Greenstone acquires Nicaraguan mine

The newly acquired La Libertad gold mine in Nicaragua, a 150-ton-per-day project 78 miles east of Managua, was the focus of attention at the recent annual meeting of Greenstone Resources (TSE) in Toronto.

Taking advantage of Nicaragua’s privatization policy, Greenstone edged out three other bidders and now has the right to a 37.5% interest in the property. Greenstone’s partner in the transaction is Nica Mines, a Nicaraguan company, which also has the right to a 37.5% interest. (The largest shareholder in Nica Mines is the president of Banco Mercantil, the country’s largest private bank.) The remaining 25% of La Libertad is to be held by a company representing the mine workers.

Consummation of the transfer from government ownership involves US$500,000 cash on signature and a commitment to spend US$4.5 million on the property. “Final details are just about completed,” says Bruce Winfield, Greenstone vice-president.

The property hosts a network of narrow gold veins and stockworks over a 9-mile strike distance. Mining has been carried out there on a small scale since the turn of the century and the work involves the extraction of higher-grade vein ore by underground methods.

The potential for open-pit bulk mining was tested in 1986 by the Swedish International Development Agency. Proven and probable reserves of 4.6 million tons grading 0.14 oz. gold per ton were delineated by 65,000 ft. of drilling. These reserves are within 130 ft. of surface and represent the lowergrade, disseminate mineraliz- ation associated with the vein system. An overall primary reserve estimate is quoted at 9.7 million tons grading 0.12 oz. Feasibility work is now under way, says Winfield. Mill capacity is expected to be expanded in stages to 500-ton-per-day. Lower-grade ore is designated for a 2,200-ton-per-day heap-leach facility.