Greenstone gears up for gold pour

With construction of the first two heap-leach cells now complete at the Cerro Mojon gold mine in Nicaragua, Greenstone Resources (GRT-T) has begun piling ore and expects the first gold pour to take place later this month.

By year-end, the open-pit operation is expected to have yielded 54,000 oz.

of the yellow metal. Owing to an unusually long rainy season which set construction back two months, this projection is less than the 90,000 oz.

outlined in a 1995 feasibility study. The company expects to heap-leach 1.3 million tonnes grading 2 grams gold per tonne this year — 200,000 fewer tonnes than were called for in the original study. Nonetheless, cash operating costs for the year remain unchanged at $142 per oz., and capital costs amounted to $15.7 million, as expected.

With production now commencing, the company is forging ahead with a second phase of expansion (to be completed in the third quarter), which will see annual production increased to 135,000 oz. from 2.25 million tonnes of ore.

Capital costs for the second phase will add another $4.9 million to the total capital costs.

Greenstone came to the expansion decision after a 1986 drill program increased the deposit’s strike length by 800 metres to 1.8 km, and its vertical extent by 60 metres to 160 metres. As a result of this work, the geological reserve was doubled from what was used in the 1995 feasibility study to 1.8 million oz. gold. These ounces are contained in geological reserves (in all categories) of 38 million tonnes grading 1.42 grams gold. Of this total, 23.8 million tonnes grading 2 grams gold are in the proven and probable category.

With the recent drilling success at the Zopilote zone, Greenstone has begun planning a third phase of expansion, which would increase production to 180,000 oz. gold from 3 million tonnes of ore. To allow for the increase, the Zopilote zone would be incorporated into the open pit, with the current design of a 2-km-long pit increased to 2.5 km. Preliminary capital costs for additional mining equipment necessary for this phase are estimated at less than $5 million, thus bringing total capital costs to $25.6 million.

Construction for this phase is expected to begin in 1998.

The Zopilote zone lies northeast, and along strike, of the Cerro Mojon deposit. Drilling earlier this year returned the widest intersection yet obtained in that area. In hole 7, a near-surface, 203-metre intersection returned 1.75 grams gold over the entire length. Four other holes drilled along the Zopilote structure also intersected mineralization near the surface. Of these, the highest grade recovered was 3.77 grams gold over 21.3 metres (from 39.6 to 60.9 metres).

The Cerro Mojon deposit lies in the Cerro Mojon corridor, a 15-km-long structure of continuous mineralization along which more than 30 mineralized en echelon vein targets have been identified. The corridor is centred on one of these targets, Cerro Chamarro, which Greenstone geologists believe may have served as a conduit for the mineralizing fluids that have been deposited along the structural corridor. At the Cerro Mojon deposit, mineralization is associated with multiple mineralized zones along structurally controlled and overlapping quartz-filled shears.