MEXICO AND CENTRAL AMERICA — Lyon Lake looks to Costa Rica’s mineral potential

With the haulage road to its Beta Vargas mine nearly finished, Lyon Lake Mines (LLL-M) is now looking past that project to some promising exploration ventures in Costa Rica.

Construction of the Beta Vargas mill — originally scheduled to start in October but delayed to avoid the rainy season — will be under way at the beginning of November. Beta Vargas, the first new mine to receive a Costa Rican production permit in 11 years, has reserves of 2.9 million tonnes grading 1.3 grams gold per tonne. The deposit is an epithermal vein system in strongly silicified volcanic rocks, lying near a major southeast-striking fault.

At the adjoining Canamazo concession, immediately north of Beta Vargas, Lyon Lake has carried out a detailed geochemical survey on soil and rock covering a gold showing previously investigated by another company — a showing that has similar geology to Beta Vargas. “Essentially it’s the same alteration — a silicified zone but probably a lot wider and a lot more ounces for the same strike length,” says Jean-Pierre Lachance, Lyon Lake’s vice-president, who oversees the Costa Rican projects. “But certainly it’s likely to be heap-leachable.”

Earlier airborne radiometric surveys detected an area with high natural radioactivity from potassium-40, which Lyon Lake geologists interpreted as a site of possible hydrothermal alteration. The Beta Vargas deposit shows a similar radiometric signature.

Airborne magnetic surveys showed patterns that suggested the same area was crossed by a major southeast-striking fault intersected by a number of smaller faults.

The geochemical survey revealed a 500-by-350-metre area with gold concentrations of up to 1.7 grams per tonne in soils, and rock outcrops with gold concentrations of 4 to 8 grams per tonne. It coincides with a zone of silicified volcanic rock 800 metres long and 300 metres wide.

“This is like a textbook,” says Lachance. “It’s very rare that you go from a geophysical interpretation and [the mineralization] is right there.” About 1,000 metres of diamond drilling has been completed, and assay results are expected shortly. “It already looks very interesting,” says Lachance. “We strongly believe that, from now to the end of the year, we can add some more reserves to the project.” The Canamazo showing offers to provide a good satellite operation for Beta Vargas, since it is about 10 km by road from the site of the future mill.

Lyon Lake also has four exploration concessions — collectively called the Esperanza property — in northern Costa Rica near the Las Crucitas gold deposit, now being evaluated by Placer Dome (PDG-T). Barrick Gold (ABX-T) and Western Mining are also large permit holders in the area.

Las Crucitas has veinlets and disseminated mineralization in a sequence of altered volcanic fragmental rocks and lies next to a northeast-striking graben fault. Lyon Lake sees the best potential for another gold deposit at the intersections between these structures with other oblique faults.

Magnetic and radiometric surveys flown last year have drawn the company’s attention to the northernmost of its permit areas, where two areas with high potassium-40 radiation suggest the presence of granitic intrusive rocks.

Lyon Lake expects to begin detailed exploration on Esperanza in late November, starting with soil geochemistry. “It works great in this country,” says Lachance. The detailed work will be going on as Placer begins further delineation drilling at Las Crucitas and as Barrick and Western Mining start ground checking on airborne anomalies.

In Costa Rica, getting permits has traditionally been a drawn-out ordeal involving tough environmental regulations combined with a slow-moving approval process. For a time, a moratorium was placed on mine permits. When the moratorium was lifted, the exploitation permit for Beta Vargas was still held up, even though all the requirements for approval had been met. This brought the company to the point of seeking an order from the Costa Rican courts, though at the eleventh hour the permit was granted.

Lachance expects the process will be easier in the future. “With Placer Dome very active, and also Barrick, the government has no chance to change its mind, so slowly but surely [the situation] is changing; the minister of mines is opening his mind.”

The exploitation permit for Beta Vargas can be expanded to include parts of the Canamazo concession as well, which will allow relatively easy permitting for any future operation there.