Having established its presence here more than a decade ago,
Key to the Vancouver-based junior’s strategy is expanding on what is already one of the largest land positions in the country. Energold now owns 10 exploration concessions, along with optional or back-in rights to another 17 concessions, for a total land package of 90,000 ha.
“The Dominican Republic struck us as a place where exploration was waiting to happen,” Energold President Walter Sellmer told The Northern Miner during a visit to the West Indian country. “It has excellent geology and, in spite of the fact that it’s rather a small territory in terms of square kilometres, it contains one of the largest gold deposits [Pueblo Viejo] in the world. It has been largely underexplored, primarily for political reasons, which we could see were beginning to change for the better.”
Sellmer said Dominican President Leonel Fernandez is responsible for the improved political climate. Fernandez was democratically elected to a 4-year term in 1996, replacing Joaquin Balaguer who had ruled over the country for most of the previous 30 years. Since coming to power, Fernandez has sought to stimulate foreign investment by modifying and liberalizing the country’s foreign ownership laws, tax laws, import and export restrictions, and mining laws.
Sellmer views the appointment of Octavio Lopez as director-general of mines in mid-1997 as a positive change. Lopez has been instrumental in improving the efficiency of the concession-granting process.
More recently, the government passed a set of regulations governing the environmental aspects of exploration and development. The newly formed Chamber of Mines and Petroleum was instrumental in bringing together representatives of the mining industry, government and environmental groups to work out the details of those regulations, which were based on World Bank international standards.
Dominican mining law allows for foreign ownership of mineral title and the right to exploit it. Concession rights are granted in two stages — exploration and exploitation. An exploration concession allows the owner to explore for minerals for up to five years. The holder can then re-apply for the concession or apply for the right to mine through an exploitation concession, which has a term of up to 75 years.
Ownership of a concession must be 100%, though the holding entity may have multiple-share ownership. A corporation or individual can hold no more than 30,000 ha of exploration concessions and 20,000 ha of exploitation concessions. An optional or back-in right does not constitute ownership, and, in the case of ownership through a corporation, a company or individual must own 50% or more to be deemed the controlling owner.
The Dominican Republic forms the eastern two-thirds of the island of Hispaniola, with Haiti occupying the western end. It consists of a rugged central chain of mountains, north of which lies a major graben called the Cibao Valley. Beyond it is a moderately mountainous terrane, the Cordillera Septentrional. To the south lies a series of flat coral reef platforms. The island is accessible by a network of paved and secondary gravel roads.
After it was incorporated in 1994, Energold began looking for opportunities in Latin America. In early 1995, the company became aware, by way of
Hispaniola’s key asset at that time was Centenario, a gold deposit which had turned out to be too small for Battle Mountain and Canyon at an estimated 220,000 oz. contained in 1.1 million tonnes grading 6.27 grams gold per tonne. Energold entered into a deal to acquire 100% of Minera Hispaniola, which also held the Majagual porphyry copper-gold concession (later optioned to
Energold took over exploration at Centenario and drilled 5,000 metres in 50 holes. The company determined that though the deposit was locally high-grade, the gold was nuggety in distribution, structurally complex and contained fewer ounces than expected, with a resource of some 150,000 oz.
In 1997, Energold turned its efforts to a regional reconnaissance program over the Los Ranchos Formation, while waiting for exploration concessions to be granted.
Today, Energold, through its ownership of Minera Hispaniola and Casa Real, holds 27,605 ha directly. It has the right to earn up to a 60% interest in 24,106 ha from Actividades Mineras, in addition to back-in rights for up to 60% in 38,918 ha held by three other companies: Inversiones Mineras, Minera Monte Plata and Proyectos Mineros.
At one point, Eldorado was a major shareholder in Energold, with a 44% interest. In April 1998, Eldorado sold most of its share position; as a result, there is no single Energold shareholder with more than a 10% interest. Eldorado still holds 927,000 shares of Energold, along with 800,000 warrants.
Energold has 14.3 million shares outstanding, or 17.1 million fully diluted, as well as $1.9 million in cash.
The island of Hispaniola has undergone several periods of Early Cretaceous to Eocene island-arc building that were accompanied by extensional and compressional tectonic activity creating a prevailing northwest-striking trend across the island. Energold’s land holdings cover key portions of the Los Ranchos, Maimon and Tireo Formations — distinct island-arc assemblages of bimodal volcanics and derived epiclastics.
The Los Ranchos Formation is a 100-km belt extending through the east-central part of the country and is host to Pueblo Viejo, as well as several other high-sulphidation epithermal targets associated with northwesterly striking structures, including the Managua amd Ceja de Coco concessions of Falconbridge. The former contains a resource estimated at 6 million tonnes grading 2.22 grams gold and 5.67 grams silver, plus 0.81% copper.
