Jiawula drilling off to good start for Naneco

Drilling at the Jiawula polymetallic deposit in the Inner Mongolia region of China continues to confirm mineralization in the advanced No. 2 vein.

Junior Naneco Minerals (NNE-A) is targeting the zone in hopes of advancing the project to production. If successful, the company will receive 75% of project revenues until payback is achieved and 70% thereafter (T.N.M., April 20-26/98).

Results from holes 4 to 6 include:

* 10 metres of 260 grams silver per tonne, 1.05% copper, 2.22% lead and 17.36% zinc;

* 7.4 metres of 160.52 grams silver, 0.52% copper, 7.6% lead and 11.56% zinc; and

* 3.8 metres of 240.2 grams silver, 1.07% copper, 4.26% lead and 17.81% zinc.

Similar results were obtained in holes 1 to 3 — the first three holes of the 5,000-to-15,000-metre program.

Geological resources at Jiawula were estimated by the Shenyang Non-ferrous Metallurgical Design and Research Institute at 7.3 million tonnes grading 124 grams silver, 5.2% zinc, 3.3% lead and 0.38% copper. Within that resource are reserves estimated at 5.17 million tonnes grading 141 grams silver, 5.7% zinc, 3.9% lead and 0.46% copper.

The research firm deemed the project economical at a production rate of 800 tonnes per day, which would require an up-front investment of US$24 million. As part of its effort, Naneco has hired consulting firm Watts Griffis & McOuat to verify this conclusion. Resources were previously pegged at 2.8 million tonnes grading 114 grams silver, 0.3% copper, 3% lead and 4.8% zinc.