Francisco Gold boosts resource in Mexico

Junior Francisco Gold (FGX-V) has increased the minable resource at El Sauzal, its project in northern Mexico.

Situated 13 km west of Batopilas in Chihuahua state, the property contains a reserve of 20.9 million tonnes grading 3 grams gold per tonne, equivalent to 2 million contained ounces. This material has been deemed minable by open-pit methods.

The resource calculation, performed by Mine Reserves Associates of Colorado, was based on 187 diamond drill holes totalling 27,250 metres and 1,560 surface channel samples. The overall total resource varies, depending on three cutoff grades, as outlined below:

51.5 million tonnes grading 2 grams gold based on a 0.5-gram cutoff (3.3 million contained ounces);

48.7 million tonnes grading 2.1 grams gold using a 0.6-gram cutoff (3.3 million contained ounces); and

45.4 million tonnes grading 2.19 grams gold using a 0.7-gram cutoff (3.2 million contained ounces).

The oxide resource has increased by 170,000 oz. gold to 29 million tonnes grading 2.6 grams gold based on a 0.6-gram cutoff.

Francisco reports that, overall, the 1999 drill program increased the gold content in the measured category by 128%.

The project is expected to produce gold at a cash cost of US$75 per oz. during the first four years, with an annual production target of 310,000 oz. Total capital costs are pegged at US$206.9 million, with a daily processing rate of 10,000 tonnes over a 7-year mine life.

Bulk testing has confirmed a gold recovery rate of 93%, whereas heap-leach column tests point to a recovery of nearly 90%. Further studies will consider the viability of heap leaching in conjunction with a milling circuit.

Geologically, El Sauzal represents a high-sulphidation, epithermal gold deposit. The host rocks comprise andesite flows, tuffs and breccias, which grade upward into intercalated, highly altered dacitic volcanic rocks. Gold mineralization is associated with quartz-kaolinite-dickite-alunite alteration in the upper dacite. The dacitic host rocks are overlain unconformably by post-mineral rhyolite-dacite breccias and conglomerates that contain no significant gold mineralization.

As part of a full feasibility study, M3 Engineering has been contracted to supervise environmental baseline studies and geotechnical evaluations for the tailing ponds.