EXPLORATION 1998 — Aripuana deposit in Brazil displays base metal potential

— Drill results point to higher-than-expected zinc values

Drilling by Noranda (NOR-T) on the Aripuana joint venture in southwestern Brazil has returned encouraging base metal values.

The major, which is earning a 70% share in the precious and base metals prospect from Ambrex Mining (AMBX-C) and joint-venture partners St.

Genevive Resources (SGVE-C) and Ourominas Minerals (OMI-T), reports that hole 25 averaged 8.08% zinc and 8.69% lead, plus 341 grams silver and 0.21 gram gold per tonne.

Ambrex points out that this intersection stratigraphically underlies the main mineralized zone of the Valley deposit.

Hole 17, drilled previously, intersected 11.4 metres averaging 6.06% zinc, 1.4% lead and 117.2 grams

silver per tonne, whereas hole

24 cut 11.5 metres averaging 10.25% zinc, 4.02% lead, 1.06% copper, 57.75 grams silver and 0.4 gram gold.

Hole 25 contained 3.95% zinc, 2.5% lead, 93 grams silver and 0.08 gram gold over 65.5 metres, including the following higher-grade intercepts: * 9.5 metres (from 146.35 to 155.9 metres) grading 5.59% zinc, 1.75% lead, 0.25% copper, 62 grams silver and 0.06 gram gold;

* 7.4 metres (from 164.8 to 172.25 metres) grading 6.46% zinc, 2.88% lead, 0.21% copper, 97 grams silver and 0.06 gram gold;

* 33.8 metres (from 178 to 211.9 metres) grading 4.52% zinc, 3.63% lead, 0.19% copper, 135 grams silver and 0.1 gram gold; and

* 12.4 metres (from 199.5 to 211.9 metres) grading 8.08% zinc, 8.69% lead, 0.31% copper, 341 grams silver and 0.21 gram gold.

Noranda will continue to drill-test the Valley deposit, as well as the Minorco farm to the northwest. The latter deposit has not yet been explored by Ambrex or Noranda because, until recently, the surface rights were protected by Minorco, a subsidiary of South African mining house Anglo American.

Noranda is earning its 70% share of Aripuana by spending $28.9 million over five years. Once the major has earned in, Ambrex will retain 14.7%, Ourominas 9% and St. Genevive 6.3%. All of these interests would be held through Brazilian subsidiaries.

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Historic producer

Aripuana comprises 20 sq. km of garimpeiro workings that produced an estimated 8 to 10 tonnes of gold between 1979 and 1990. The project is situated near the town of Aripuana, in northwestern Mato Grosso state.

The property’s centrepiece is the Cava do Expedito, an open pit worked by garimpeiros that is believed to have produced about 70 kg of gold. In 1993, Unigeo, the Brazilian unit of Anglo American, tried unsuccessfully to reach an agreement with the garimpeiros on the property. Nevertheless, results from soil surveys led the company to stake adjoining areas to the south and the northwest, which were subsequently drilled.

The Brazilian arm of Australian-based major Western Mining took on the property in 1994 and found strong electromagnetic and induced-polarization responses in an area immediately west of the Expedito pit. Geochemical surveys showed high concentrations of gold, copper and molybdenum in soils from the same part of the property. Despite the encouraging exploration results, WMC dropped the property, following a change in its exploration strategy. This left the ground open for Consolidated Madison Holdings, which optioned the property to Ambrex.

Gold mineralization at Aripuana is associated with a 200-metre-wide shear zone characterized by intense hydrothermal pneumatolitic alteration represented by silicification, sericitization and greisenization.

The Valley base metal target is described by Ambrex as “perplexing.” It is apparent that skarnification has played a role in the mineralizing process; this, in combination with suspected faults, has complicated a classic volconogenic massive sulphide-type exploration target.