LATIN AMERICA — Homestake budgets US$13m for Veladero

With the South American spring approaching, melting snow will make way for drill rigs at the Veladero gold-silver project, high in the Andes in west-central Argentina.

The 11,500-ha property has received little exploration since Homestake Mining (HM-N) gained control of it following its takeover of Argentina Gold last April.

The work performed by Argentina Gold was of the highest quality, says Homestake Chairman Jack Thompson. “But now we have to take a look and see what we’ve got.”

Thompson says the property could become a mainstay for Homestake’s future, and the company has budgeted US$13 million for exploration this season. Plans call for a combination of reverse-circulation and core drilling to test known areas of mineralization and evaluate new zones.

Homestake does not intend this initial work to result in a reserve calculation, though the results will determine the direction of future work.

Veladero contains a resource of 5.8 million oz. gold and 72 million oz. silver within 73.2 million tonnes averaging 2.5 grams gold and 30.7 grams silver per tonne. The deposit is divided into three principal targets: Amable, Filo Federico and NW. Previous results suggest that the NW zone could be an extension of Filo Federico.

Mineralization, associated with an intrusive complex of coalescing diatremes and domes, is hosted in highly fractured and silicified volcanics in sub-horizontal, tabular bodies.

Homestake holds a 60% interest in the project, with the remainder held by Barrick Gold (abx-n).

Homestake plans also to spend US$2 million drilling targets south and east of Veladero.

The Veladero property is in the southern portion of the gold belt known as El Indio, straddling the border between Chile and Argentina.

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