News Roundup (October 23, 2000)

Southern Rio explores Santo Tomas

Southern Rio Resources (SNZ-V) has launched a geophysical exploration program at its Santo Tomas copper prospect in northern Chile, 160 km southeast of the port of Iquique.

The induced-polarization survey will focus on the Central Intrusive zone, the focal point of exploration to date, as well as the more recently discovered Santa Teresa zone.

Having recently collected 14 samples for oxide mineral analysis, Southern Rio reports that there is an abundance of secondary oxide minerals, including hematite and jarosite, in boxwork structures related to intrusive rocks over the central portion of the property. The results of the sampling, which are pending, are expected to help determine the sulphide mineral assemblage at Santo Tomas.

Southern Rio plans to begin a drill program once results from the geophysical survey are in hand.

Production snags take toll on Zamora

The combination of milling and grade problems at its operations in Ecuador resulted in a second-quarter loss for Zamora Gold (ZMRA-C).

The Vancouver-based junior posted a loss of $243,407 for the 3-month period, compared with a loss of $153,793 in the corresponding quarter of 1999.

Damage at the ball mill at the Campanillas gold operation, caused by breakage of the mill liner bolts, was fixed by replacing the old steel liners with new rubber liners. However, the improved milling rate that resulted (190 tonnes per day, compared with 130 tonnes previously) was offset by the presence of argillaceous material in ore sent from the nearby Katy mine. This material obstructed the vibrating screen in the second milling station. Zamora’s production was also hampered by the average grade of the Katy open pit, which proved lower than expected. The soft argillaceous material hosting the ore diluted the grade during blastings.

Crystallex buys stake in El Callao

Bema Gold (BGO-T) has entered into an agreement to sell its controlling interest in El Callao Mining (ECM-V) to Crystallex International (KRY-T).

Bema will sell its 45% interest in El Callao, together with US$14.3 million in debt owed to Bema from El Callao plus a 2% royalty on cash flow from the latter’s Lo Increible gold project in Venezuela.

In return, Crystallex will bid to take over the remaining publicly traded shares of El Callao.

The debt owed to Bema and the 2% royalty will be purchased for US$7.6 million and a 1% net smelter return royalty (NSR). Crystallex has taken an interim position in Bema’s loan to El Callao by purchasing US$3 million of the loan. Bema was to have received US$3 million in cash in mid-September. The remaining US$4.6 million will be paid in two later instalments. The 1% NSR is payable to Bema from all future gold production after 300,000 oz. gold have been produced from Lo Increible, and when the quarterly average gold price is greater than US$300 per oz.

Almaden adds to Mexican ground

An agreement with Lucero Resources (LCR-V) has allowed Almaden Resources (AMH-V) to acquire the Reyna Negra claims and related geophysical data. The claims adjoin Almaden’s Caballo Blanco claim group in Mexico’s Veracruz state.

The combined land package covers a large alkalic, volcanic and intrusive system, with alteration zones containing both disseminated and vein-type gold and silver mineralization and a porphyry-style gold-copper structure. Almaden plans to extend a grid on to its newly acquired ground and explore the combined land package.