Stepout drilling at the El Penon gold-silver project in northern Chile has more than doubled the strike length of the Quebrada Colorado gold-silver zone.
Owner Meridian Gold (MNG-T) recently received results from 41 holes that were drilled to test for strike extensions to the high-grade zone. This brings to 65 the number of holes that have tested the zone since it was discovered in May.
Six holes drilled south of previously drilled hole PP235 extended the zone 180 metres in that direction. True widths varied from 2.1 to 6 metres, with gold values averaging between 10.3 and 64.5 grams per tonne, plus between 146 and 1,054 grams silver.
Of the six holes drilled, hole 253 returned the widest interval: 6 metres (from 158 to 168 metres down-hole) grading 10.3 grams gold and 146 grams silver. Hole 245 returned the highest grade: 2.8 metres (from 170 to 174 metres) averaging 64.5 grams gold and 487 grams silver.
North of hole 233, which was previously the northernmost drilled, eight holes extended mineralization 400 metres to the Discovery Wash zone. Results were similar to those encountered in the six southern holes, with the highest grade encountered in hole 258: 44.3 grams gold and 1,472 grams silver over 3.8 metres of true width.
Results from two of the newer holes show that a fault encountered in previously drilled holes 231-233 has not offset the host stratigraphy. Holes 243 and 273 were collared 50 metres higher in elevation than the previous holes and returned, respectively, 5.5 metres (true width) averaging 18.8 grams gold and 228 grams silver, and 3 metres (true width) averaging 19.1 grams gold and 305 grams silver.
In addition to stepout drilling, three core holes were drilled to confirm results from reverse-circulation drilling (the predominant technique used) in the main shoot. Although results are comparable (and similar to the stepout holes), one of the three core holes intersected a narrow zone of low-grade mineralization between the main and southern shoots.
The Quebrada Colorada zone is now known to extend for 1.1 km in length and to be at least 100 metres in vertical extent. Mineralization, which occurs in three distinct shoots, strikes north-south, dips steeply to the west and remains open in all three directions.
Andesitic rocks host the main and northern shoots, whereas rhyolites host the southern shoot. Mineralization is oxidized in both rock types.
As drilling continues, Meridian plans to drive a drift from the existing decline at the Quebrada Orito deposit, situated 1 km to the west, to Quebrada Colorada. The drift is expected to be completed within six months, after which time underground development and drilling will begin.
Quebrada Orito hosts underground reserves of 4.3 million tonnes averaging 7 grams gold and 102 grams silver, plus open-pit reserves of 1.6 million tonnes grading 3.5 grams gold and 74 grams silver. A study completed earlier this year concluded that a combined open-pit/underground operation is feasible at a daily production rate of 2000 tonnes.
A gold price of US$300 per oz. and a silver price of US$5 per oz. were used in the study. Though yearly production is projected at 130,000 oz. gold, Meridian is confident this can be doubled with the inclusion of Quebrada Colorada.
Commercial production is slated to begin in the first quarter of 2000.
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