LATIN AMERICA — Gold rush to Kilometre 88 district

An exploration boom in Venezuela’s Kilometre 88 district is expected to take on steam now that a growing number of companies have acquired concessions in the area.

In late December, Mt. Grant Mines (VSE) announced an exclusive option by a Venezuelan company to negotiate joint venture participation in one of the largest gold and mining concession areas in the Kilometre 88 district. The announcement came on the heels of the recent acquisition of 100% of a Venezuelan company that owns exploration and/or exploitation rights to certain gold and diamond mining concessions in the Kilometre 88 area. These include a 100% interest in the Tapaya and Libertad concessions, and a 82% interest in the Unin concession.

The Kilometre 88 district came to prominence as a result of a major gold discovery by Placer Dome (TSE) which mining analysts speculate has multi-million-ounce potential (T.N.M. Dec. 21/92). The deposit is found within a highly prospective mineralized belt, which geologists compare favorably to those hosting major gold deposits in Eastern Canada and Africa. Mt. Grant has been investigating opportunities in the country for some time, and hopes to finalize a definitive joint venture for its new larger concession. In the meantime, the company entered into an agreement with Queenstake Resources (TSE) to form a 50-50 joint venture to explore and exploit the hardrock rights to the Bizkaitarra concession, south of the Tapaya and Libertad concessions.

Queenstake recently signed an agreement with the mineral concession owner to extend its mining rights from alluvial mining to alluvial plus hardrock mining rights. As might be expected, the company now reports that hardrock mining activity will take precedence over alluvial mining.

Queenstake will contribute its interest in the hardrock rights to the concession, and Mt. Grant will provide the monies for exploration and provide a feasibility study. Mt. Grant will have the right to increase its interest to 65% by arranging project financing.

The list of juniors taking on projects includes Murray Pezim’s Eurus Resource (VSE), which announced plans to acquire a 50% interest in the Albino Concession from Crystallex International (VSE). The concession allows alluvial mining and treatment of tailings on the property.

Other Pezim-controlled juniors negotiating to acquire concessions include Pacific Century Explorations (VSE) and Double Down Resources (VSE). Vancouver-based Equity Reserve (TSE) recently agreed to buy one million units of Gold Reserve (NASDAQ), which is focussing its attention on developing diamond and gold mining properties in Venezuela. The junior also owns a gold concession (near Las Cristinas) in the Kilometre 88 district where more than 1.3 million oz. gold has been extracted in the past 10 years using primitive methods.