Reserve reduction expected at Monarch’s La Camorra mine

Results from recent drilling are expected to lead to an approximate 10-15% reduction in overall reserves at La Camorra gold mine, owned by Monarch Resources (TSE). The mine, situated in Venezuela’s El Dorado state, began operations in the summer of 1994.

Underground drilling in the B zone — the widest of the four ore zones of the deposit — has determined that the postulated vein thickening, while present, is of a shorter strike length than originally interpreted. The potential loss of reserves occurs within the upper levels of the mine.

The latest interpretations of the remaining three zones show an increase in applicable reserves in terms of tonnes, but at a lower average grade, leading to a further reduction in the estimated gold content.

All the ore zones are open in at least one direction, and further underground drilling will attempt to extend the area of known mineralization. A formal reassessment of the upper-level reserves should be completed in early 1996.

As a result of the loss in reserves and delays in the delivery of spare parts, production and development at La Camorra were below company expectations. For the third quarter, the company produced 13,210 oz. of gold, and the planned improvement for the fourth quarter is no longer expected.

Despite the disappointing news, Monarch spokesman Eric Van Heyst sees no reduction in the overall life of the mine. Exploration efforts should be able to replace the lost reserves, he says. However, annual production is now expected to average about 50,000 oz., which is below the 80,000-oz. annual production rate originally envisioned for the mine.