EXPLORATION 1997 — Laramide starts third phase of drilling at Cerro Colorado

A work program, including 10,000 metres of exploration and development drilling, is under way at the Cerro Colorado gold project in Sonora state, Mexico.

Operator Laramide Resources (LAM-T) hopes to complete the program by late summer in order to begin prefeasibility studies and permitting for an open-pit, heap-leach operation.

Described as a rhyolite, dome-hosted gold occurrence, Cerro Colorado hosts an inferred resource of 32.6 million tonnes grading 1.5-2 grams gold per tonne.

The estimate is based on an independent study prepared by Behre Dolbear in October 1995.

The area has a history of limited production, with former mines situated in mineralized rhyolite and limestones. The main development areas are in sheared and mineralized rhyolite, exposed at surface along the flanks and at higher elevations.

Secondary targets are found in the valley floor, where limestones and rhyolite make contact beneath a cover of alluvial gravel. Laramide views these zones as promising and will drill-test them during the current phase of work.

Last year, the company drilled 87 holes totalling 6,500 metres, thereby expanding known resources at Cerro Colorado. Three separate zones were sufficiently defined to allow for a new resource calculation.

The Obra X zone contains a resource of 418,000 tonnes grading 1.4 grams gold; the Breccia Harris hosts 1.6 million tonnes of 1.54 grams; and the Breccia Central contains 2.2 million tonnes of 1.29 grams.

Together, these zones provide preliminary resources totalling 4.3 million tonnes grading 1.36 grams. Two other zones have been tested and, though results are described as “promising,” not enough work has been done to allow for size and grade calculations.

All zones, except Obra X, are open and will be expanded and refined by infill drilling. In particular, the company hopes to double resources at Breccia Central and increase the size and grade of Breccia Harris. Metallurgical tests indicate recoveries of 70%-80% and low reagent consumptions.