Bema high on potential on Refugio property

Recent drilling on the Refugio property in northern Chile’s Maricunga district has convinced Bema Gold (TSE) that the property has potential to host a “world class” gold deposit.

The Vancouver-based junior said results obtained from previous and current exploration programs on the property indicate “potential for a gold-copper reserve in excess of 200 million tons,” of which a sizable portion appears to be heap leachable, oxide-hosted, gold mineralization.

By the end of this year, Bema expects to have completed a feasibility study to earn its 50% interest in Refugio. And assuming positive results, Bema and equal partner, Cia Minera Refugio of Chile, plan full-scale development of an open pit, heap leach mine in late 1991 that would be capable of producing in the range of 100,000-200,000 oz. gold per year.

“This is the perfect project for Bema to make the leap into the big leagues in terms of production,” said Clive Johnson, president of Bema. “We know heap leaching, and because it’s heap leaching the capital costs are not too onerous for a junior.”

Although capital costs estimates for a proposed heap leach mine are still preliminary, Johnson said he expected it would be in the range of $30-50 million, “assuming a large, 5-million-ton-per-year operation.”

Bema acquired the Refugio property last summer, and began work shortly after opening its first gold mining operation in Idaho. The Champagne mine, expected to produce about 20,000 oz. gold each year, is the first of several small, heap leach mines being developed to production by Bema (85%) and partner Glamis Gold (TSE) in Idaho.

Andrew Muir, a resource analyst with Yorkton Continental Securities of Vancouver, said Bema was able to acquire its interest in the Chilean project because of its ability to finance, develop and operate heap leach mines, albeit on a smaller scale.

“But this property has a very good chance of being the big one,” he said.

Bema’s recent program at Refugio consisted of 45 reverse circulation drill holes totalling 16,000 ft. on the Verde deposit. When combined with previous work, drilling on the Verde deposit now consists of 78 holes drilled over an area 3,300×1,700 ft. of oxide and sulphide-hosted gold-bearing stockworks.

The company estimates it has now outlined a large gold mineralized body minable by open-pit methods — 3,900 ft. in length with an average width of 800 ft. and a thickness ranging from 250 ft. to more than 400 ft.

Although infill drilling is still required to prove up a minable deposit, Bema released preliminary reserve estimates for the Verde deposit within an initial pit outline.

Preliminary estimates are reported as 105 million tons grading 0.031 oz. gold per ton for combined oxide and sulphide reserves; 75 million tons of 0.030 oz. gold for total oxide reserves.

The oxide deposit is still open laterally to the northeast, as well as to the east, west and southwest. In addition, the ultimate vertical extent of the stockwork (through the oxide and underlying sulphide zones) is not known and must await deep drilling.

Stripping ratios are currently estimated at about 1:1 waste to ore because of the favorable topographic setting of the deposit. On the metallurgical side, the company said preliminary coarse bottle roll tests show the oxide mineralization to be amenable to heap leaching with low cyanide consumption. Metallurgical testwork is continuing, with bottle roll tests now under way to test the leachability of the mixed and sulphide ores.

The Refugio property also contains the Pancho gold-copper mineralized zone currently measuring 2,400×1,500 ft. Bema said previous shallow drilling and trench sampling indicated the potential for a sizable sulphide deposit carrying values in the range of 0.03-0.035 oz. gold and 0.2-0.3% copper.

In addition to the development program on the Verde oxide deposit which will include 50,000 metres of drilling, Bema is planning exploration programs this year for the Verde sulphide deposit and the Pancho gold-copper zone.

The Refugio property, in the active Maricunga district where a number of other companies are developing mines, is accessible by gravel roads and has its own water supply. Although situated at a high altitude, snowfall is minimal.