GOLD AND PRECIOUS METALS — Pacific Rim and Barrick continue drilling at Diablillos

Three of six holes put down by Pacific Rim Mining (PFG-T) near the margin of the Oculto deposit, on the Diablillos property in northwestern Argentina, have intersected narrow zones of mineralization.

The project is joint ventured to operator Barrick Gold (ABX-T), which stands to earn a 70% interest.

The Diablillos project covers roughly 3,600 ha of moderate relief in an area of widespread hydrothermal alteration. The Oculto deposit is the most advanced of four known gold-bearing zones on the property. It represents a sub-horizontal, oxidized, high-sulphidation epithermal gold-silver system.

The six new drill holes were collared along the northeastern extension of the Oculto deposit.

Of the mineralization recovered, hole RC-129 hit 18 metres grading 0.03 gram gold and 36.4 grams silver per tonne starting at a depth of 130 metres; hole RC-130 intersected 29 metres averaging 0.8 gram gold and 21.9 grams silver starting at a depth of 267 metres, including a 5-metre interval grading 2.22 grams gold and 52.6 grams silver, starting at a depth of 291 metres; and hole RC-131 hit a 5-metre interval grading 0.48 gram gold and 15.8 grams silver starting at a depth of 163 metres, and a 5-metre interval grading 1.54 grams gold and 30.7 grams silver starting at a depth of 250 metres.

The above three holes were located along strike from previously drilled hole RC-127, which intersected 138 metres averaging 1.41 grams gold and 17.8 grams silver. Drilling results indicate that the mineralization tends to thin out along strike to the northeast from hole RC-127, the company notes in a release.

The most recent estimate, completed last July, pegged resources at the Oculto deposit at 26 million tonnes averaging 109 grams silver and 0.34 gram gold, using a cutoff of 0.35 gram gold-equivalent. The estimate was based on 79 reverse-circulation (RC) holes and 17 diamond drill holes.

Pacific Rim intends to release a new resource calculation by the end of the summer, and notes that drilling has increased the strike length of the deposit by 40% since the original estimate was released.

Preliminary metallurgical testing suggests that the mineralization is amenable to standard cyanide heap-leach processing techniques. Cyanide leach bottle-roll tests showed a median recovery of 88% for gold and 83% for silver. Further metallurgical test work, designed by Barrick, is currently under way.

Barrick will initiate the second half of the drill program by the third week in May, using two RC drills. About 4,000 metres of drilling has been planned to complete the 100-metre delineation program on the northeastern extension of the Oculto deposit. The major must spend US$10.5 million on exploration and come to a production decision by July 2000. If a production decision has not been made at that time, Barrick must spend US$4 million per year thereafter until a decision is reached.

In other news, Pacific Rim finalized its agreement with Corriente Resources (CTG-T) to acquire 100% of the Fantasma and Nunez Cateo claims in Argentina’s Salta province. Both claim groups lie just southwest of the Diablillos property.

According to the terms of the agreement, Pacific Rim must issue Corriente a maximum of 400,000 shares; 100,000 have been issued so far.

The two properties together cover an area of about 6,600 ha over a portion of the same fault block that hosts the Oculto deposit. On the Fantasma property, most of this block is covered with wind-blown sand, however, Pacific Rim says that a northeasterly striking fault zone that controls the Oculto deposit can be traced onto the Fantasma property. The company plans to drill-test this fault zone where it intersects a major north-south fault zone.

At the 100%-owned Cerro Blanco project, a gold-silver-copper target adjacent to Diablillos, Pacific Rim drilled 2,100 metres in eight holes last year.

Only sub-economic gold grades were encountered. Future work on the property will focus on the evaluation of the potential for porphyry copper-gold and epithermal gold-silver mineralization.

Pacific Rim also holds the La Colarada property in Argentina, a sedimentary-exhalative massive sulphide lead-zinc-silver-copper prospect.

The company intends to advance the project, with the goal of a joint-venture arrangement with a major base metal producer.

Meanwhile, Pacific Rim has announced the termination of its exploration activities at the Leticia gold project in Mexico’s Guerrero state. The project was a joint venture with Miranda Industries (MAD-V) in which Pacific Rim stood to earn a 51% interest by delivering a positive feasibility study.

“Although our drilling did encounter some mineralization, the continuity and potential size are not sufficient to warrant additional work by Pacific Rim Mining,” says Chief Executive Officer Thomas Shrake.

Pacific Rim has $10 million in cash and 25 million shares fully diluted.