Balaclava tests Ecuadorian gold project

An initial phase of drilling on the El Corazon gold project in northern Ecuador has yielded mixed results for Balaclava Mines (BIL-V).

In total, 1,126 metres in 14 diamond drill holes were completed. The program, which was confined to the Rio Verde Chico and Tres’X zones, was designed to test at depth several high-grade structures defined by surface trenching and to provide a better understanding of the mineralizing controls.

Drilling of 71 holes by RTZ in 1995/96 indicated a potential bulk-tonnage, open-pit geological resource of approximately 350,000 oz. contained in the two zones. Preliminary resource estimates put Rio Verde Chico at 2.4 million tonnes grading 1.2 grams gold per tonne and Tres’X at 4 million tonnes grading 2 grams gold.

Interspersed within the lower-grade silicified material are high-grade bonanza veins grading from 10 to 100 grams. Balaclava’s objective is to prove up the continuity of these high-grade veins, which lie along two northerly trending, coalescing ridges that host the geological resource.

The company completed eight holes in the Tres’X area. Holes 7, 8, 10, 11 and 12 tested a 750-metre-long, north-northwesterly trending structure that forms the eastern limits of the Tres’X zone. Holes 7 and 8 were collared from the same site on the northern end of the zone. Hole 7 was drilled to the northwest and intersected 6.7 metres averaging an uncut 13.86 grams gold (10.1 grams cut), starting at a downhole depth of 8.8 metres. Hole 8 was drilled to the west and encountered 2.1 metres grading 5.88 grams, beginning at an 8-metre depth.

Stepping out 250 metres along strike to the south-southeast, hole 10, oriented to the west, hit 2.5 metres averaging 84.56 grams (13.15 grams cut) starting at a downhole depth of 39.5 metres. Holes 11 and 12, which were drilled on the southern end of the zone, encountered no significant results.

Hole 9 tested a zone on the western side of Tres’X, where surface work had yielded some interesting values. The hole tested the structure at depth in a southwesterly direction but encountered significantly weaker values.

Drill holes 13 and 14 tested the central portion of the Tres’X zone. The holes were drilled in an easterly direction in the vicinity of some of RTZ’s earlier holes. Hole 13 returned 23.7 metres averaging 48.97 grams (15.2 grams cut), beginning at a depth of 50.8 metres. A nearby vertical hole of RTZ, No. 34, had cut 70.8 metres averaging 2.3 grams starting at 7.5 metres.

Hole 14 was collared about 50 metres southwest of hole 13 and intersected 5 metres grading 4.72 grams at a depth of 18-23 metres. Hole 37, previously drilled in a northerly direction by RTZ just south of hole 14, had encountered 67 metres grading 2.6 grams starting at a depth of 79 metres.

In the Rio Verde Chico area, six holes were drilled, most of which cut low-grade material, with only sporadic high-grade values.

While Balaclava is continuing surface work in the Paraiso and Magdelena areas, further drilling, along with structural mapping and geophysics, is planned.

The company can earn a 70% interest in the El Corazon property by making cash payments totalling US$560,000 over three years and incurring expenditures of US$1.5 million. On completion of a feasibility study, a payment equal to 1% of the recoverable ounces is required. Balaclava then has the right to increase ownership to 100%. The property is 60 km north of the capital city of Quito.