LATIN AMERICAN SPECIAL — Bolivia’s mineral wealth attracts companies

Bolivia has long been known for its mineral wealth, and, in recent years, the country’s relative political stability has resulted in an influx of junior exploration and development companies.

The country is believed to have been the principal source of gold for the Inca civilization and, during Spanish colonial times, was the world’s largest producer of silver.

Bolivia won its independence from Spain in 1825 and has been a democratic republic since 1952. Nationalization of mines in 1952, as well as in the 1970s and early 1980s, had the effect of stalling exploration and development in the country. The political environment subsequently improved, and stability has, on the whole, increased since 1985.

Aside from the country’s mineral potential, reforms to mining codes and taxes have attracted exploration companies to the country. These reforms include a maximum tax on profits of 30%, unrestricted import of mining equipment, the elimination of restrictions on capital and profit repatriation, as well as free exchangeability of the Bolivian currency with the U.S. dollar.

What follows is a survey of projects in the exploration and development stages:

* The mineral potential of Bolivia proved irresistable to Da Capo Resources (VSE), which has been concentrating on the Capa Circa and Amayapampa properties in the central Altiplano region. The two properties are about 10 km apart, and Da Capo is looking at the feasibility of developing a mill to process material from potentially open-pit deposits at Capa Circa and Amayapampa.

The geological resources at Capa Circa and Amayapampa are estimated at 32.2 million tonnes grading 1.17 grams gold per tonne and 4.1 million tonnes grading 3.3 grams gold, respectively.

Da Capo recently expanded its property holdings in Bolivia through the acquisition of a 49% interest in the San Gerardo property from the party which optioned the project to Teck (TSE). The latter can earn a 51% interest by completing a feasibility study, and work to date has outlined several gold targets.

Asiento is explored

* Silver Standard Resources (TSE), which focuses strictly on silver, acquired an option on the Asiento silver-gold property last year from Bolivia’s state-owned mining company, Comibol. The property is 140 km west of the city of Potosi.

Silver Standard can earn a 100% interest by spending US$5 million and placing the property into production. Comibol retains a 7% royalty on operating profit during the capital payback period, increasing to 27.5% after capital recovery.

The property hosts a large, hydrothermal, silver-gold system measuring roughly 800 by 2,400 metres, and the company sees good potential in outlining a bulk-tonnage, open-pit deposit.

Exploration plans for 1996 include geochemical and geophysical programs, to be followed by trenching and up to 20,000 metres of reverse-circulation and diamond drilling.

* Pan American Silver (TSE), which is managed by the same group as Da Capo, also holds promising projects in Bolivia. The company recently started a $350,000 exploration program at its 50%-owned Maragua project, where it holds an option to buy the remaining half interest.

Maragua hosts high-grade silver veins, along with a large-tonnage target, and plans call for an initial 2,000 metres of drilling.

Pan American recently dropped its option on the Carangas project after completing trenching and 1,000 metres of drilling.

Corriente’s Laurani

* About 100 km south of La Paz, Corriente Resources (VSE) is drill-testing the bulk-tonnage potential of the 4,000-hectare Laurani property. The program is designed to test a large alteration zone which surrounds a high-grade vein zone estimated to contain 2 million tonnes grading 220 grams silver, 2.5 grams gold and 1% copper.

* Roughly 500 km south of La Paz lies the Ubina gold project. Takla Star Resources (ASE) recently optioned a half interest in its Ubina gold project to Inmet Mining (TSE). Inmet also holds the right to boost its interest to 60%.

The property covers a north-south-oriented, gently folded sequence of hydrothermally altered, calcareous sediments measuring 1,900 by 600 metres. Sampling of a calcareous sandstone unit within the sediments has returned values of up to 0.22 oz. gold.

* Jordex Resources (TSE) holds a large ground position along eastern Bolivia’s Precambrian shield, along with Barrick Gold (TSE), which is earning up to a 75% interest. Barrick recently dropped its option on one of the properties — Paula Cecilia — after drilling four holes that returned values of up to 11.7 grams over 8.1 metres.

Jordex plans to continue work on Paula Cecilia under its original option with a private Bolivian company; in doing so, it will earn a 65% interest.

* Jordex holds a 100% interest in the Rancho Orkho zinc-silver prospect in southwestern Bolivia. Sampling of old underground workings have returned values ranging up to 750 grams silver, while another showing, 3 km away, returned values of up to 13% zinc. Additional work is planned, including diamond drilling.

Orvana’s Pederson

* Drilling on the Pederson project, 150 km southeast of Oruro, is expanding a previously announced, drill-indicated resource of 19 million tonnes grading 1.8 grams gold for Orvana Minerals (TSE). Results include a 171-metre intersection grading 1.2 grams gold and a 62.1 metre intersection grading 1.36 grams. Additional drilling will test the northern strike extension of the deposit.

* Drilling is also under way on the company’s Don Mario project, which hosts two known deposits. The deposits consist of a potentially open-pit resource of more than 4 million tonnes grading 2% copper and 2 grams gold, overlying a higher-grade, underground resource of 1 million tonnes grading in the order of 13 grams gold. Drilling will attempt to define the higher-grade underground resource.

* Trenching and auger drilling on the Miguela concession have outlined a preliminary resource of 635,000 tonnes grading 11.7 grams gold to a vertical depth of 25 metres.

Essex Resource (VSE) will carry out diamond drilling in May so as to test the resource at depth.

* Essex is also planning work on its Marlene concession, including geophysics and drilling to test a large gossan. Work on the company’s three other concessions in Bolivia will include stream and soil sampling.

Samex tests Yaretani

* Samex Mining (VSE) is testing its Yaretani gold-antimony project in southeastern Bolivia in an attempt to outline a sediment-hosted deposit. Sampling on the Salamanca zone returned an average of 1.7 grams gold associated with disseminated pyrite in a shale and siltite unit.

The Salamanca zone measures 30-100 metres wide and has been traced for 3 km.

Five holes have been drilled on the zone in a preliminary program, with the first hole returning a 10.3-metre interval grading 0.68 grams gold. Assay results from the other four holes are pending.

* Eaglecrest Explorations (VSE) is exploring its San Simon project, where assay results are awaited from trenching and drilling. Previous sampling on various areas on the property returned values ranging from 0.46 gram gold over a 5-metre channel sample, to 12.91 grams on a single sample.

Drilling is testing the Paititi pit area, where local miners are reportedly recovering 30-40 grams gold per day from alluvial washings.

* Alberta-listed Odessa Mining expects to start up an alluvial gold plant in May at its Mayaya property. The company hopes to process 60,000 cu. metres of material per month at an estimated minimum grade of 0.5 gram gold per cu. metre and an estimated monthly production cost of US$150,000.

Operating profits from the alluvial operation will be used to fund exploration work on Odessa’s hard-rock property holdings in Bolivia.