Metallurgical tests at Mt. Kare make the grade

Preliminary flotation tests on samples from the Mt. Kare deposit in Papua New Guinea have produced excellent recoveries, reports Madison Enterprises (MNP-V).

The tests, performed on three of nine representative samples, showed an average gold recovery of 90% and an average silver recovery of 75%, and Madison expects the results will improve even further after chemical reagents are added.

Pressure-oxidation tests followed by cyanidation tests were performed on two samples that had high sulphide content. Average gold recoveries of 95% were obtained at a 90% sulphide oxidation level, while silver recoveries are still pending. Modifications to the autoclave are expected to increase sulphide oxidation and gold recovery.

The tests were performed on a contract basis by a division of Placer Dome (PDG-T).

The Mt. Kare deposit reportedly shares geological similarities with the nearby Porgera deposit, in which Placer holds a 50% interest. Indeed, the metallurgical tests at Mt. Kare so far have shown significantly better gold recoveries than at Porgera, which, during the first quarter, averaged 75%.

Madison has also tabled assay results from the final 34 holes of its 106-hole drill program. The program was designed to test the initial resource model prepared by Watts, Griffis & McOuat: 20.4 million tonnes grading 5.6 grams gold and 28.7 grams silver per tonne, equivalent to 3.7 million contained ounces gold and 18.8 million contained ounces silver. (With all individual gold assays cut to 30 grams per tonne, the resource is estimated to be 20.1 million tonnes averaging 2.4 grams and 28.8 grams silver, or 1.55 million oz. gold and 18.6 million oz. silver.)

The drilling also defined near-surface gold mineralization at the Western Roscoelite, Black and Central zones, and led to the discovery of a new zone of mineralization, dubbed Realgar.

Highlights from the last drilling phase are shown in the accompanying table.

Holes 183-186 and holes 202-207, as well as holes 191, 192 and 196, tested the northeasterly extent of the Central zone. Drilling encountered significant gold mineralization, which thinned as the drills moved east.

Holes 187-190 and 193-195, as well as holes 201, 208, 209, 212, 213, 214 and 216, tested gaps in the resource previously outlined by WGM. Holes 197-200 tested the southern limit of the Western Roscoelite zone and failed to encounter any significant mineralization.

Stepout drilling tested the Realgar zone with holes 210 and 211. The new discovery measures 220 metres along strike, north of previous drilling on the Black zone. Hole 215 was collared 70 metres northwest of holes 210 and 211 and failed to encounter mineralization.

To update the initial resource estimate, Madison is currently compiling property data and designing a three-dimensional resource model. The new estimate is expected by the fourth quarter.

The next phase of drilling, to begin before year-end, will test high-grade epithermal quartz-roscoelite-gold mineralization. Targets include the Black, Realgar and C-9 Deep Feeder zones, plus two peripheral targets: the Pinuni Creek and Orosa prospects.

Shareholders of Madison will meet in mid-October to vote on the proposed acquisition of an additional 27.8% interest in Mt. Kare. The interest in currently held by joint-venture partner Carpenter Pacific Resources of Australia.

The deal involves the purchase of all the shares of two Carpenter subsidiaries, Frontier Mining & Exploration and Oakland Pty., for 10 million shares and 3.1 million 3-year share purchase options. The options are exercisable at $1 for two years and $1.50 in the third year.

Madison and Carpenter hold a 72.22% and a 27.78% interest in Mt. Kare, respectively. If the proposed acquisition is approved, Madison will own a 90% interest in the property and hold the remaining 10% in trust for Kare-Puga Development, which represents the Mt. Kare landowners.

Hole	Interval	Width	Gold	Silver
	(metres)	(metres)	(g/t)	(g/t)
183	54-121	67	1.03	7.7
including	66-79	13	1.77	5.8
	113-120	7	2.47	38.3
185	19-30	11	1.25	15.2
	49-54	5	1.25	15.4
186	42-59	17	1.78	6.2
	128-133	5	1.61	168.7
187	11-20	9	2.85	6.5
188	17-23	6	1	8.7
189	0-14	14	0.61	7.6
193	28-81	53	0.37	40.1
including	28-43	15	0.59	102.6
	97-103	6	0.73	44.9
194	11-33	22	1.31	9.8
195	6-9	3	1.26	17.9
196	0-10	10	0.55	41.3
201	0-9	9	1.1	9.3
202	42-53	11	1.54	5.4
203	66-69	3	1.25	14.1
208	0-4	4	1	2.6
209	1-27	26	2.79	9.4
including	12-23	11	5.83	18.9
210	7-34	27	2.66	9.7
including	7-23	16	3.73	14
211	13-40	27	3.69	15.1
216	31-34	3	1.17	15.3
	56-69	13	1.52	1.7