Black Swan Gold reports mixed results from Cata Preta

Junior Black Swan Gold Mines (BSW-T) is intensifying efforts to outline the Cata Preta gold prospect in Brazil’s Minas Gerais state.

The deposit has now been drill-tested along a strike length of more than 500 metres and to a depth of 120 metres.

The area is covered by a carvoeira zone of poorly consolidated manganiferous ironstone. The stucture is underlain by a sequence of quartzites, sandstones and banded ironstones.

The gold-bearing carvoeira was extensively mined by open-pit methods beginning in the 1650s. The workings extend to a maximum depth of 60 metres.

In the early 1800s, underground methods were employed to mine high-grade gold from quartz veins in the sandstone and ironstone host rocks.

Prior to the 1996 program, Black Hawk outlined a resource of 850,000 tonnes grading 5.14 grams gold per tonne in a 180-metre section of the carvoeira.

The latest results are for holes 34 through 40A. Hole 39 was drilled 80 metres south of the 1992 hole, CP-01, to test the extent of historic open-pit mining in the area. A 1.97-metre interval grading 5.96 grams was intersected at a depth of 89.83 metres. The company believes a significant portion of the zone had been mined previously.

Stepping out 300 metres south of CP-01, hole 35 returned only anomalous mineralization in 60 metres of host carvoeira.

Hole 40A was collared 300 metres southwest of CP-01 and intersected 10.96 metres of 3.23 grams at a depth of 27.49 metres.

A further 50 metres southwest of hole 40A, a 16-metre interval of weakly mineralized carvoeira was intersected by hole 37. No significant results were reported.

Infill hole 37 was designed to test updip of mineralization, 150 metres south of CP-01, but intersected only anomalous values and a large section of backfill from the old open pit.

Hole 34 was drilled in the vicinity of earlier hole CP-19 (180 metres southeast of CP-01) and encountered 22.45 metres of 2.47 grams. Hole CP-19 had intersected 40.5 metres of 3.1 grams.

Drilling continues to step out to the east and north.

Black Swan holds the right to earn a half interest in Cata Preta under an agreement with the Sul America Mineracao group, which is controlled by Luigi Giglio.

The Vancouver-based junior has entered into a preliminary agreement with Giglio to acquire the full 100% interest in Cata Preta, as well as an additional 21 exploration properties in Brazil. The proposed equity-for-asset swap would boost Giglio’s ownership of Black Swan to 50% from 10.6%. Black Swan would also be required to make a cash payment of US$1.3 million.

The 21 properties include 14 gold properties covering 300,000 ha, as well as 220,000 ha of diamond prospects and 30,000 ha of base metal prospects.

Black Swan has 78 million shares outstanding, or 101 million fully diluted.