Argentina’s Veladero highlights foreign exploration plays in ’99

Vancouver — The past year saw the advancement of numerous foreign exploration plays — none more promising than Argentina Gold’s Veladero property in Argentina.

Homestake Mining (HM-N) acquired a 60% interest in Veladero last April through its US$190-million takeover of Argentina Gold. In addition, Homestake acquired a 5,600-sq.-km land package encompassing a good portion of the Argentine side of the gold belt known as El Indio.

Veladero hosts a resource of 5.8 million oz. gold and 72.2 million oz. silver in the Amable and Filo Federico targets. The two targets are host to an indicated and inferred resource totalling 73.2 million tonnes averaging 2.47 grams gold and 30.7 grams silver per tonne, based on a cutoff grade of 0.75 gram gold. About half the gold is found in higher-grade core zones averaging about 5 grams. Both deposits remain open.

“Veladero has the potential to be a low-cost producer,” Homestake President Jack Thompson says. “It represents probably the largest potential increase to our reserves.”

Gold mineralization at Veladero is hosted in a suite of Tertiary-age volcanic rocks — the same rocks that host Pascua, El Indio and Tambo.

Just a few kilometres northwest of Veladero, straddling the Chilean-Argentine border, lies the Pascua property, which Barrick Gold (ABX-T) is determined to transform into the largest gold-silver mine in South America.

Pascua is part of a 1,300-sq.-km land package Barrick acquired when it took over Lac Minerals in 1994. The property occupies part of the El Indio belt in the central Chilean Andes.

At the end of 1998, Barrick had expanded reserves and resources at Pascua to 20 million oz. gold and 525 million oz. silver. Proven and probable reserves were estimated at 220 million tonnes grading 1.99 grams gold and 75.4 grams silver per ton, equivalent to 14 million contained ounces. Exploration had also outlined an additional gold resource of 181.6 million tonnes averaging 1.13 grams gold, equivalent to 6 million contained ounces.

Most of Pascua’s reserves are in the main deposit in Chile, and, according to Alexander Davidson, senior vice-president of exploration, these “do not even begin to reflect the potential that is unfolding on the Argentine side of the border.”

Closer to home, the market is encouraged by results from the Pogo deposit in east-central Alaska. The high-grade gold deposit, which is “blind” and has no surface expression, lies 90 miles east-southeast of Fairbanks and 40 miles north of Delta Junction in the Goodpaster district.

Teck (tek-t) can earn a 40% interest in the project from Sumitomo Metal Mining by spending US$28 million and completing a feasibility study. Teck is responsible for the initial US$33 million of Sumitomo’s share of development costs.

The project hosts a resource conservatively estimated at 10 million tons grading 0.52 oz. gold. Surface drilling this past summer was expanded after encouraging values were intercepted along the southeastern perimeter of the Liesse deposit. The initial phase of drilling (25,000 ft.) consisted of definition work with some stepouts to the southeast.

Vancouver-based Manhattan Minerals (man-t) holds 86,000 ha in Peru — a land package that comprises three projects. In May, the company finally received approval from the Peruvian government to earn a 75% interest in the most promising of these: Tambo Grande, situated 50 km from the border with Ecuador.

Manhattan recently launched a 50,000-metre drill program to expand the existing gold deposit at TG-1. In the previous phase, which consisted of 102 core holes (28,000 metres), Manhattan uncovered a near-surface, flat-lying oxide gold resource of 1.3 million oz., plus a silver resource of 12.4 million oz. At the same time, the underlying TG-1 massive sulphide deposit was expanded and a potentially larger, albeit lower-grade, sulphide body was discovered at the TG-3 anomaly.

The TG-1 sulphide resource is in a 125-million-tonne body dominated by pyrite. Based on a cutoff grade of 1% copper-equivalent, the expanded inferred resource is estimated to be 64.2 million tonnes averaging 1.7% copper and 1.4% zinc, plus 0.7 gram gold and 31 grams silver.

About 500 metres south of TG-1 is the TG-3 target, a massive sulphide zone that contains an estimated 110 million tonnes grading 0.7% copper and 1% zinc, as well as 19 grams silver and 0.7 gram gold. The estimate, provided by MRDI Canada, is based on all the drill results up to September 1999. TG-3 is a thick sequence of massive sulphides divided into two deposits: the zinc-rich North deposit and the copper-rich South deposit.

The combined resource of the two deposits exceeds 170 million tonnes of copper-zinc-gold-silver mineralization, plus more than 1.3 million oz. gold and 12 million oz. silver.

Manhattan can earn a 75% interest in Tambo Grande by completing a feasibility study and a financing plan within three years. The company is also required to meet two qualifying conditions before exercising the option: it must be the operator of a 10,000-tonne-per-day mine and have net assets of more than US$100 million. These terms will be waived if another company meeting these conditions owns at least 25% of Manhattan.

In Sonora state, Mexico, Corner Bay Minerals (bay-t) has been busy advancing the Alamo Dorado silver-gold deposit.

Eighteen months ago, while scouting around Mexico’s Sonora state, Corner Bay noticed what appeared to be a mineralized ridge on an unexplored property near the town of Alamos. The junior optioned the grassroots prospect, staked the surrounding ground and quickly outlined a silver-gold resource.

