EXPLORATION ROUNDUP — Argosy drills for gold in Slovakia — Gold distribution augurs well for cost projections

Junior Argosy Mining (AGO-V) continues to expand reserves at Kremnica, a former gold and silver producer in central Slovakia.

The project comprises 28 sq. km in the Kremnica epithermal district, about 145 km northeast of the capital city of Bratislava. Discovered in the 10th century, the deposit was mined, off and on, by open-pit and underground methods until the 1970s. Historic production is estimated at 1.5 million oz.

gold and 6.7 million oz. silver.

Since acquiring the mine in mid-1996, the company has uncovered new zones of mineralization around Sturec, the main deposit, where mineralization is found in a series of north-south-trending banded and vuggy quartz and quartz carbonate vein systems hosted in Tertiary-age volcanics.

At the time of Argosy’s acquisition, the in situ resource available for open-pit mining stood at 8.3 million tonnes grading 1.45 grams gold and 11.6 grams silver per tonne. Including silver credits, the resource totalled 428,000 contained ounces of gold-equivalent.

Eighteen months, $5 million and 79 drill holes later, Argosy has tripled the resource to more than 20 million tonnes grading 1.57 grams gold and 13.6 grams silver, based on a cutoff grade of 0.5 gram gold. Contained in this resource are an estimated 1.03 million oz. gold and 9 million oz. silver.

The in situ resource comprises two separate zones. The Sturec zone was calculated by Western Services Engineering to contain 19.5 million tonnes grading 1.54 grams gold and 13.2 grams silver. The Vratislave zone, situated just north of Sturec, contains about 1 million tonnes of 2.18 grams gold and 21.6 grams silver per tonne, based on an unaudited estimate by the Slovak Geological Survey.

“We have enough gold at Kremnica to sustain the capital cost of an operation,” says Argosy’s president, Yale Simpson. “What’s important for us is to understand the distribution of that gold.”

He adds that, in the present gold climate, a project is not viable unless it can run at a cash cost of under US$200 per oz. with a quick payback of capital. Kremnica can achieve this, he says, given its distribution of mineralization.

An updated resource estimate is expected before year-end.

Four targets

The Vancouver-based company has identified four additional targets surrounding the Sturec zone; South Ridge, Katarina, Volle Henne and Wolf.

* South Ridge — Situated slightly west of the Sturec deposit, this zone comprises an area measuring 200 by 500 metres. Stockwork mineralization strikes northerly and dips steeply to the east and parallels the vein system of the Sturec deposit.

The most recent assay results indicate wide zones of mineralization. Hole 122A was drilled downdip and intersected 38 metres grading 3.79 grams gold and 7.3 grams silver. Hole 124 hit 14 metres of 1.13 grams gold and 4.45 grams silver, and defined the northern limit of the South Ridge zone. Holes 148 and 151 encountered multiple intercepts across the stockwork zone.

Assays range from 0.57 to 5.58 grams gold over widths of 2 to 10 metres (with one exception: 3.23 grams gold over 16.2 metres). South Ridge is bounded by a fault to the west but remains open to the south.

Steve Potter, president of Argosy’s Slovakian subsidiary, says the company had planned to mine South Ridge as waste in order to gain accesss to the Sturec resource but that the waste is now valued as as a resource in its own right.

* Katarina — Situated just north of South Ridge, the Katarina zone represents a partially mined, northeast-trending vein system that intersects the Sturec deposit to the east.

Reconnaissance drilling intercepted high-grade gold mineralization in two holes. Highlights include: 1 metre grading 47.8 grams gold and 19.8 grams silver; 2.6 metres of 3.7 grams gold; and 9.5 metres of 1.8 grams gold. More drilling is planned on the 1-km-long target.

* Volle Henne — Lying immediately north of Katarina and 600 metres west of the Sturec deposit, the Volle Henne zone is in the early stage of exploration. Nonetheless, extensive gold-in-soil anomalies have been detected over an area measuring 1 km long and 70 to 180 metres wide. Argosy is considering a program of winter trenching.

* Wolf — At the Wolf zone, 1,500 metres north of Sturec, seven holes were recently drilled, all but one of which intersected north-south-trending veins of mineralization hosted in rhyolite and andesite. Highlights include 3 grams gold and 16.7 grams silver over 15 metres, and 4.08 grams gold and 34.6 grams silver over 5.5 metres. Assays from follow-up drilling are pending.

“We may be dealing with a fairly complicated beast here” says Garry Stock, Argosy’s investor relations officer. “The north fence of holes was designed to shed some light on the structure of mineralization.”

Argosy plans to attack the Volle Henne target next season, as well as continue work at the Wolf zone.

Additional projects

Kremnica is but one of several properties the company is exploring in Slovakia. Argosy has a 75% interest in the 14-sq.-km Banska Stiavnica prospect and recently received assay results from six drill holes that targeted three vein structures. No ore-grade intercepts were encountered.

Situated 25 km south of Kremnica, the property is in a region that, in the Middle Ages, was central Europe’s largest producer of gold and silver.

Argosy also holds a 100% interest in the 94-sq.-km Nova Bana licence and a 75% stake in the 36-sq.-km Pukanec property. Both are roughly 40 km south of Kremnica and host epithermal vein- and stockwork-type deposits that were extensively mined in the 16th century. The properties may still have potential for disseminated gold systems in untested areas of hydrothermal alteration.

Meanwhile, in eastern Slovakia, the company is in the early stages of exploring three properties that, together, comprise 1,195 sq. km of Neogene-age volcanic rocks in the Vihorlart and Zlata Bana ranges.