Arizona Star sticks with Aldebaran

A positive pre-feasibility study of the Aldebaran property in Chile has prompted Arizona Star (VSE) to proceed toward completion of a final study.

Arizona Star is earning a 51% interest in the property from a Chilean company by spending US$4 million plus US$2 million cash by September, 1994. President Roger Richer says the company will have to spend an additional US$1.8 million to complete the expenditure requirement.

Arizona Star will proceed with stepout drilling to test for additional reserves at the Cerro Casale deposit and is also planning more metallurgical testing.

Based on more than 22,000 ft. of reverse circulation and diamond drilling, Cerro Casale is estimated to have a preliminary geological resource of 99 million tons grading 0.021 oz. gold per ton, using a cutoff of 0.015 oz. gold. Minable reserves are estimated at 81.1 million tons grading 0.020 oz. gold, at a strip ratio of about 1-to-1.

The pre-feasibility study is based on a US$375-per-oz. gold price and an open-pit, heap-leach operation producing 16,500 tons per day, with a capital cost of US$64.5 million.

Based on recoveries of about 85%, the mine would produce 101,400 oz. of gold per year at an estimated cash cost of about US$273 per oz.

Column testing indicates that the majority of the oxide ore is amenable to cyanide heap leach recovery with yields ranging between 80 and 85% for minus 0.25 inch material and 70 to 75% for minus one inch material. The metallurgical work will test recoveries for coarser crush material as well as run-of-mine material in order to optimize economics. Richer notes that the use of a coarser crushing would reduce capital costs, with the capital requirements of a run-of-mine operation totaling about US$49.7 million.

The company is also planning to conduct a property-wide exploration program during the coming season to further test the 40 square mile Aldebaran project. Arizona Star has about $200,000 in working capital and about 14 million shares outstanding.

Richer said the company is now in the process of arranging in the order of US$1.6 million for the planned work through an equity issue.