News Roundup — Latin America

Skeena cuts higher grades at El Corazon

Vancouver — Additional drill results from Skeena Resources’ (SKE-V, SKREF-O) El Corazon gold project in northwestern Ecuador delivered some higher grades over a previous batch of assays that had prompted a slide in the company’s share price.

A recent trio of holes on the breccia-hosted target returned up to 5 metres (from 210 metres downhole depth) grading 17.88 grams gold per tonne in SKE-040, including 1.4 metres of 61.4 grams gold. The offset hole tested about 80 metres vertically beneath, and on-section with, last year’s hole SKE-019 that cut 16.9 metres of 36.2 grams gold.

Skeena has demobilized the drill rig from the project with assays pending for the final four holes.

The company has reviewed a down-dip continuity of over 850 metres in the breccia unit and more than 200 metres of lateral extent with an average thickness of 20 to 30 metres.

Epithermal gold mineralization at the project occurs in an andesitic volcanic sequence intruded by an explosive rhyolite breccia. The silicified breccia exhibits stockwork quartz veining and is typically highly enriched in gold with lesser grades in the peripheral andesites.

El Corazon was initially acquired by Rio Tinto (RTP-N) in 1995 following a government geochemical survey. The major subsequently drilled the property, returning broad intervals of 1 to 2 grams gold over widths of up to 90 metres. Other companies drilled in the late-1990s, intersecting high-grade values of up to 49 grams gold across 23.7 metres, but the property was dropped due to market conditions.

Skeena acquired its option in mid-2003 from private Ecuadorian company AgroIndustrial, comprised of ex-Rio Tinto personnel, which now operates a small-scale underground mine on the project targeting the previously identified high-grade material. AgroIndustrial plans to increase its operating rate to about 50 tonnes per day.

Skeena’s shares rallied from about 39 up to the 55-level leading into the results but then pulled back to the 40-range on strong trading volume.

ECU Silver considers bulk mining in Mexico

After some major discoveries at its Santa Juana silver-gold mine in Mexico’s Durango state, ECU Silver Mining (ECU-V) is considering a move to bulk mining.

The company, based in Rouyn-Noranda, Que., recently commissioned a new pyrite flotation circuit at the existing mill and purchased a second grinding circuit located less then 100 metres away from the company’s on-site test lab. Daily production is projected to increase to 600 tonnes per day from below 300 by early 2007.

ECU normally mines veins measuring 0.3 to 1 metre in thickness at the Velardena property where Santa Juana is located, but during recent exploration the company uncovered mineralized sections up to 30 metres wide.

During a bulk mining trial run, a stope on level 15 of the Santa Juana mine averaged 9 metres in width and returned 5,227 tonnes grading 2.23 grams gold per tonne, 191 grams silver per tonne, 2.66% lead and 3.27% zinc.

High-grade narrow veins are usually selectively mined at Velardena. The latest grades are lower than usual because 70% to 90% of the material mined came from the intervals between the veins during the bulk testing, but the productivity was higher.

The lower grades and days lost from preparing for the bulk-mining test resulted in lower revenues during the third quarter at $784,000 compared with $821,000 in 2005.

The company’s original goal was to eventually increase production to 1,000 tonnes per day, but now management believe they could go even higher.

Drilling is being stepped up with two new underground diamond drills arriving recently and two extra surface drills contracted in October.

Recently, a 7.7-metre-wide sulphide vein yielded 18.57 grams gold per tonne and 41 grams silver per tonne.

Next in line is the prefeasibility study, which will determine whether bulk mining would be more economical for Santa Juana. A scoping study will evaluate the size of any potential production increase.

Aur set to increase Andacollo interest

Aur Resources (AUR-T, AURRF-O) has reached an agreement with the larger of the two minority shareholders in the Andacollo copper mine in Chile under which it can increase its interest in the project to 90% from its present 63%.

The deal, with Chilean partner Minera del Pacifico, sets a price of US$103 million for the 27% interest in Andacollo. Minera del Pacifico can exercise a put option at that price during the first half of January, or Aur can exercise a call option once Pacifico’s option expires or Pacifico gives notice it will not exercise the put.

Chilean state corporation Empresa Nacional de Mineria owns the other 10%.

Andacollo produces about 18,000 tonnes copper annually from a supergene deposit mined by open-pit methods and processed by solvent extraction and electrowinning. A primary copper deposit, currently under development, is slated to produce 80,000 tonnes copper and 66,000 oz. gold annually from 2009.

Volta Grande grows with drilling

Verena Minerals (VML-V) has finished the first phase of a 37,000-metre drilling program at the Volta Grande gold project in Para state, Brazil, and the two known deposits there have been extended.

The first phase of work was a 25-hole, 5,000-metre program that tested the Grota Seca West zone with some holes on the Grota Seca East zone about 300 metres to the east, mainly to outline higher-grade bodies in the two zones. A 2005 estimate, based on drilling by earlier operators, put the size of the indicated resource at 3.8 million tonnes grading 1.4 grams gold per tonne and the inferred resource on both zones at 29 million tonnes grading 1.2 grams per tonne.

The two zones lie on the northwest-striking contact between volcanic-derived mafic schists to the south and a diorite intrusion to the north, with the mineralization itself occupying a wide (10 to 80-metre) and nearly vertical mylonitized zone. Grades over those widths tend to be in the 1- to 2-gram range, with narrower zones of higher-grade material.

Among the better results in the current drill campaign were a 69-metre interval in Grota Seca West that ran 1.6 grams gold per tonne, and another on the same cross-section of the zone that ran 1.3 grams per tonne over 74.9 metres.

Last month Verena closed the acquisition of the property from the Brazilian government by paying US$1.7 million. It has a work commitment for a similar amount that must be discharged by June 2008.

Fronteer grabs stake in Latin American Minerals

Vancouver — Calling it a strategic investment, Fronteer Development Group (FRG-T, FRG-X) has taken down a private placement in Latin American Minerals (LAT-V) to hold a 17.42% interest in the junior.

Fronteer bought 4,932,000 units of Latin American at 25 apiece, representing about 37% of its 13.4-million unit financing that grossed $3.35 million for the Argentina-focused explorer. Units are comprised of one share plus a half-warrant exercisable in full at 35 for one year.

Latin American Minerals graduated from capital pool-status earlier this year by acquiring an option for 75% of the La Carolina project in San Luis province, Argentina. The property covers a portion of a gold belt characterized by diatreme structures. Historic drilling has intersected wide intervals of mineralization including a 1988 hole that cut 138 metres of 2.5 grams gold per tonne. High-grade intervals encountered include a 3-metre section of core averaging 59 grams gold.

The company also acquired option rights to the Cerro Amarillo copper-gold porphyry project earlier this year. The property, located in Argentina’s Mendoza province, contains abundant surface mineralization and geophysical anomalies that have not been tested.

Shares of the junior jumped 72% on the news of Fronteer’s investment, to close up 23 at 55 apiece. Following closure of this late
st financing, Latin American will have about 28.3 million shares outstanding to give it a market capitalization of $15.6 million.