The 19-hole program, which is designed to assess grade variability and drill spacing patterns, is part of an ongoing feasibility study.
The holes were spaced at intervals measuring 12.5 by 12.5 metres and 12.5 by 15 metres. They were drilled along strike and downdip of the mineralized structures at La Victoria and La Cruz.
Prefeasibility work arrived at a diluted minable open-pit reserve of 11.4 million tonnes averaging 3.14 grams gold per tonne, or 1.1 million contained ounces. The waste-to-ore stripping ratio has been calculated at 6.74-to-1. The reserve was based on data culled from 268 holes drilled between 1994 and 1997.
The Victoria and La Cruz deposits account for 780,000 oz., or 71%, of the recoverable gold.
Indicated and inferred resources from all six deposits — La Victoria, La Cruz, El Tapon, La Sofia, La Loca and El Extranjero — total 24.1 million tonnes grading 3.28 grams gold. The estimate is equivalent to a contained resource of 2.5 million oz. All the deposits remain open at depth and along strike in at least one direction.
The prefeasibility study recommended a 3,000-tonne-per-day operation over the first six years of the mine’s 11-year life. Ore will be processed in a conventional carbon-in-leach circuit with gold recoveries averaging 92%. El Callao estimates the operation will produce 97,000 oz. gold per year at an average operating cost of US$167 per oz. The total cost, including capital, is pegged at US$235 per oz.
The project carries a pretax internal rate-of-return of 26.1% at US$325 per oz. gold, and 19.9% at US$300 per oz.
In recent drilling, 11 holes (1,100 metres) tested the Victoria zone, and 8 holes (800 metres) tested Cruz zone. Highlights are shown in the accompanying table.
The high-grade intersection in hole 265 appears to be localized, since adjacent holes did not hit similar mineralization. Drill results at La Cruz are consistent with previous results.
El Callao’s affairs are managed by
Bema recently completed a $5-million convertible loan facility with Resource Capital fund. An initial amount of $2.5 million has already been drawn down. The rest of the loan can be drawn at any time up to Jan. 4, 2000.
| Zone | Hole | Interval | True Width | Gold |
| (metres) | (metres) | (g/t) | ||
| Victoria | 263 | 25.2-35.6 | 10.4 | 6.51 |
| 42.1-45.9 | 3.8 | 1.49 | ||
| 54.4-61.2 | 6.8 | 5.16 | ||
| 264 | 35.8-51.0 | 15.20 | 3.59 | |
| 63-72.5 | 9.5 | 3.04 | ||
| 265 | 45.1-50.5 | 5.4 | 127.77 | |
| cut to 34 g/t | 45.1-50.5 | 5.4 | 22.57 | |
| 59.5-65.8 | 6.3 | 1.7 | ||
| 70.4-79.9 | 9.5 | 3 | ||
| 266 | 68.9-74.4 | 5.5 | 2.94 | |
| 82-97.3 | 15.30 | 3.7 | ||
| 267 | 71.6-78.5 | 6.7 | 6.32 | |
| 82.2-89.1 | 6.7 | 7.74 | ||
| 268 | 77-94.3 | 16.8 | 6 | |
| 269 | 44.8-68.5 | 19.9 | 5.1 | |
| 73.6-80.5 | 5.8 | 10.19 | ||
| 87.5-91.8 | 3.6 | 1.54 | ||
| 270 | 50.2-53.3 | 2.6 | 1.75 | |
| 58.2-65.3 | 6 | 3.52 | ||
| 71.6-90.3 | 15.7 | 4.61 | ||
| 271 | 69.9-80.4 | 8.8 | 4.07 | |
| 272 | 55.1-60.6 | 4.6 | 8.1 | |
| 67.1-72.1 | 4.2 | 5.78 | ||
| 281 | 122-125.8 | 3 | 10.93 | |
| 139.6-151.1 | 8.9 | 10.69 | ||
| 155.6-156.9 | 1.3 | 5.94 | ||
| La Cruz | 273 | 53.6-63.6 | 8.2 | 8.41 |
| 82.1-86.3 | 3.4 | 2.24 | ||
| 274 | 56.3-68.8 | 10.5 | 5.37 | |
| 81.9-86.1 | 3.5 | 1.3 | ||
| 275 | 48-59.7 | 11.5 | 4.61 | |
| 276 | 54.9-72.5 | 14.3 | 3.18 | |
| 277 | 62-79 | 12.1 | 6.29 | |
| 278 | 73-89.5 | 9.9 | 7.56 | |
| 103-105 | 1.4 | 3.34 | ||
| 279 | 55-66.6 | 9.6 | 8.28 | |
| 280 | 49-54.5 | 4.4 | 7 | |
| 61.5-70.5 | 7.2 | 2.89 | ||
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