Pueblo Viejo is a major gold-silver property owned and operated by the Dominican government. The property is believed to host an undeveloped sulphide resource in excess of 200 million tonnes at an average grade of about 3 grams gold, equal to about 20 million contained ounces plus accompanying silver credits.
Rosario Resources, then a subsidiary of Amax, began open-pit mining of the oxidized portion of Pueblo Viejo in 1975, processing the ore in a cyanidation mill. The government nationalized the mine in 1979 and full-scale mining continued up until 1993. By that time, virtually all the oxide and transitional ore reserves had been depleted. Energold reports that during the period 1975 to 1993, more than 50 million tonnes grading 4 grams gold and 20 grams silver were mined.
Today, limited mining by Rosario Dominicana continues at Pueblo Viejo but on a small scale, producing fewer than 40,000 oz. per year.
Several majors, including Gold Fields, MIM Holdings of Australia and
Pueblo Viejo occurs in the upper part of the Los Ranchos formation, a laminated carbonaceous siltstone and sandstone, with local conglomerate layers grading
downward into diatreme breccia and other fragmental debris. Sellmer said the mineralized units were once interpreted to have formed in a maar-diatreme complex but are now considered nothing more than a near-vent volcanic breccia.
Gold-silver mineralization at Pueblo Viejo occurs in funnel-shaped, graphite-rich siliceous zones, with sulphides consisting primarily of pyrite and locally up to 2% zinc in sphalerite, plus enargite. In the Moore deposit, zones of up to 1.5% copper accompany the gold.
The Maimon formation is a northwesterly-striking belt of schistose volcanic rocks cutting across the central part of the country over a length of 75 km and an average width of 10 km, which has been deformed and regionally metamorphosed.
The Los Ranchos formation was originally thought to be younger than the Maimon formation, largely because it was undeformed, but Sellmer said evidence amassed over the past several years suggests that both are more or less coeval. “If there is a difference, the Maimon, in large measure, has formed in deeper water and lies in a tectonic block, which has caused it to be strongly deformed,” he said. “It has a strong penetrative foliation.”
A number of VMS occurrences have been found in the Maimon Formation, including Falconbridge’s Cerro Maimon deposit (3.5 million tonnes grading 3.77% copper, 2.04% zinc, 46.36 grams silver and 0.62 gram gold) and Energold’s San Antonio prospect.
The Tireo Formation occurs as a northwesterly trending belt across the Dominican Republic and into Haiti. It is well-known for gold-silver and polymetallic epithermal gold mineralization hosted by, or associated with, felsic lithologies, such as the government’s Restauracion fiscal reserve and Energold’s Centenario deposit.
Although the Maimon, Los Ranchos and Tireo Formations all consist primarily of volcanic rocks of comparable age, the geology and known mineral deposits of each belt are distinct. The tectonic setting has influenced the style of mineralization found in each belt.
Energold is currently focusing on is its Longyear concession, which sits in the Maimon Formation, 3.5 km southwest of Pueblo Viejo. Longyear is a bit of puzzler in that it hosts an oxide gold target whose protolith may have been a precious-metal-rich VMS deposit or a structurally controlled epithermal deposit, or some combination of the two.
The company is in the midst of a preliminary 1,000-metre diamond drilling program aimed at testing the bulk-tonnage potential of near-surface oxide gold mineralization.
The 1,090-ha Longyear property is held by Casa Real, which is wholly owned by Energold. Until recently, Eldorado had an agreement to acquire 51% of Longyear by funding all exploration and development to production. Owing to serious financial problems, Eldorado relinquished its option in November 1998 and agreed to pay Energold $175,000 in cash plus 150,000 of its shares and issue a $500,000 promissory note due in 2001.
The property was drilled by Northbridge Mines, a subsidiary of Falconbridge, in the 1960s with three diamond drill holes and 13 air-track holes. The three core holes were not systematically analyzed for gold when drilled but were later sampled at irregular intervals, yielding values up to 4 grams gold. One of the holes cut 53 metres of 0.22% copper. No information on the results of the air-track drilling is available.
Four reverse-circulation holes were also drilled by Rosario Resources in the 1970s. One of the holes intersected 42 metres averaging 0.62 gram gold, 7.6 grams silver and 0.82% copper, while another hit 12 metres of 0.5 gram gold and 0.22% copper.
Energold has defined a prominent, greater-than-50-parts-per-billion gold-in-soil anomaly measuring 700 by 1,600 metres, with coincident silver, copper, molybdenum, lead and zinc anomalies. Surface pit, outcrop and float samples from a northwest-trending, 300-by-700-metre, oxidized area averaged 1.22 grams gold for 165 samples, with several samples in excess of 5 grams.
The multi-element soil anomaly is underlain by strong induced-polarization (indicating potential sulphides) and resistivity (indicating silicification) geophysical anomalies.
