Yamana Res. strikes gold at Argentine play

Drilling at the Martinetas property in southeastern Argentina has yielded significant epithermal gold mineralization for Yamana Resources (YRI-T).

Two of six targets were tested, and assays for the first 13 reverse-circulation drill holes, which total 2,226 metres, have been received. The property is situated near the town of Santa Cruz.

Each hole is mineralized, and eight holes on Target 1 revealed a subcropping, mineralized volcanic tuff bed.

Results include: 132 metres grading 1.02 grams gold per tonne (including 14 metres of 4.87 grams) in hole 13; 32 metres grading 1.07 grams (including 12 metres of 2.02 grams) in hole 2; 18 metres of 1.04 grams (including 8 metres of 1.76 grams) in hole 1; 18 metres of 0.93 gram (including 12 metres of 1.07 grams) in hole 3; and 18 metres of 1.09 grams (including 10 metres of 1.6 grams) in hole 6.

Yamana believes the surface gold resource is open in three directions, as well as to depth, in holes 2 and 13. Drilling at Target 2 encountered gold traces sufficient to warrant additional work there.

In a separate development, the company has entered into an agreement with Australian-listed Union Mining to explore several permits in Papua New Guinea.

Yamana can earn a 51% interest in Union’s 2,305-sq.-km land package, which includes eight exploration licences and two applications, by spending A$9 million on exploration over the next four years. At the end of four years, Union will have 90 days to option a 49% interest. If it fails to do so, Yamana can increase its stake to 70% by completing a feasibility study within two years, and to 75% by making a production decision and obtaining development approvals within a further two years.

The agreement, which has yet to be approved by regulators, calls for a minimum of A$2 million to be spent in the first year. It also allows Yamana to acquire up to a 17.1% equity interest in Union by purchasing 10 million treasury shares, 5 million shares and 17 million options to acquire an equivalent number of treasury shares (exercisable to May 31, 2000), representing a total investment of A$2.05 million.

In March, Yamana will begin drilling the Gameta target, on the eastern side of Fergusson Island in Milne Bay province. The zone was previously calculated to host an inferred resource of 2.1 million tonnes grading 2.6 grams gold per tonne. However, Yamana considers that figure to be unrepresentative of the prospect’s true potential, as only 10% of the outcropping mineralization was drilled.

Richard Walters, Yamana’s chief operating officer, says the company will expand its drill program at Gameta dramatically in the belief that the zone has potential for hosting 1 million oz.

Yamana will also explore the 2-km-by-300-metre Igwageta zone, situated 40 km southwest of Gameta, where Union recently completed an 11-hole program of reverse-circulation drilling over 150 metres of strike.

Results from the first six holes include: 26 metres grading 1.07 grams gold; 10 metres grading 8.14 grams; 8 metres grading 1.12 grams; and 11 metres grading 0.51 gram.