Homestake explores for gold in Sardinia

Homestake Mining (HM-N) will join Australian-listed Gold Mines of Sardinia (GMS) in an exploration effort on that island, situated west of the South Italian Peninsula.

The California-based company will exchange its 10% stake in Ireland-based Navan Resources for as much as 7% of the Australian junior and a 3-year option for a 75% interest in any deposit on the island. Homestake is also expected to fund joint-venture costs through feasibility.

Homestake acquired its stake in Navan several years ago, while evaluating the Chelopech gold deposit in Bulgaria.

GMS controls exclusive exploration rights to Sardinia and operates Italy’s only gold mine, at Furtei in the southern end of the island. In the last quarter of 1999, the mine produced 5,652 oz. GMS has not released a grade and tonnage estimate, though reserves are said to be 1.4 million oz. gold and 3.5 million oz. silver. GMS says it expects to boost production to 100,000 oz. annually by 2003 by heap leaching the sulphide mineralization. At the northern end of the island is another target, known as Osilo.