El Callao outlines gold zone in Venezuela

Drilling on the Venezuelan property known as Lo Increible is outlining a second zone of gold mineralization for El Callao Mining (VSE).

The company, which is earning up to a 70% interest in the property, reports that drilling has traced the Cruz zone over a strike length of 750 ft. It remains open to the southwest, as well as at depth.

The company expects to release further results as they become available.

Recent results include: 71.2 ft. grading 0.18 oz. gold per ton in hole 95-95; 7.2 ft. grading 0.38 oz. plus 9.8 ft. grading 0.18 oz. in 95-97; and 3.3 ft. grading 0.29 oz. in 95-98.

Drilling on the zone last year returned a 15-ft. intersection grading 0.28 oz. plus a 10-ft. intersection grading 0.39 oz. in hole 94-30, and a 60-ft. intersection grading 0.19 oz. in 94-42.

Meanwhile, El Callao plans to start mining on the nearby La Victoria deposit upon receipt of the necessary permits.

The operating plan calls for mining of 8,000 tons per month at an average grade of 0.28 oz. gold, to produce an estimated 26,000 oz. per year. The ore will be milled, under a year-long contract, at Monarch Resources’ nearby operation.

Based on a gold price of US$390 per oz., El Callao expects the project to generate monthly cash flow of about $350,000. The revenue will be used to fund ongoing exploration and feasibility work.

Resource estimates for La Victoria have yet to be released, although a large deposit is indicated by drilling carried out over an area measuring 1,650 ft. in length, 100 ft. in width and 700 ft. in depth. Feasibility work will begin shortly.

To define the size of the deposit and upgrade the reserve, El Callao plans to carry out diamond drilling beginning in September.