EXPLORATION ’99 – Glamis Gold advances Guatemalan gold deposit

A 35-hole drill program by Glamis Gold (GLG-N) at the Cerro Blanco project in Guatemala is attempting to prove up a resource of more than 1 million oz. by year-end.

Drilling by previous owner Mar-West Resources uncovered significant mineralization in nine holes beneath a gold-in-soil anomaly measuring 2,100 by 350 metres. Highlights included 111 metres averaging 1.48 grams gold per tonne and 50.3 metres grading 2.57 grams. A third hole hit 158.5 metres of 1.68 grams, including a 74.4-metre interval of 2.79 grams.

In early 1999, shortly after acquiring the property, Glamis drilled 10 widely spaced holes, which returned only marginal results.

Metallurgical tests indicate that the mineralization is not refractory, though much of it is locked up in silica related to a hot-springs system.

The current round of drilling is budgeted at US$400,000, and, for the year, Glamis expects to spend just under US$1 million at the property. A scoping study is due in January.

Overall, the company will reduce exploration spending to US$3 million in 2000 from US$6 million in 1999 — a decision based on low gold prices.

Cerro Blanco is a high-level epithermal deposit hosted in tuffs and volcaniclastics. It is situated in the southeast, near the border with El Salvador.

Meanwhile, in neighbouring Honduras, Glamis is awaiting final permits for construction of the San Martin gold mine. The open-pit project carries a capital cost of US$27 million.

Production could begin as soon as the third quarter of 2000. At full production, San Martin is expected to contribute 80,000 oz. gold annually at cash costs of less than US$150 per oz. over a mine life of at least 10 years.

Glamis also operates several gold mines in North America. During the latest quarter, these operations turned out a total of 41,574 oz. gold at a total cash cost of US$207 per oz.

The company recently sold the Ivan copper mine and related copper assets in Chile for US$21 million. Glamis acquired the copper assets as a result of a previous merger with Rayrock Resources.

On the financial front, Glamis reported a loss of US$2.9 million for its latest quarter, compared with nil earnings a year earlier. The company has working capital of US$45.5 million, including US$30 million in cash. This total does not include proceeds from the sale of the Ivan assets.