LATIN AMERICA — Exploration by Minefinders expands potential of Chabacan Main zone — Recent drill programs have extended preliminary resource estimate

Although previous exploration of the East zone in the Chabacan target area produced mixed results for Minefinders (MFL-V), recent drilling on the Mexican property has extended the Chabacan Main zone farther to the south.

he Chabacan, along with the Norte and Hondo targets, comprises a 4-km-long gold-silver trend of mineralization on the Dolores property in the northern Mexican state of Chihuahua.

The trend occurs in a complex sequence of propylitically altered andesites cut by a series of north-northwest-Trending latite dykes overlain by weakly argillized tuffs. This older sequence is exposed in a dome, or horst-like window, through younger, unaltered volcanics.

Gold-silver mineralization is associated with intensely silicified, brecciated and stockwork-Veined latite dykes in contact with the andesitic volcanic rocks.

Previous drilling on the Chabacan Main zone encountered significant mineralization in a 500-metre section of the zone to depths exceeding 150 metres. Based on preliminary resource estimates, the 500-metre section contains 4.5 million tonnes grading 1.78 grams gold per tonne.

Initial metallurgical testwork indicates the rock is amenable to heap-leach recovery.

Minefinders recently reported results from holes 43 and 45, which were drilled 100 metres south of the southernmost holes on the Chabacan Main zone.

The holes were drilled from the same site at angles of minus 45 and minus 70.

Hole 43 intersected 60 metres averaging 2.71 grams gold (including 30.3 metres averaging 5.01 grams gold).

Significant values

Hole 45 pulled a 50.8-metre interval averaging 1.03 grams gold and 102.7 grams silver (including 15 metres of 2.91 grams gold and 248.26 grams silver), plus a 46.2-metre interval averaging 2.09 grams gold and 39.53 grams silver (including 12 metres of 4.56 grams gold and 105.5 grams silver).

A further 100 metres to the south, hole 38 intersected 46 metres averaging 0.82 gram gold, with an 8-metre interval averaging 3.77 grams gold and 64.42 grams silver.

Minefinders says these holes have significantly expanded the preliminary resource estimate.

Meanwhile, drilling on the East zone encountered widespread, low-grade mineralization. The best hole, 44, returned a 33.2-metre interval averaging 0.79 gram gold and 128.57 grams silver.

For the next several months, three drill rigs will systematically test 1,500 metres of strike length south of Chabacan in the Hondo target area.

Minefinders is exploring the wholly owned Dolores property as part of an arrangement with Echo Bay Mines (ECO-T), pursuant to which Echo Bay can acquire a 60% interest in the project.

The current drilling program is expected to be completed by June, at which time Echo Bay can elect to become operator and complete a bankable feasibility study within two years.

Upon completion of the study, Echo Bay can buy 60% of the proven and probable production reserve at a price of US$20 per oz. gold-equivalent, subject to a minimum US$12-million price tag.