The Santa Pancha epithermal system, situated 5.5 km east of El Limon’s mill, was exploited first by Noranda and then by the Nicaraguan government, between 1941 and 1988. During that time, it produced 1.2 million oz. gold from ore grading 12-14 grams gold per tonne (T.N.M., March 5-11/04).
The operators left behind an inferred resource of 539,400 tonnes grading 7.1 grams gold, or 123,200 contained ounces, lying immediately beside previously mined-out areas accessible by the currently unused shaft 4.
Some of the best new results were:
— 5.6 metres averaging 5.2 grams gold per tonne, starting at 100.3 metres in hole 3092;
— 7.8 metres (from 184 metres) of 6.2 gram gold in hole 3103, including 2.9 metres running 14.6 grams gold; and
— 7 metres (from 194 metres) of 13.8 grams gold in hole 3107, including 1 metre averaging 78.4 grams gold.
About 40,000 metres will be drilled around El Limon this year, with the twin goals of converting current resources into the reserve category and finding major new vein systems.
However, a planned 12-hole, exploration drilling program at one of the most prospective of the new systems, Santa Rosa, has been delayed, owing to ground conditions and other problems.
The drilling is part of a 55,000-metre, US$5-million program that will target Glencairn’s three main gold projects: El Limon; the Bellavista heap-leach gold mine in Costa Rica; and the Vogel gold project in Timmins, Ont.
At the Bellavista mine in Costa Rica, Glencairn will poke 3,000 metres of holes into several targets on the 90-sq.-km property.
One such target is the strike extension of the nearby Montezuma mine, which produced about 100,000 oz. gold during the period 1897-1916, from a vein averaging about 10-12 grams gold per tonne.
Glencairn began construction of the Bellavista mine several months ago and expects to have the work completed by the end of the year. Contractors are currently installing liners for a heap-leach pad and ponds, and they expect to be finished that phase in May.
To help with the construction, Wheaton recently closed a $29.3-million financing with a syndicate of underwriters led by Orion Securities, and including BMO Nesbitt Burns and Desjardins Securities. The financing consisted of 34.5 million units priced at 85 apiece, with each unit consisting of one share and half a warrant, with each whole warrant entitling the holder to buy a share for $1.25 until November 2008.
The financing means Glencairn has enough money to finish construction at Bellavista, including the purchase of a fleet of mine equipment. However, the company says it is now considering contracting-out the mining operations, which would reduce the project’s capital cost but increase operating costs.
Bellavista will produce 60,000 oz. gold annually, bringing Glencairn’s total projected gold output in 2005 to 110,000 oz.
Cash operating costs at Bellavista are projected at US$163 per oz. over the 7.3-year life of the mine, based on current reserves of 11,239,000 tonnes grading 1.54 grams gold. Total cash costs, including all royalties, are projected at US$177 per oz.
Glencairn has also struck an economic co-operation agreement with the local municipality of Miramar (the nearest town to Bellavista). The company will contribute to various community projects, including: construction of a pipeline from a freshwater spring on company land; installation of a water tank; purchase of a garbage truck; donation of certain land not being used by Glencairn; student scholarships; and promotion of tourism.
Glencairn will also hire 80% of its workforce at Bellavista from among residents of the county of Montes de Oro.
In the past, Glencairn successfully lobbied the Costa Rican government to allot half of its 2% net smelter return royalty on mine production to the town of Miramar.
Meanwhile, at the company’s Vogel property in Timmins, drilling is about 40% complete. Although assays from most of the holes have not yet been received, initial results are mixed.
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