THE GLOBAL SEARCH FOR GOLD SPECIAL — Yamana explores targets in Indonesia and Argentina

Exploration programs are in full swing at properties held by Yamana Resources (YRI-T) in Indonesia, Argentina and Paraguay. Having raised $21 million in a recent road show, the junior is well-positioned to carry out its ambitious exploration plans.

“This will be the year of the drill,” said Richard Walters, Yamana’s chief operating officer, at the annual meeting, held recently in Toronto.

Yamana management told shareholders that while the projects in Argentina are more advanced, with the Santa Cruz project “probably our crown jewel,” eight targets have nonetheless already been identified on the company’s land package in Indonesia.

“We are one of the largest landholders in Kalimantan, with more than 2.7 million hectares,” noted Yamana President Victor Bradley. He added that the company was assisted in its land acquisition efforts by Barrick Gold (ABR-T), which earlier this year lent the junior US$14.6 million, including US$7.2 million used by Barrick to buy just over 3 million Yamana shares.

Yamana was then able to post a US$13.7-million “seriousness guarantee” for its 12 contract of work (CoW) applications. This amount has since been returned to the junior, in compliance with Indonesian government regulations.

Meanwhile, Yamana has repaid the balance of US$7.5 million to Barrick.

Yamana intends to use the proceeds of the Barrick share purchase to explore the 12 Kalimantan CoWs. The major will retain the right to elect to bring to production three gold resources identified by Yamana on any of the CoWs, thereby earning a 75% interest.

Initial work is focused on ground surrounding Bre-X’s Busang gold deposit, where Yamana has secured reconnaissance permits for seven CoWs, covering 1.5 million ha around Bre-X’s holdings.

The company began geological reconnaissance and sampling in mid-July of this year. The first of three field crews is based 50 km west of Busang, where members are conducting confirmation sampling of gold anomalies reported by previous concession-holders.

Support bases have been established in Samarinda and the up-river village of Tabang. An airborne geophysical survey contract covering the six CoWs closest to Busang is planned, with work scheduled to start shortly. Intrusives, believed to be similar to those hosting known gold deposits, such as Kelian and Mt. Muro, have been identified on three of its CoWs.

While Indonesia is relatively new to Yamana, exploration efforts are well-advanced in Argentina. The most advanced project, Santa Cruz Vanguardia, is in the southern part of the Patagonian plateau, near Minera Mincorp’s Cerro Vanguardia deposit, which is believed to host 3.4 million oz. gold (plus 35 million oz. silver).

“We were one of the first to recognize that this area is similar to Nevada, with typical `basin and range’ geology,” Winters said.

By getting in the door early, Yamana was able to acquire exclusive prospecting rights on 14 properties comprising about 85,000 ha in the epithermal gold district.

The recently completed 1995-96 field season included more than 8,000 surface samples and 3.3 km of backhoe trenching on several properties.

Yamana said the most promising gold showings are on the Martinetas property, where a drill program will be mobilized when spring weather conditions stabilize, probably in early October. The company has its own drill and assay laboratory, which allow for a quick turnaround on assay results.

The recent sampling program defined an arcuate gold belt, about 0.5 km wide and 4 km long, with at least five areas identified as drill targets.

Drilling will start on grid 2, a low hill where sampling had defined an area of at least 2.5 ha averaging 2.07 grams gold per tonne. Assays for 119 samples range from 0.1 gram to a high of 18 grams. The average of 43 samples taken from the central area of the grid is 0.33 gram gold, with a high of 1.18 grams. Backhoe trenching (finished prior to grid sampling) returned values of 0.28 gram gold over 115 metres, including a 17-metre section at 1.05 grams. Encouraging values were reported from several other targets.

Yamana’s next phase of drilling will entail 25,000 metres, starting at Martinetas in October, followed by testing of other targets.

Previous drilling was focused on the Microonda prospect, which contains at least eight separate gold targets. Results from this work include 12 metres of 4.74 grams gold and 14 metres of 3.31 grams, as well as numerous thick intercepts of lower-grade mineralization (for example, 52 metres of 0.82 gram).

Yamana also holds a large land package in a new, volcanogenic massive sulphide district in Argentina’s Tierro del Fiego province.

“The area is comparable to the Wolverine discovery [of Westmin Resources (WMI-T)] in the Yukon,” Winters said, adding that numerous anomalies have been identified and will be drill-tested this year.

The work will be carried out by Westmin, Yamana’s new joint-venture partner, which can earn a half interest by spending US$6.3 million. The first-year program will cost US$1.8 million and entail at least 3,000 metres of drilling.

Yamana has various other projects under way in South America, including the Neuquen property in Argentina, where “red-bed” copper oxide deposits are being sought, and a land package in Chile’s El Indio gold district.

In Paraguay, Yamana is exploring for gold deposits, as well as polymetallic base metal deposits.