South-Malartic boosts resource at Croinor (March 04, 2002)

Junior gold explorer South-Malartic Exploration (MSU-V) has once again raised the resource estimate for its Croinor gold deposit, 60 km east of Val d’Or, Que.

South-Malartic’s work at Croinor over the past few years has led to the discovery of flat-lying gold-mineralized zones within tension-gash and brecciated structures associated with, and perpendicular to, a previously known, gold-bearing shear zone.

In February, Croinor reported that its resources had grown to 3.3 million tonnes grading 2.25 grams gold per tonne, equivalent to for 241,000 contained ounces, in the measured category, 1.3 million tonnes at 1.93 grams gold, or 78,000 contained ounces, in the indicated category, and a further 2.5 million tonnes of inferred material.

Resources are hosted in an zone measuring 2.1 km long, 550 metres wide and 460 metres deep, though most of the gold is found at a depth of less than 107 metres. A resource cutoff grade of 0.5 gram gold per tonne was used for the portion of the zone that extends to a depth of 150 metres, and 1.0 gram was used for the resource below 150 metres.

The new resource figure is based on 30,890 assays comprising 551 surface holes, 354 underground holes and 53 channel samples.

The structure and mineralogy of Croinor’s tension veins are similar to those seen at McWatters Mining‘s (MCW-T) suspended Sigma-Lamaque mine in Val d’Or, where, in less than a year, near-surface gold reserves soared to 16.3 million tonnes grading 3.02 grams gold from 350,000 tonnes of 3.5 grams. The upgrade occurred after geologists recognized the existence of sub-horizontal gold-bearing tension veins.

In a prefeasibility study completed at Croinor in May 2000, before the recognition of the tension veins, resources were pegged at only 1.1 million tonnes grading 2.44 grams gold.

South-Malartic has now earned a 70% interest in the Croinor property from Huntington Exploration (HEI-V) by spending $1.5 million on exploration over the past four and a half years. South-Malartic now becomes the operator of the joint venture.

From 1996 to 1997, Croinor was the site of a small open-pit gold mine operated by Calgary-based Huntington, which was named Goldust Mines at that time.

Going forward, Huntington may participate in the Croinor joint venture according to its 30% interest, or it can opt to have its interest diluted as further exploration expenses are incurred by South-Malartic.

New zone

In February, South-Malartic announced it had discovered a new gold-mineralized zone in the heart of the Croinor property, in an area where the company channel-sampled last summer.

The discovery is the result of the first seven drill holes collared in 2002, all of which intercepted gold values exceeding 1 gram per tonne within quartz-tourmaline veins.

So far, the drilling has delineated the new zone over a lateral extent of 92 metres, to a depth of 61 metres, and over a width of 11 metres. The new zone is not included in the latest resource estimate for Croinor.

The new gold zone is in a different geological setting than that of the main, dioritic Croinor deposit, which is more than 610 metres to the southwest. South-Malartic describes the gold mineralization in the new zone as being associated with a quartz-feldspar porphyry dyke containing disseminated pyrite and quartz-tourmaline veins. Locally, gold mineralization also extends outside of the porphyry dyke into volcanic and intrusive material.

The company says its latest geological model for Croinor indicates that about 30% of the diorite unit is altered and that it represents a total of 114 million tonnes of alteration corridors, which are considered to be potential hosts for more gold mineralization.

South-Malartic plans to carry out 7,000 metres of follow-up drilling at Croinor.

Based on the encouraging results, the company has filed and purchased additional mining claims next door to the Croinor property, immediately to the north, south and west. Thus, the Croinor property has more than doubled in size to 286 mining claims covering 4,624 hectares.

The Croinor property is 20 km from the Chimo mill, which is now wholly owned by South-Malartic following its purchase from Cambior in 2000. South-Malartic acquired the mothballed, 2,000-tonne-per-day mill for $375,000 and the assumption of any environmental liabilities.

Earlier, the company bought the Chimo property (excluding the mill) and the adjacent Nova property from Cambior for $1 and a 1% net smelter return royalty.

The Chimo property contains a resource, in all categories, of 600,000 tonnes grading 1.9 grams gold, or 36,000 contained ounces. This resource includes portions of three near-surface zones named 2, 3 and 5.

South-Malartic may carry out definition drilling at Chimo to boosts the resource base, with a particular focus on zone 5.

In January, South-Malartic closed a $405,000 financing consisting of various flow-through and ordinary shares and warrants. The company also obtained $283,000 in grants from Quebec’s Ministry of Natural Resources under the latter’s Assistance to Exploration Companies program.

In the boardroom, Rene Lampron has become South-Malartic’s president after serving as interim president.