Greenstone launches second program at Hemco

Impressed by results from a first phase of exploration on its Hemco gold concession in northeast Nicaragua, Greenstone Resources (GRE-t) plans to begin second phase shortly.

The exploration program, which will include 20,000 metres of drilling and ground geophysical surveying, will focus on four of 12 separate areas evaluated in 1997. Greenstone believes each of the areas — dubbed Tigre Negro, Rosita Northwest, Siuna South and Pioneer — has the potential to host a bulk-tonnage gold deposit.

In the Tigre Negro area, which lies 5 km east of the former producing Rosita mine, nine holes were drilled, one of which returned 84 metres of 2.8 grams gold per tonne. The intersection occurred in a skarn hosted by a diorite intrusion measuring 2 km in diameter.

Rosita Northwest is the strike extension of the old Rosita pit and includes the R-13 zone, which a previous owner estimated to contain 850,000 tonnes grading 1% copper and 3 grams gold. The target area is 2 km long by 1 km wide, with gold mineralization hosted by leucogranites and skarns in lime-bearing shales.

At Siuna South only one hole was drilled, intersecting 3 metres of 31.5 grams gold. One hole drilled in the Pioneer area intersected 3 metres of 35.5 grams gold and 302 grams silver. The intersection is

part of a longer 15.2-metre interval of epithermal-style mineralization. The intersection at Sivna South occurs in a garnet-pyroxene skarn hosted by lime-bearing shales.

Siuna South lies 3 km south the old Siuna mine and is on strike with the structure controlling mineralization there. The Pioneer area is situated 15 km southwest of the producing Bonanza deposit, which features a similar geological setting.

Meanwhile, rehabilitation work at Bonanza is continuing. By the second quarter, monthly production will top 3,000 oz., with production for 1998 anticipated at 26,000 oz. Cash costs are expected to average US$280 per oz.

gold for the year.

At last report, Bonanza contained proven and probable reserves of 1.16 million tonnes grading 7.48 grams gold. Gold mineralization is associated with sulphide minerals in quartz veins that range from 0.5 to 10 metres in width.

In other news, Greenstone reported a net loss of US$1.07 million (or 2cents per share) for the nine months ended Sept. 30, compared with a loss of US$682,000 (1cents per share) in the same period of 1996. Nine-month revenue was US$14.96 million this year and US$6.59 million last year.

Greenstone attributes the difference in revenue to increased production and higher realized gold prices. The company produced 44,710 oz. in the 9-month period ended Sept. 30, of which 37,108 oz. was sold at an average of US$403 per oz.

Total production for 1998 is targeted at 233,000 oz. The company has secured a minimum selling price of US$46 per oz. over future spot prices for a 105,000-oz. portion of this total. Cash costs are expected to average US$197 per oz., whereas total costs are tallied at US$238 per oz.