Andina boosts Volcan gold resource (November 05, 2007)

Vancouver — Almost 15,000 metres of recent drilling has served to substantially increase the resource at Andina Minerals’ (ADM-V, ADMNF-O) Volcan project, in Chile’s Maricunga gold belt.

Measured and indicated resources are up 48% from an early 2007 estimate to 115.1 million tonnes grading 0.79 gram gold per tonne (2.93 million contained ounces) using a 0.5-gram gold cutoff. Volcan also hosts an additional 170.3 million inferred tonnes of 0.77 gram gold (4.2 million contained ounces), using the same cutoff.

Higher-grade core zones host 61.7 million measured and indicated tonnes at 0.97 gram gold (1.92 million contained ounces) using a 0.7-gram gold cutoff, along with another 83.1 million inferred tonnes of 0.96 gram gold (2.55 million contained ounces).

The company attributes the resource boost to the northward extension of its Dorado West zone, which has been traced over widths of up to 600 metres. Infill drilling on the zone provided the measured resource.

Dorado West, which hosts more than two-thirds of the current resource base, extends along strike for about 1,500 metres and remains open to the north.

“The resource increase significantly enhances the viability of the Volcan project and underpins our confidence that this is a much larger mineralization system than initially anticipated when we began our exploration in 2005,” said Andina president and CEO Carl Hansen in a statement.

Hansen also expressed optimism that the company’s upcoming $15.5-million, 50,000-metre drill program at Volcan will further expand the resource base.

Gold and copper mineralization at Volcan is associated with a hydrothermal alteration system related to a sub-volcanic porphyry intrusive and flow complex. The gold typically occurs in banded quartz veinlets within the altered volcanic flows.

Native sulphur deposits on the project area were mined historically. In the late 1980s, the Chilean government tabled a reserve estimate of about 4.7 million tonnes grading 40% sulphur.

Both Homestake, now part of Barrick Gold (ABX-T, ABX-N), and Cambior, which recently merged with Iamgold (IMG-T, IAG-N), conducted modest exploration programs on Volcan in the 1990s.

Andina shares gained about 10% on the new resource estimate, rising to around $4.60.