Pacific Rim options Cerro Gaspar (August 19, 2002)

Vancouver — Pacific Rim Mining (PMU-V) has inked a deal to earn a 60% interest in the Cerro Gaspar project in northeastern El Salvador from Brett Resources (brn-v).

The company can do so by spending US$1.5 million on exploration over five years.

Cerro Gaspar, which is 100 km east of Pacific Rim’s El Dorado gold project, is a high-level adularia-sericite epithermal system with a strike length of 5 km. At the southern end of the system, a banded quartz vein is exposed by old workings.

The vein, which hosts high-grade gold mineralization, can be traced for 200 metres along strike and varies between 1 and 2.5 metres in width. A 2.3-metre chip sample across the vein averaged 24.7 grams gold per tonne. Assays from previous drilling performed by Brett Resources returned bonanza grades, including:

– 0.95 metre averaging 26.5 grams gold 147 grams silver;

– 2 metres grading 18.5 grams gold and 142 grams silver; and

– 0.65 metre averaging 15.6 grams gold and 67 grams silver.

Moving north 4.5 km, along strike of the same structure, is a large alteration system crosscut by numerous small veinlets and stockworks that typically host low-grade gold mineralization. Select chip sampling returned values of up to 3.3 grams gold and 7.1 grams gold. Pacific Rim believes that this broad alteration system represents the top of the epithermal system and that the bonanza vein to the south is the exposed productive level of the system.

“We like the fact that the top of the system is exposed at Gaspar and that we have an idea of the depth of the bonanza zone, where we know there are good grades locally,” says Pacific Rim’s chief executive officer, Thomas Shrake. “Knowing the elevation of the high-grade mineralization, or productive level, will allow us to use our drilling dollars economically; we can focus on exploring along the strike extent of the target rather than having first to conduct exploratory holes to identify the productive level. Our plan is to conduct surface sampling and geologic mapping to identify drill targets. This work will commence in the coming months as the rains diminish and the vegetation recedes, permitting more efficient access to the surface exposures.”

The newly amalgamated Pacific Rim posted a loss of US$1.6 million (or 3 per share) over the four months ended April 30, 2002. The loss includes $1 million in costs related to the amalgamation of Pacific Rim and Dayton; US$200,000 in exploration expenditures at the El Dorado project; and a US$400,000 operating shortfall at the Denton-Rawhide mine in Nevada.

At the end of April, Pacific Rim had a working capital of US$8.6 million. The company’s cash flow was $1 million for the period ended April 30.

More recently, the company made US$1.8 million on the sale of shares of Silver Standard Resources (SSO-V); these were tendered as payment for the Diablillos mineral property, resulting in a gain of $1 million. An additional US$900,000 (market value) in Silver Standard shares were received to complete the Diablillos transaction.

Pacific Rim anticipates US$1.3 million in positive cash flow from the Denton-Rawhide mine over the coming year, as well as additional proceeds from liquidation of the company’s interest in the Andacollo mine.