Two hand-dug trenches were recently completed across the long axis in the 300-by-700-metre zone. The two trenches, with lengths of 185 and 230 metres, are subparallel and separated by a distance of about 125 metres. Trench A averaged 1.2 grams over its entire length of 185 metres. A central 90-metre section averaging 1.81 grams, included a 20-metre interval averaging 3.2 grams (with one section in this interval grading 5.64 grams over 5 metres) plus a second, 20-metre interval averaging 2.27 grams.
Trench B was dug along a roadside cut and averaged 0.6 gram over the entire 230-metre length. A 115-metre section at the northeastern end averaged 0.96 gram and included 25 metres grading 2.35 grams and 10 metres of 2.3 grams.
The higher-grade, multi-gram gold values occur in gossanous zones containing 20-50% iron oxide. The trenches were dug to an average depth of 1.75 metres and sampled continuously over 5-metre intervals. Trenching is continuing.
Helen Grond, project geologist, said surface sampling has shown consistent gold values in all material, even in dead-looking schist.
Energold is in the process of completing a series of shallow core holes to test the upper oxide portion of the main zone, as well as the upper parts of any sulphide mineralization. Up to 20 holes will be drilled on 100-metre centres to a depth of about 50 metres. At least two holes will test the zone at depths of 100 metres.
The initial program is designed to provide answers to questions pertaining to gold distribution, volume, and structural controls of the mineralization.
At the time of The Northern Miner‘s visit, seven holes had been completed. Since that visit, another 10 holes have been sunk. Strong iron oxidation was evident in the upper parts of the holes, with oxidation extending in the holes to depths ranging from 18 to 86 metres, for an average of 30 metres. The upper oxides exhibit a boxwork texture. In the deeper holes, the core is highly siliceous with evidence of sulphides, primarily fine-grained disseminated pyrite and minor sphalerite and chalcopyrite. The core exhibits strong penetrative deformational features that have obliterated some of the original textures.
Sellmer said the deeper drilling is more hydrothermal-looking than the oxidized rock, where observations are harder to make.
Energold uses its own sample preparation lab in the DR. It splits the core using a saw, saving half for later reference. Samples are crushed to 3/8 inch, and a representative split is taken with a rifle splitter. Samples are then shipped to Chemex Labs in Mississauga, Ont., for analysis. Check sampling is under way.
The company’s current phase of exploration at Longyear is budgeted at $250,000.
Atna recently entered into a joint-venture agreement whereby it can earn from Energold a 60% interest in the San Antonio concession by spending US$3 million on exploration over four years and issuing US$300,000 worth of shares.
The 3,250-ha concession is 25 km south of Pueblo Viejo and 20 km from Falconbridge’s Cerro Maimon VMS deposit. The property is underlain by Maimon Formation quartz-sericite schists, chlorite schists and tuffaceous sediments.
San Antonio is a totally blind target with no surface expression. Previous work identified a 6,000-by-600-metre multi-element, precious and base metal soil anomaly, with coinciding induced-polarization, chargeability and resistivity anomalies. Surface sampling of float boulders has yielded gold values of up to 5 grams.
Previous drilling of four holes by Battle Mountain identified VMS-style mineralization. One of these holes intersected 12.1 metres of massive to semi-massive sulphides grading 1% copper, 1% zinc, 15 grams silver and 0.4 gram gold at the contact between sediments and weakly deformed intermediate felsic volcanics. A separate 15-cm interval of massive pyrite in the hangingwall yielded an average value of 0.9% copper, 15.2% zinc, 34 grams silver and 5.8 grams gold over 0.3 metre.< P>Another hole stepped out 200 metres to the east and encountered 1.4 metres in the hangingwall grading 0.84% copper, 4.8% zinc, 13 grams silver and 4 grams gold, including 0.3 metre of 2.6% copper, 16.9 % zinc, 30 grams silver and 5.8 grams gold.
Peter Daubney, Atna’s project geologist, said the holes may have intersected the tip of a massive sulphide horizon that exhibits classic VMS zonation in the core, with an underlying vein stockwork.
Atna is conducting an initial reconnaissance program of mapping and sampling at San Antonio to firm up targets for a planned 7-to-10-hole drilling program, which is expected to begin in the next month or so.
Impact Minerals has the right to acquire a 100% interest in the Dominican company Proyectos Mineros, which holds five exploration concessions, including El Brujo. Energold retains a 60% back-in right.
Proyectos Mineros acquired El Brujo in October 1998. Previous work by BHP Minerals International Exploration identified a 1,000-by-1,000-metre gold-copper soil anomaly that has not been drilled. It lies in the Los Ranchos Formation.
Impact is arranging financing to conduct a minimum $150,000 program of preliminary mapping and sampling.
Be the first to comment on "Energold’s expansion reflects stability in Dominican Republic"