Energold gains Dominican land — Geophysical program planned for Longyear gold property

It has been a long time coming but Energold Mining (EGD-V) has finally been granted two key exploration concessions in the Dominican Republic.

One of the properties, known as Longyear, adjoins the large Pueblo Viejo gold-silver mine to the southwest. Limited geochemical sampling on the 1,090-ha Longyear concession has revealed a prominent gold anomaly in soils, oxidized float boulders and limited outcrops, all of which exist in an open-ended 600-by-700-metre area. The average grade is 0.5 gram gold per tonne.

Samples range up to 5 grams gold, and include numerous values exceeding 1 gram. Anomalous values of silver, copper, molybdenum, lead and zinc coincide with the anomaly.

This prospect lies some 3.5 km southwest of the Moore and Monte Negro orebodies at the state-owned Pueblo Viejo mine, which is believed to contain a sulphide resource in the order of 200 million tonnes at an average grade of plus 3 grams gold, equivalent to about 20 million oz. gold and 200 million oz. silver. The oxidized portion of Pueblo Viejo has been mined by open-pit methods since 1975, producing more than 5 million oz. gold and 72 million oz. silver. The oxide reserves are now virtually depleted.

The Longyear concession is held by Casa Real, a Dominican company indirectly owned 51% by Eldorado Gold (ELD-T) and 49% by Energold. Eldorado is required to fund all exploration expenditures through to a positive feasibility study and pay Energold $2 million over four years.

Energold remains the operator for the first two years. In preparation for a 20-hole, 4,000-metre drilling program, planned for April, a tightly spaced induced-polarization geophysical survey will be carried out over the target area.

The other newly granted concession is the 2,400-ha Rey Midas property, which adjoins the Managua mineral discovery of partners Falconbridge (FL-T) and KWG Resources (kwgr-c). The Kiosk vein discovery on the Managua concession has provided encouraging results from an early-stage, 13-hole drill program.

Based on those results, Falconbridge has calculated a preliminary resource estimate of 4.7 million tonnes grading 2.3 grams gold and 4.9 grams silver, plus 0.91% copper.

Energold believes there is potential for the Kiosk vein to extend on to the Rey Midas concession and has begun a geochem sampling program. Rey Midas is held by Actividades Mineras, a company in which Energold can earn a 60% interest by spending $600,000 on exploration over four years.

In the meantime, surface trenching results are expected shortly from the Majagual copper-gold porphyry project in the Dominican Republic. Previous work had defined a 500-by-800-metre copper-gold anomaly marked by copper values of 0.1-7% and gold grades of 0.1-7.8 grams per tonne.

Impact Minerals (IPT-V) can earn a 60% interest in the 3,200-ha project from Energold by spending $1.25 million on exploration over four years.

In December 1997, the Dominican government granted mineral title to four other concessions held by partners of Energold.

Impact, through the Dominican company Proyectos Mineras, acquired the 5,825-ha Rey Croesus and 2,500-ha Helen concessions. Minera Monte Plata, which is controlled by Treminco Resources (TMO-T), acquired the 4,300-ha Baritina concession, while Double Creek Mining (DCM-V), through the Dominican firm Inversiones Mineras, was granted title to the 5,292-ha Comedreja concession.

The four properties are in the central and eastern regions of the Los Ranchos formation — the same formation that hosts the Pueblo Viejo mine.

Energold holds a back-in right for up to a 60% interest in each of the four properties.

Energold has working capital of $1.6 million, with 12.3 million shares outstanding (13.4 million fully diluted). Eldorado is Energold’s largest shareholder, owning 37.5%.