Alamos steps up work at Mulatos

Vancouver — Determined to define additional high-grade mineralization, Alamos Minerals (AAS-V) has launched a drill program at the Estrella pit of the Mulatos deposit in northwestern Mexico.

The Estrella zone represents the higher grade core of the Mulatos deposit, which lies 220 km east of Hermosillo. The zone contains 11.5 million tonnes grading 3.16 grams gold per tonne, or 1.16 million oz. contained gold, based on a cutoff grade of 2 grams gold per tonne.

Former owners Placer Dome (PDG-T) and Kennecott, a subsidiary of Rio Tinto (RTP-N), spent in excess of $50 million exploring the property. A 1997 feasibility study pegged the measured and indicated resource at 68.3 million tonnes grading 1.57 grams gold per tonne, based on a 0.8-gram cutoff. The resource was defined by 511 drill holes and 994 samples from underground workings.

Alamos hopes to increase the grade of the known resource within the Estrella zone. To this end, the current drilling campaign will consist of 126 vertical holes varying from 18 to 40 metres in depth, which will be drilled on a 12-metre grid spacing. This subsequently will be increased to a 6-metre spacing if results warrant.

The closely spaced drilling is required to estimate the amount of contained gold that will be mined and stacked on a test leach pad. A bulk heap-leach test will follow the drill program as part of a new feasibility study. The junior is acquiring permits to mine, crush and heap-leach 50,000 tonnes of material.

Mineralization at Mulatos is hosted in a large, high-sulphidation gold system that is stratabound in felsic volcanoclastics and porphyritic flows.

The deposit lies within the 150-sq.-mile Salamandra property of National Gold (NGT-V). Alamos can earn a half-interest in the property by spending $2.4 million before late October 2002. National Gold is entitled to a payment of $2 million should the property enter production. The Albert Matter-led junior acquired the Salamandra property late last year from Placer and Kennecott in a $10.5-million deal.

Alamos has 15.6 million shares fully diluted and recently announced a non-brokered private placement of 6 million units priced at 15 per unit. Each unit consists of one share and one warrant. Each warrant entitles the owner to buy an additional Alamos share at 20 for nine months from the closing date. Proceeds from the placement will be applied to the Salamandra property.