The program will determine the extent of a high-grade copper zone discovered in hole 8. The 52.8-metre interval averaged 4.6% copper plus 17.7 grams silver and 0.2 gram gold per tonne (including 15 metres of 10.6% copper, 38 grams silver and 0.3 gram gold), starting at a depth of 578 metres.
In addition, a new gold zone was identified at the top of the sulphide unit, where a 5-metre interval averaged 6.1 grams gold and 107 grams silver, plus 0.2% copper and 0.5% lead, beginning at 424 metres of depth.
The B-5 target is a gravity anomaly, 11 km south of the property’s TG-1 and TG-3 deposits. The target has been tested by six holes to date. Early estimates by Manhattan suggest that the B-5 anomaly may be caused by a sulphide body comparable in size to the TG-1 and TG-3 deposits.
Earlier this year, drill hole 8 was collared 120 metres east of the discovery, testing the B-5 anomaly, intersected 142 metres of massive sulphides averaging 0.5% copper, 0.9% zinc, 0.6 gram gold and 17 grams silver, starting at a depth of 436 metres. A higher-grade, 23-metre section ran 2% copper, 3.5% zinc, 1 gram gold and 56 grams silver at depths of between 464 and 487 metres. A third round of drilling is under way.
The first four holes in the latest program will be collared in a 35-metre grid around hole 8.
Manhattan has spent US$13.9 million exploring Tambo Grande, and continues to work on the prefeasibility study for the TG-1 oxide gold deposit and the TG-1 and TG-3 sulphide deposits.
The TG-1 oxide cap contains an inferred resource of 8 million tonnes grading 5.2 grams gold and 48 grams silver. This is equivalent to 1.3 million oz. gold and 12.4 million oz. silver. Further drilling on the underlying TG-1 sulphides expanded the resource to an inferred 64.2 million tonnes grading 1.7% copper and 1.4% zinc, plus 0.7 gram gold and 31 grams silver, based on a cutoff grade of 1% copper-equivalent.
At the beginning, the company expects the oxide deposit to be mined at the rate of 7,500 tonnes per day. Annual production is expected to hit 276,000 oz. gold and 3.7 million oz. silver, at a cash operating cost (after silver credits) of US$44 per oz., over a 3.5-year mine life. Then the base metal deposit would be mined at the daily rate of 15,000 tonnes to yield 60,000-70,000 tonnes of copper and 35,000-40,000 tonnes of zinc per year over a 10-year mine life. The total capital investment needed to develop both deposits is estimated at US$270 million over five years.
TG-3 lies about 500 metres south of TG-1 and consists of two distinct mounds, or lobes, of mineralization. The northern lobe is richer in zinc and contains 20 million tonnes grading 0.9% copper, 2.7% zinc, 0.8 gram gold and 35 grams silver, based on a cutoff grade of 1% copper-equivalent. The copper-enriched southern lobe hosts 48 million tonnes grading 1.1% copper, 1.1% zinc, 0.9 gram gold and 25 grams silver at a cutoff grade of 1% copper-equivalent.
Manhattan is earning a 75% stake in Tambo Grande, which consists of 10 concessions measuring 100 sq. km. The company also has a 100% interest in the Lancones concessions (737 sq. km) and an option to earn up to a 100% interest in the Papayo joint-venture lands (32 sq. km). The Lancones land package adjoins Tambo Grande mainly to the south and partially to the east and north. The Papayo concessions, which include the B-5 anomaly, are to the south. Manhattan can earn an initial 51% interest in Papayo by spending $5 million on exploration over five years and paying $250,000.
In Mexico’s Chihuahua state, operations at the Morris mine remained suspended throughout the first nine months of 2000. The company stopped mining in April 1999, owing to severe drought conditions and the low gold price. Manhattan is thinking of putting the mine up for sale, having written down the non-core asset by US$3.7 million in 1998 and US$8 million last year. The mine hosts proven and probable reserves of 3.4 million tonnes averaging 1.73 grams gold. The calculation is based on a gold price of US$300 per oz., a silver price of US$5 per oz., a recovery rate of 65% and a cutoff grade of 0.74 gram gold.
The heavy exploration costs at Tambo Grande left Manhattan with a loss of US$2.6 million, or US7 per share, during the first nine months of 2000. This compares with a loss of US$2.8 million, or US11 per share, in the corresponding period of 1999. At Sept. 30, Manhattan had net working capital of US$8.4 million and was debt-free.
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