LATIN AMERICA — Lyon Lake drills to boost Beta Vargas — 5,000-metre program under way at Costa Rican project

A drill program is attempting to increase the known resource of 2.9 million tonnes grading 1.33 grams gold per tonne at the Beta Vargas concession in Costa Rica.

Lyon Lake Mines (LLL-M) has drilled the first 1,357 metres of a 5,000-metre program, and results to date indicate the presence of large, gold-bearing structures up to 60 metres wide associated with grades of 1.1 grams gold.

Hole 11 returned 60 metres of 1.15 grams gold from surface, which includes 18 metres of 3.32 grams, while hole 12 returned 24 metres of 0.76 gram from 10 to 24 metres.

Nine of the 10 recent holes intersected mineralization at or near surface.

Results include 22 metres of 0.7 gram, 18 metres of 1.06 grams, 14 metres of 0.73 gram, 10 metres of 1.24 grams and 26 metres of 1.26 grams.

Beta Vargas is situated about 150 km northwest of San Jose, Costa Rica. A state-owned agency holds a 10% net profits interest in the project.

Results are expected shortly from the Canamazo concession, where about 45 holes have been drilled. In addition, sampling was carried out on trenches and tunnels discovered on the Guaitilar and Castillo sectors of the Canamazo concession.

In 1995, a feasibility study on the existing resource at Beta Vargas estimated that an open-pit, heap-leach operation could be built for US$2.4 million. Based on a gold price of US$380 per oz., the mine is projected to provide a return on investment of 35% with a payback period of 1.6 years.

Annual production is pegged at 10,000 oz. annually over the first year of operation. If ongoing exploration continues to return positive results, the company hopes to boost this rate to 50,000 oz. annually within four years.

Last year, after a lengthy permitting process, Lyon Lake received a production permit from the Costa Rican government to start construction. This work is in progress.