco concessions in northeastern Nicaragua, Greenstone is rehabilitating the mill at the Bonanza operation, one of the company’s advanced projects. The mill is currently running at 150 tonnes per day (well below its daily capacity of 2,000 tonnes) and producing 10,000 oz. per year.

The Bonanza mill is run-down and, by the end of 1997, the company plans to have raised its capacity to 500 tonnes per day (to produce about 30,000 oz.

annually), Snyder says. Feed for the mill will come from the 30 veins on the property. Greenstone has one drill rig on site and hopes to increase that number to four.

The company recently acquired the remaining 20% interest in Hemco, a private company, thereby securing full ownership of the Bonanza, Rosita and Siuna concessions.

Meanwhile, Greenstone has announced new drill results from the Alta de la Mina (ADLM) pit at its Santa Rosa gold mine in Panama. The new mineralization has a higher grade than what is currently being mined there.

The new holes, all of which were drilled on an angle, were concentrated at the centre of the ADLM pit. Results included: 82.3 metres grading 2.76 grams in hole 284; 40 metres of 2.5 grams and 52 metres of 8.36 grams in 285; and 30 metres of 2.2 grams and 46 metres of 10.88 grams in 286.

Snyder believes the drilling could boost reserves in the pit by 50-100%.

Additional exploration targets are found along the northwestern and southeastern edges of the ADLM pit, as well as around the main Santa Rosa pit.

By December, after the rainy season, Greenstone will begin constructing the San Andres gold mine in western Honduras. That deposit contains 18.3 million tonnes grading 1.44 grams, equivalent to 722,000 oz. of recoverable gold.

Annual production is estimated at 83,000 oz. with an average cash operating cost of US$109 per oz. Capital costs for the project are pegged at US$23 million.

Snyder says he believes there is the potential for additional ounces at San Andres, pointing out that a drill rig has been operating there for the past three months to uncover further mineralization. Other nearby targets are also being tested, and additional confirmation drilling is under way.