Geomaque cuts high grade at Tasiast

Some 20,000 metres of reverse-circulation infill drilling have allowed Geomaque Explorations (GEO-T) to revise its estimate of the resource at the Tasiast gold project in Mauritania, West Africa.

The initial, 155-hole program focused on the Colonne Piment and South Piment zones, which constitute nearly all the project’s previously tabled indicated resource and about two-thirds of the inferred resource.

The indicated resource is now pegged at 8.3 million tonnes grading 2.3 grams gold per tonne, or 611,000 contained ounces of gold. The inferred portion now consists of 21 million tonnes running 1.8 grams gold, or 1.2 million oz. The new estimates are based on a cutoff grade of 1 gram gold per tonne.

The estimates do not include results from 43 recent holes, owing to assaying problems. Material from these holes is being re-assayed, to be included in the next update, sometime before the end of summer.

Highlights from the recent drilling are as follows:

— Hole 344 — 33 metres (from surface) grading 4.5 grams gold, including 13 metres (from 20 metres below surface) of 9.2 grams gold, and 2 metres (from 23 metres) of 32.2 grams;

— Hole 354 — 14 metres (from 106 metres) averaging 9.6 grams gold, including 6 metres (from 106 metres) of 18.2 grams;

— Hole 380 — 18 metres (from 42 metres) running 8 grams gold, including 11 metres (from 48 metres) of 12.3 grams;

— Hole 421 — 39 metres (from surface) grading 5.3 grams gold, including 14 metres (from surface) of 9.6 grams gold, and 4 metres (from 8 metres) of 20.3 grams.

The following highlights are from drilling at South Piment:

— Hole 476 — 20 metres (from 88 metres) grading 6.6 grams gold, including 12 metres (from 91 metres) of 9.7 grams, and 2 metres (from 93 metres) of 24.9 grams;

— Hole 480 — 10 metes (from 24 metres) running 10.4 grams, including 2 metres (from 29 metres) at 47.3 grams and another 2 metres (from 93 metres) of 24.9 grams;

— Hole 504 — 25 metres (from 4 metres) averaging 6 grams gold, including 1 metre (from 8 metres) of 88.9 grams.

Midas Gold, a privately owned company based in the U.K., expects to complete its US$6.5-million acquisition of Tasiast by the end of June. The vendor, Newmont Mining (NEM-N), will retain a 2% net smelter return royalty on gold production exceeding 600,000 oz.

Meanwhile, Midas is being acquired by Geomaque as part of a 3-way merger deal that includes Australian-listed St Barbara Mines of Perth. Midas is controlled by Strata Mining (St Barbara’s biggest shareholder). Pending shareholder approval, Geomaque’s acquisition of Midas is slated to close by the end of June.

Under a revised deal, Geomaque and Midas would combine to beget Defiance Mining. The new company would be owned 50.1% by Geomaque shareholders and 49.9% by Midas shareholders (T.N.M., April 14-20/03).

After the new company attains a listing on the Toronto Stock Exchange, it will negotiate a business combination with St Barbara.

A scoping study at Tasiast suggests production of around 120,000 oz. a year at an average life-of-mine cash cost of less than US$185 per oz. Initial capital costs are pegged at US$37 million; sustaining capital, at US$11 million.

Newmont previously pegged Tasiast’s indicated resource at 18.8 million tonnes running 2.2 grams gold. Inferred resources were estimated at 12 million tonnes grading 1.9 grams gold.

Plans at Tasiast call for another 5,000 metres of reverse-circulation drilling plus 2,000 metres of diamond drilling. Results will be used to update the resource estimate. Geomaque plans to complete a bankable feasibility study by early 2004.