Homestake gains ground in Argentina

Homestake Mining (HM-N) has agreed to purchase all exploration properties in southern Argentina that are held by Australian-based Western Mining Corp. (WMC).

The company will pick up 900,000 acres in Rio Negro, Chubut and Santa Cruz provinces in return for spending US$1 million on exploration over three years.

Included in the acquisition are 380,000 acres in the Deseado massif region, where high-grade silver-gold discoveries have been reported by several junior companies. These include: Yamana Resources (YRI-T), which is exploring the Lejano and Bacon prospects; Minera Andes (MAI-A), which is active on the Cerro Saavedra discovery; and Newcrest and M.I.M. Holdings, which are jointly evaluating the Cerro Negro property.

Homestake plans to carry out soil sampling and mapping on its new properties, which have received little exploration to date.

The acquisition is the company’s first in this region of Argentina, though not the first in the country. Homestake holds land across the border from its Agua de la Falda deposit in Chile.

Homestake has budgeted US$58 million on exploration in 1998, half of which is earmarked for North America and 30% for Australia.

In northwestern Nevada, the major has reported early success from a US$6-million drilling program at its Pinson gold mine, ownership of which is split equally with Barrick Gold (ABX-N). Two holes along the Range Front structural zone encountered high-grade sulphide gold mineralization, and follow-up drilling is under way.

Meanwhile, at the Mad-Bomboly project in eastern Hungary, Homestake is drill-testing several epithermal gold targets along a 2-mile trend.

Farther south, in Bulgaria, the company has paid US$4 million for a 32% interest in gold properties held by Navan Resources. Homestake is operator and can increase its interest to 50% by paying an additional US$4 million by 2002.

At the same time, the company has dropped its interest in the Chelopech gold-copper mine, another joint venture with Navan in Bulgaria. As a result, Homestake received back US$11 million of its investment in that project.

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