EXPLORATION ’95 — Kennecott plans more Honduran drilling

Results from recent exploration work have prompted Kennecott Exploration to plan further drilling for a gold-copper project in Honduras.

The major, which has the right to earn a 60% interest in the project from Milagro Minerals (VSE) by providing a full feasibility study, recently made an option payment and decided to continue work on the property. It has an option to acquire an additional 10% within the 3-year option period for a cash consideration.

Milagro had previously spent $3.7 million exploring its land package in Honduras, with work focused on several gold-copper mineralized systems in easy-to-mine saprolite-laterite material.

The company was aiming to develop the open-pit, oxide gold zone where drill-indicated reserves were previously reported in the range of 4 to 7 million tons at 0.04 to 0.07 oz. gold per ton. The property also hosts several known but untested mineralized areas.

During its recent first-phase program, Kennecott drilled 12 exploratory holes which were aimed at testing geochemical targets of the downdip extension of the Main and Nelson zones.

Results from the Main zone include 92.66 ft. grading 0.148 oz.; 24.27 ft. of 0.034 oz.; 141 ft. of 0.038 oz., which includes 86.5 ft. of 0.042 oz.; 82 ft. of 0.128 oz.; and 101.77 ft. of 0.023 oz.

Milagro reports that preliminary metallurgical testing of both oxide and sulphide mineralization indicates good recovery rates, ranging from 78-93% of contained gold with moderate cyanide consumption and grinding to minus 200 mesh. Autogenous milling with mechanical and carbon-in-pulp gold recovery would be used in commercial production.

The property is accessible and within an hour’s drive of San Pedro Sula, the largest city in Honduras.