EXPLORATION ’99 – Rio Tinto backs junior’s search for gold

A newly consummated “strategic alliance” with a unit of Rio Tinto Mining (RTP-N) will allow Uruguay Goldfields (UGIL-C) to continue exploring gold and base metal targets on its 100,000 ha of concessions in Uruguay.

The major recently purchased 1.6 million shares of Uruguay Goldfields, which intends to use the proceeds of US$1 million to explore its land package. Among the defined gold targets are Minas de Corrales, Presidente Terra and Valentines. The land package also covers the Texas gold-copper target and the Retamosa zinc-silver-lead target.

Under the terms of the alliance, Rio Tinto will have the right to earn a 55% interest in the Minas de Corrales project by spending US$2.5 million over five years. It also holds the right to earn a 55% interest in any other project by spending US$5 million within five years.

The major can acquire a further 15% stake in any specific project by spending an additional US$8 million on that project over five years, or by producing a positive feasibility study. An additional 10% interest can be earned by financing mine development costs, thereby bringing to 80% the major’s total interest in any specific project.

Minas de Corrales, situated near the town of the same name in north-central Uruguay, is described as being contained in a package of rocks and structures analogous to those hosting the nearby, producing San Gregorio mine, which at last report had a published reserve of 5.3 million tonnes grading 2.6 grams gold per tonne.

Gold mineralization at Presidente Terres, about 240 km northeast of Montevideo, is associated with shear-hosted quartz veins, as well as an underlying gold-mineralized, silicified unit. Known mineralization at the Valentines project is largely associated with narrow shears, though silicified, altered zones in the intervening areas are also of interest.

The Texas project covers a sequence of stacked, shallow-

dipping quartz veins with gold-copper mineralization. Exploration is focused on testing these structures at depth. Retamosa is about 7 km west of the Presidente Terra gold project. Previous work has outlined a surface zone of high-grade, silver-lead-zinc mineralization hosted in a sequence of Lower Proterozoic brecciated dolomites and limestones.

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