Vancouver — The giant Boka gold deposit in southern China has grabbed the attention of investors, who, despite the absence of drill results, have rewarded property operator
Shares in the junior traded in the $2.50 range for most of the past year, but late in 2002, high gold values from the Boka project lifted the shares to a high of $19.20; they have since settled at around $15.
Driving the share price are Boka’s size potential and geological similarity to other major gold deposits, such as Muruntau, in the Kyzyl Kum Desert of Uzbekistan, which contains an estimated 140 million oz.
Southwestern acquired the property, situated in Yunnan province, in September 2002 after completing stream-sediment and chip sampling over 800 sq. km. The program outlined a 15-km anomaly in the drainage containing the Boka 1 through 7 gold zones. In the previous year, artisanal miners, attracted to the stratabound mineralized horizon, dug more than 130 tunnels into the mountainside. But is was subsequent exploration by Southwestern that led to the discovery of four more gold zones, all of which occur in a 25-km-long structure and are confined to a specific stratigraphic horizon.
Most promising is the Boka 1 zone, where two sets of tunnels, dubbed North and South, have been excavated along a gold zone extending for 1.4 km along strike and exposed vertically for 150 metres along a west-facing slope. Tunneling, which varies from 20 to 200 metres in length, has shown that the gold mineralization continues downdip for at least 200 metres and is open in all directions.
Southwestern’s initial task was to sample the tunnels, and the project first caught the eye of investors when the junior reported values of up to 75.2 grams gold per tonne over 34.5 metres.
To date, 134 tunnels have been surveyed, and the latest tunnel assay results from Boka 1 North and South continue to indicate potential for a major find. The tunnels sampled are at right angles to the long axis of the stratabound gold zone. Highlights include the following:
r Tunnel PD-57 returned a 15-metre chip sample that averaged 38.5 grams gold and 9.7 grams silver.
r Chip sampling in tunnel MTC-02 ranged from 0.3 gram gold and 0.3 gram silver over 7 metres to 9.5 grams gold and 0.8 gram silver over 2 metres.
r Sampling in tunnel PD-71 ranged from 0.03 gram gold and 0.1 gram silver over 2 metres to 23.8 grams gold and 4.1 grams silver over 2 metres. The longest sample in this tunnel measured 4 metres and averaged 11 grams gold and 1 gram silver.
r Sampling in tunnel MG-01 ranged from 1.1 grams gold and 0.8 gram silver over 2 metres to 190.5 grams gold and 71.1 grams silver over 2 metres.
r Assays in tunnel XG-13-B ranged from 0.04 gram gold and 0.2 gram silver over 2 metres to 18.7 grams gold and 9.4 grams silver over 2 metres.
r The best samples in tunnel PD-2 averaged 22.4 grams gold and 4.4 grams silver over 2.3 metres and 16.4 grams gold and 2.4 grams silver over 3 metres.
r Assays in tunnel PD-3 ranged from 0.1 gram gold and 0.2 gram silver over 3 metres to 24.9 grams gold and 2.3 grams silver over 2 metres.
Tunnel surveying and sampling are still under way 100 metres south of Boka 1 South, though assays from this area have yet to be reported.
Overall, channel samples taken along the walls of the tunnels range from a low of 0.2 gram gold to an impressive 605 grams.
The mineralized horizon trends north-south and dips from 5 to 50 toward the east.
Tonnage potential
The potential for a huge open-pit mine was indicated by recent reconnaissance work that led Southwestern to a new area of tunneling, 1.2 km northwest of the Boka 1 zone. This area is known as Boka 11, and according to Southwestern, it has a geological setting similar to that of Boka 1. In addition, soil sampling shows a continuous gold geochemical anomaly between the Boka 1 and 11 tunnels. The Boka 11 area, with a strike length of about 1 km, may mark the westward faulted extension of the Boka 1 zone. Further driving the prospects of a sizable find is the discovery of the Boka 8 zone, some 3 km east of Boka 1.
Gold mineralization is hosted by Middle Proterozoic carbonaceous shales and calcareous siltstones. The favourable stratigraphy was subsequently subjected to thrust-faulting, resulting in a ductile-brittle shear zone occurring in the horizon. Gabbros then intruded the regional package of sedimentary rocks. The target horizon is characterized by extensive multi-phase breccia and shearing, accompanied by quartz-carbonate and sulphide replacement. The zone is exposed along the western face of a north-trending ridge and is parallel to regional north-south rift structures. The gold grades, as well as the structural complexity of the Boka system (which may create continuity problems, owing to post mineral faulting and folding), will only be determined by extensive drilling.
Southwestern has elected to assay all Boka samples, including drill core samples, by screen fire assaying, and although no metallurgical work has been reported, electron microscope work suggests that 90% of the gold is in the form of electrum.
Drilling
A 5,000-metre drill program is under way and assay results are expected in early February.
In mid-January, the first hole into the Boka 1 target intersected 220 metres of the favourable stratigraphy at a down-hole depth of 31-251 metres.
The second hole, drilled 226 metres to the north, hit the target horizon at 170 metres and was terminated in mineralization at 270 metres, owing to recovery problems.
A new zone of mineralization above the Main zone has been discovered, at 97.8-128.4 metres. Both native gold and electrum have been identified in the core from this zone, which is characterized by abundant brecciation and limonite-sulphide mineralization. The hole has been re-collared at the same site and will be drilled to a depth of 500 metres.
Meanwhile, a second rig is drilling hole 3, to the south, from the same collar as hole 1, and a third rig is expected to start turning by February.
Southwestern is earning a 90% interest in 171.3 sq. km under application from China Yunnan Province Nuclear Industry Team 209 in return for spending US$4 million over four years and paying US$1.7 million in cash and shares in the fourth year.
The junior also holds exploration ground in Peru and Argentina, as well as a 34% stake in
It holds 16% and 5.7% interests, respectively, in
At Nov. 30, 2002, Southwestern Resources had $5 million in cash and 16.4 million shares outstanding (19.2 million shares fully diluted).
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