Corner Bay now views the Alamo Dorado project as a potential heap-leach silver mine with low operating costs and a quick payback period. A prefeasibility study has been completed, along with some preliminary metallurgical tests. Infill drilling will be carried out in an attempt to upgrade reserves and resources contained in the shear-hosted deposit.

The resource at Alamo Dorado, in all categories, is estimated at 74.8 million tonnes grading 41 grams silver and 0.16 gram gold. The estimated minable reserve weighs in at 49.7 million tonnes grading 0.2 gram gold and 52 grams silver.

A prefeasibility study predicts a mining cost of US90 per tonne and a cash production cost of US$1.71 per oz. silver. The open pit would feed a heap-leach recovery operation, with two streams of material sent to the leach pads: a higher-grade stream grading 65-95 grams silver, and a lower-grade stockpile grading 11-12 grams.

Several European projects caught the market’s attention last year, including EuroZinc‘s (ezm-v) Aljustrel polymetallic project in Portugal.

EuroZinc has been working diligently to revive the project. The Feitais and Moinho deposits host a total resource (in all categories) of 141.3 million tonnes of 2.79% zinc, 0.97% lead and 0.51% copper, plus 35 grams silver and 0.6 gram gold, at a zero cutoff grade. Both remain open downdip and down-plunge.

Down the road, EuroZinc intends to expand the life of Aljustrel by drilling and defining its remaining deposits. Once a feasibility study is in hand and project financing has been arranged, EuroZinc will have acquired a 75% interest in Aljustrel from a company owned by the Portuguese state.

Gabriel Resources (gbu-v) holds ground covering all the known mineral deposits in Romania’s Golden Quadrilateral. The Vancouver-based junior holds six project areas in the mountains of Transylvania, north of the regional capital of Deva.

The land package covers several large-scale epithermal and mesothermal mineralized systems, several porphyry-related gold-silver and gold-copper deposits, as well as associated lead and zinc mineralization.

Gabriel’s most advanced project is Rosia Montana, 85 km north of Deva. Based on a prefeasibility study, the project is capable of producing 411,000 oz. gold annually over a 9-year mine life at cash operating costs of US$113 per oz.

Minable reserves are been pegged at 85.4 million tonnes grading 1.7 grams gold and 10.9 grams silver. Mining would be carried out by conventional open-pit methods year-round.

Gabriel has increased its interest to 80% from 65%, with the remainder held by a state-owned company, and intends to continue definition and exploratory drilling. A full feasibility study will follow.

Looking farther east, Eldorado Gold (ELD-T) has been busy advancing its Efemcukuru and Kisladag projects in Turkey.

The wholly owned Efemcukuru deposit contains a measured, indicated and inferred resource of 2.5 million tonnes averaging 13.71 grams gold, equivalent to 1.1 million contained ounces. Proven and probable reserves stand at 1.8 million tonnes grading 13.14 grams gold, or 748,000 contained ounces. The company has now turned its full attention to permitting, financing and engineering.

Nearby, at Kisladag, Eldorado has obtained approval to begin environmental baseline studies. A gold porphyry deposit, Kisladag hosts a measured and indicated resource of 42.8 million tonnes averaging 1.49 grams gold, based on a cutoff grade of 0.8 gram gold. The inferred portion is pegged at 31.1 million tonnes averaging 1.35 grams gold. Additional drilling will attempt to define and expand the resource further.

Close to Placer Dome’s 50%-held Porgera mine in Papua New Guinea is the Mt. Kare gold-silver project, in which Madison Enterprises (MNP-T) recently increased its interest to 90%. The remaining stake is held by local landowners.

Mt. Kare hosts 20.4 million tonnes grading 5.6 grams gold and 28.7 grams silver. A resource update, together with results from ongoing metallurgical tests, is expected in the coming months.

In less than a year, San Martin in southern Honduras has graduated from the exploration stage to approved-mine status with a 1.5-million-oz. gold resource.

Glamis Gold (GLG-T) is developing the wholly owned operation, which will combine open-pit mining and heap-leaching to produce an estimated 80,000 oz. annually at a total cash operating cost of US$149 per oz. The anticipated mine life is 10 years. The project’s cornerstone is the Rosa and Palo Alto hot-springs epithermal deposits, which have a combined proven and probable reserve of 39.3 million tonnes grading 0.86 gram gold, equivalent to 1.1 million contained ounces.

The company is meanwhile carrying out a 35-hole drill program at the Cerro Blanco project in Guatemala, the objective being to prove up a resource exceeding 1 million oz. Cerro Blanco, a high-level epithermal deposit hosted in tuffs and volcaniclastics, is in the southeast, near the border with El Salvador. Glamis hopes to table a scoping study some time in January.

Meanwhile, partners Pangea Goldfields (PGD-T) and Northern Mining Exploration (MDN-t) are sizing up what could become Tanzania’s newest gold development. The Tulawaka project covers 355 sq. km and includes the western extension of the Rwamagaza greenstone belt, host to numerous gold deposits, including Barrick’s Bulyanhulu. Tulawaka is one of several properties held by Pangea in the emerging mining district, where an estimated US$400 million is scheduled to be invested in the next several years on five new gold mines.

Last summer, Pangea performed a 4,822-metre program of reverse-circulation drilling, extending the known gold mineralization at Tulawaka. Numerous high-grade gold assays were intersected, including 39 metres grading 12.7 grams in hole 91 and 22 metres grading 14.6 grams in hole 100. The partners plan to begin a feasibility study in the coming months.