EXPLORATION 1998 — Campbell plans further exploration at Santa Gertrudis mine property

At its Santa Gertrudis mine in northern Mexico, Campbell Resources (CCH-T) has completed an exploration program designed to delineate easily accessible deposits that would lend themselves to near-term production.

The company identified three major structures with gold-bearing potential southeast of the mine. These structures were the focus of exploration during the second half of 1997 and will continue to be explored intensively in the current year.

The shear zone known as La Gloria is associated with three exploration targets, dubbed the Tigre, Nadia and Tracy zones; these zones extend over a 1.1-km section of the Gloria zone, leaving 4.4 km of the structure as yet unexplored.

The other major structure is the Tracy zone, which was discovered during a regional geochemical soil sampling program. Subsequent trenching and drilling have confirmed the presence of mineralization at depth. The zone has a known strike length of 125 metres, ranges in width up to 38 metres and remains open along strike and at depth.

Farther south along the Gloria shear zone are the Nadia and Tigre zones.

Several of the holes at Tigre intersected economic grades of oxidized mineralization. The Nadia zone, situated between the Tracy and Tigre structures, has undergone initial exploration, including sampling, mapping and trenching, with what Campbell describes as encouraging results.

Another structure, known as the Ontario zone, occurs as a splay branching off of the Gloria shear zone. Trenching, channel sampling and drilling have delineated a 450-metre-long target area associated with the Ontario shear that hosts the Greta Northeast, Greta Hill, Greta Ontario and Greta Sur zones. To date, more than half of the holes returned multi-gram intersections over widths of up to 4.5 metres. The 500-metre-long interval at the junction of the Ontario and Gloria shear zones and the most southwestern drilling on the Greta shear also appear promising, Campbell says, with two surface samples assaying 23.09 and 13.91 grams gold per tonne.

A program of soil sampling, trenching and preliminary drilling is continuing to evaluate the Esperanza, Lupita and Lupita South zones, which are associated with the 5-km-long Esperanza-Lupita fault zone, situated southeast of the Ontario shear zone. Sampling has returned gold values of up to 267 grams over 0.5 metre.

In addition to near-surface oxide reserves, Campbell is investigating the potential for deeper gold-bearing sulphide mineralization. Results of Campbell’s exploration efforts and an independent consultant’s report supporting the similarities between Santa Gertrudis and deposits in Nevada’s Carlin trend have prompted management to seek a joint-venture partner to evaluate the potential for deep sulphide mineralization.

Campbell reports that several major gold mining companies visited Santa Gertrudis with a view to participating in a joint-venture exploration program, and all expressed “considerable interest” in the property’s deep sulphide potential. Because of the current trend of low gold prices, however, no firm offers were forthcoming. Campbell has chosen, therefore, to focus on exploration of near-surface oxide mineralizion, at least until gold prices improve.

Depressed gold prices took their toll on the company’s balance sheet in 1997. A loss of $40 million (or 27cents per share) was recorded, compared with earnings of $9 million (6cents per share) in 1996.

The Joe Mann mine in northwestern Quebec produced 73,500 oz. of the yellow metal, an increase of 4.5% over 1996. The higher production was due to an increase in the head grade and an increase in mill recoveries.

Campbell’s total gold production for the year was 113,000 oz., compared with 125,000 oz. in 1996. The decrease is attributable to the mining of lower-grade material at Santa Gertrudis and the cessation of mining operations there in early December.