LATIN AMERICA — Teck readies Lachatao project for drilling

The Mexican subsidiary of Teck (TEK-T) is carrying out geological mapping and sampling on the northern half of the Lachatao property in Oaxaca, in preparation for the next phase of drilling.

Teck can earn up to a 70% interest in the property from Grupo Northair de Mexico, a wholly owned subsidiary of International Northair Mines (INM-V).

The 8-by-8-km concession is 35 km northeast of the the southeastern state’s namesake capital. The gold district in which it lies has been partially mined since pre-colonial times.

After acquiring the property in the autumn of 1995, Northair carried out reconnaissance mapping and sampling in the northern half. Many of the gold targets identified are in areas marked by historic underground workings.

In May 1996, Northair entered into an option agreement with Teck’s Mexican subsidiary. Teck can earn an initial 51% interest by spending US$750,000 on exploration and paying US$275,000. The major can increase its interest to 60% by spending an additional US$1 million on exploration and paying a further US$100,000. If Teck elects to fund the project through to the feasibility stage and arrange all production financing, it can boost its interest to 70%.

Teck began by concentrating its efforts on the San Pedro-San Pablo vein-stockwork system, where previous drilling by Cansejo de Recursos Minerales intersected strongly anomalous to potentially ore-grade mineralization.

The comapny’s 1996 program consisted of a series of hand-dug trenches and nine reverse-circulation drill holes totalling 1,200 metres, the total cost of which was US$333,000.

Highlights of that program included:

* 44 metres averaging 1.18 grams gold and 9.33 grams silver per tonne; * 30 metres averaging 1.59 grams gold and 14 grams silver (including 14 metres of 2.4 grams gold and 18.3 grams silver); and

* 37 metres averaging 1.09 grams gold and 5.19 grams silver.

Teck’s objective in the first phase of drilling was to confirm Cansejo’s previous drill results. The 1996 program tested the San Pedro-San Pablo system over a strike length of more than 400 metres. Several of the holes returned wide intercepts of low-grade gold mineralization, with six holes bottoming in mineralization.

Significant results included:

* 49.5 metres averaging 0.51 gram gold and 6.69 grams silver from a depth of 17 to 66.5 metres, plus 3 metres grading 7.84 grams gold and 8.3 grams silver from 80 to 83 metres, in hole 2;

* 85.5 metres averaging 0.97 gram gold and 5.59 grams silver (including 15 metres grading 2.14 grams gold and 12.1 grams silver) between a depth of 5 and 90.5 metres in hole 3;

* 96 metres averaging 0.62 gram gold and 3.4 grams silver at a depth of 65 to 161 metres in hole 4; and

* 22.5 metres of 0.4 gram gold and 4.64 grams silver from a depth of 34.5 to 57 metres, plus 33 metres averaging 0.92 gram gold and 2.83 grams silver (including 1.5 metres of 10 grams gold and 20 grams silver) at 78 to 111 metres, in hole 9.

The San Pedro-San Pablo system occurs along a west-to-northwest-trending fault zone, and is underlain by a series of shallow-dipping, northwest-trending volcanics and volcaniclastics. Gold mineralization is associated with epithermal quartz veins and stockwork hosted in an argillic and siliceous porphyritic dacite sequence.

Bulk-tonnage target

Geological mapping and sampling continued to evaluate the San Pedro-San Pablo bulk-tonnage target in 1997. Trenching in the Veta Nueva area, about 250 metres north-northeast of San Pedro-San Pablo, returned 113 metres averaging 0.38 gram and 2.99 grams silver, including 16 metres of 5.69 grams gold and 15.3 grams silver. Within the 16-metre portion, a 2-metre section averaged 34.2 grams gold.

Additional trench results included 16 metres averaging 1.4 grams gold.

Together, the San Pedro-San Pablo and Veta Nueva areas were found to form an anomaly 450 by 450 metres in size averaging plus-100 parts per billion (ppb) gold. More than 35% of the samples from within this area returned values of more than 500 ppb gold, with many greater than 1 gram.

Extending from San Pedro-San Pablo to the northwest are two other 100-ppb anomalies. The western anomaly measures 500 metres long and 75 metres wide, with values ranging up to 9.54 grams gold. The eastern anomaly is up to 200 metres wide and contains samples from altered andesite tuffs, with values ranging from 530 to 950 ppb.

A wide, northeast-trending anomalous zone extends from Veta Nueva toward the Riflero prospect. Chip samples from the zone ranged up to 1.42 grams gold.

At the Colorada prospect, sampling outlined an anomalous zone 220 by 320 metres in size, with half of the samples yielding assays of greater than 500 ppb. Trench results included 38 metres of 0.93 gram, 8 metres of 1.16 grams and 10 metres of 1.2 grams gold. An area of stockwork and breccia southeast of La Colorada returned 6 metres of 2.18 grams and 8 metres of 2.06 grams gold. Several new areas northeast of La Colorada yielded values ranging from 0.72 to 2.06 grams gold.

Teck has begun mapping and sampling in the northeastern part of the property, including follow-up work on a road outcrop that yielded 9.76 grams gold. An area 500 metres west of the outcrop returned sample results ranging from 1.09 to 3.58 grams gold

Teck intends to begin the next phase of drilling in November.