Argentina Gold tallies resource for Veladero project

Argentina Gold (ARP-V) has tabled preliminary resource estimates for its Veladero gold-silver project in San Juan province.

The Filo Federico zone, which was defined by 15 drill holes, contains a resource of about 40.8 million tonnes grading 0.79 gram gold and 25.68 grams silver per tonne, equivalent to a contained resource of 1.04 million oz.

gold and 33.7 million oz. silver. The inferred portion of the resource has been pegged at 42 million tonnes grading 0.71 gram gold and 26.59 grams silver, equivalent to a contained resource of 963,800 oz. gold and 36 million oz. silver.

The NW Target zone, defined by 10 drill holes, has an indicated resource of about 4.6 million tonnes averaging 1.47 grams gold and 20.95 grams silver per tonne, equivalent to a contained resource of 217,400 oz. gold and 3.1 million oz. silver. The inferred portion is estimated at 3.4 million tonnes grading 1.5 grams gold and 20.96 grams silver per tonne, equivalent to a contained resource of 164,200 oz. gold and 2.3 million oz. silver.

All estimates were calculated using a cutoff grade of 0.5 gram gold and included drill hole data to a depth of 300-350 metres.

“Surface geological mapping to date suggests that the extent of the altered and mineralized system is much greater than the area tested by drilling,” according to a report filed by independent consultants. “Surface geochemical and geophysical surveys tend to support this contention. Overall the system may be as large as five or six kilometres square. Of this area, perhaps 20% has been investigated in a preliminary fashion by drilling.” Only a limited number of metallurgical tests have been performed on the Filo Federico and NW Target zones. Early results produced average recoveries of 82% gold and 23% silver.

Stripping ratios are estimated to be 4.3-to-1 for Filo Federico and 1.3-to-1 for the NW Target.

Mineralization remains open south of Filo Federico, as well as east and at depth. The Amble target and the valley between the Filo Federico zone and the NW Target are also open.

Argentina Gold is preparing for the 1998/1999 field season, to begin by the end of September. Access roads to the property have been opened and the base camp is fully operational. The company has budgeted about $5 million for an initial 5,000-6,000-metre program of reverse-circulation drilling at the Amble target, in the area of hole 76, which returned 193 metres of 2.59 grams gold and 55.09 grams silver.

At Filo Federico, an additional 2,000 metres will be drilled in order to delineate mineralization further.

The project is expected to enter the prefeasibility stage by September 1999.

Following this period the company has 180 days to submit a feasibility study to the San Juan government and exercise the option to enter into the exploitation stage. This stage covers a period of 25 years and requires the vendors to pay the government a fixed 1% net smelter return royalty.

Argentina Gold is the operator of the Veladero project and holds a 60% interest, with Barrick Gold (ABX-T) holding the remainder.

Currently, the junior has a working capital of about $750,000 and has 33.4 million shares fully diluted.