Triton finds Nicaraguan assets ripe for the picking

The economic reforms initiated five years ago in this then-war-torn country have ushered in a climate of relative stability and security. As state-owned mines and other assets became privatized, foreign investment slowly began to pour in, rising by as much as 3.5% in 1994. Among the first Canadian companies to take advantage of these reforms was Vancouver-based Triton Mining (TSE).

A year ago, Triton, through its 95%-owned subsidiary Minera de Occidente, acquired the producing Limon gold mine, and when The Northern Miner recently visited the operation, production was in full swing and exploration was ongoing.

Situated 60 miles northwest of Managua, the mine site comprises both a 77-sq.-mile exploitation and a 1,363-sq.-mile exploration concession. (The remaining 5% interest of Minera de Occidente is held by Inversiones Mineras, a holding company representing the unionized mine workers in Nicaragua.) The mine is subject to a 5% net smelter return royalty and Minera de Occidente is subject to a 6% net profits interest held by Repadre Capital (TSE), a Toronto-based firm which holds 24% of Triton’s outstanding shares.

Triton’s primary objective upon acquiring the concession was to undertake an expansion and modification of the Limon mine area. The company succeeded in boosting the reserve base by about 45% by the end of 1994. An exploration budget of US$1.2 million is set for this year on not only its Nicaragua concession, but on its Argentine properties as well.

The Limon mine consists of two open pits adjacent to a 50-year-old, 496-ton-per-day cyanide processing plant and an underground mine 3 miles to the west. From 1989 to 1993, annual

production ranged from 19,000 to 26,000 oz.

In 1994, the mine, besieged by equipment repairs, a labor dispute and lack of development, produced about 17,000 oz. During the last four months of 1994, it yielded 6,500 oz. at a cash operating cost of US$299 per oz. In the first quarter of 1995, Triton produced 5,592 oz. at US$282 per oz. Cash costs for the month of March alone were US$257 per oz. (Underground development is included in the operating costs.)

Triton Mining’s vice-president, P. Bradley Marchant, expects to reduce operating costs to less than US$200 per oz. once a new mill, currently under construction, comes on stream. The $6.4-million expansion project will see the construction of a 1,100-ton-per-day, semi-autogenous-grinding ball mill and crusher grinding circuit combined with cyanidation and carbon-in-pulp (CIP) recovery.

On a tour of the mine site, The Northern Miner noted that the concrete foundations were completed, the ball mill was up on footings, the CIP tanks were installed, and the welding of the leach tanks was under way. The new mill is expected to start up by the last quarter of 1995 and produce 50,000 oz. per year. The mine site currently employs 295 people.

The concession is underlain by Tertiary-age andesitic and rhyolitic volcanic rocks of the Lower Coyol group. Gold mineralization occurs within a series of fine-grained, pyritized-banded quartz veins and silicified breccia. An extensive system of vein structures covers roughly 23 sq. miles within the concession. The clusters of veins feature numerous dips and strikes, with widths ranging from less than 3.3 to 82 ft.

The extensive nature of the alteration is evident by the gossanous outcrops that litter the property. Staff Geologist William Overbay remarked that the alteration is overwhelming from a prospecting point of view, while David Jenkins, vice-president of exploration, added that there is no shortage of exploration targets on which to expand.

The so-called Nicaraguan Depression, situated 11 miles to the west, is one of four geographic provinces in the country. The northwest-trending graben structure contains numerous volcanoes surrounded by alluvial plains. Its borders appear to control deposition of gold in vein-style, epithermal environments and also in shallow, hot, springs-style environments.

LANDSAT (satellite) data suggest that the Limon mine is situated on the edge of a volcanic caldera which has a diameter of about 40 km.

Gold production in the district dates back to the previous century. A subsidiary of Noranda, Minera Septentrion, managed the operation from 1937 until 1979, when all Nicaraguan mines were nationalized. The Santa Pancha mine, about 3 miles to the east of Limon, operated until 1991, producing more than 2.2 million oz. gold and 4.5 million oz. silver.

In the 1980s, exploration led to the discovery of the Talavera deposit, which is currently being mined. Several veins are being worked using cut-and-fill methods in conjunction with sub-level stoping. Minable reserves stand at 1.4 million tons grading 0.17 oz. gold per ton over an average width of 18.4 ft. Three headings are on the go, with development work under way on the western extension of Talavera; this work is expected to add two more headings by the third quarter.

A new access road to the mill, now under construction, will shorten the distance to 1.6 miles and eliminate the necessity of hauling ore through a neighboring village.

Meanwhile, surface drilling of the Santa Emilia Oeste vein system has intersected as many as five veins with grades similar to those at Talavera. The area is accessible by drifting 1,475 ft. to the east of the underground workings of Talavera. The company hopes to gain a better understanding of the Santa Emilia system as a result of additional drilling.

Proven and probable reserves are estimated at 100,000 tons grading 0.25 oz., and Jenkins said he expects these figures to rise substantially as drilling continues.

The North and South open pits occupy the Limon vein, which was previously mined by underground methods. Separating the two pits is a low-grade zone, known as the Central pit, which hosts reserves grading in the range of 0.055 oz.

The Northern Miner observed that miners were concentrating on the North pit, where reserves are estimated at 180,728 tons averaging 0.12 oz. at a stripping ratio of 2-to-1. The operating plan for 1995 is based on a preliminary pit design, and Triton foresees a much deeper pit with a possible extension to the north.

Quartz veining and silicified breccia are mapped over a distance of 1,639 ft. north of, and contiguous with, the North pit. Initial trenching values in the area, known as La Tigra, include 59 ft. of 0.32 oz., 27.9 ft. of 0.45 oz. and 71.1 ft. of 0.21 oz.

The South pit hosts reserves estimated at 188,442 tons grading 0.088 oz. over an average width of 67.9 ft. and at a stripping ratio of 0.7-to-1. Additional drilling is required to determine the resource at depth.

Exploration in the Limon mine vicinity is also targeting areas for their bulk- tonnage, heap-leach potential. In particular, Triton is investigating disseminated gold mineralization in argillic alteration adjacent to the veins. Two such areas include Santa Emilia Norte and Aparejo.

The latter is a vein-stockwork system 3 miles east of the mill. The 984-ft.-wide zone has a known strike length of 1.2 miles and appears to lie north of, and in conjunction with, the Santa Pancha vein. Extensive trenching, now under way, will be followed by a few diamond drill holes. If results are favorable, reverse-circulation drilling will follow. Sampling from a single, 984-ft. trench has returned 108 ft. of 0.03 oz., 98.4 ft. of 0.16 oz. and 55.7 ft. of 0.1 oz. Preliminary column leach testwork is in progress.

As part of its regional program, Triton is focusing on prospects in its 1,351-sq.-mile exploration concession, which lies within the Cerro Quemado district.

Situated 25 miles northwest of Limon, the district is considered a high-priority target and is the site of high-grade mining by more than 300 local interests. Several mineralized trends are known to exist, with the Main zone extending more than half a mile in length. Narrow, high-grade quartz veins occur within a 98-to-328-ft.-wide alteration zone. Triton is preparing to drill several zones in order to assess their bulk-tonnage potential.

Forty-five miles east of Limon is a former producer k
nown as La India. Exploration by the Russians in the early 1980s focused on a series of quartz-vein structures. Based on several miles of underground workings and more than 100 drill holes, the Russians estimated that India contained 2.4 million oz. Preliminary mapping by Triton has identified silicified zones containing bulk-tonnage potential.

The company also holds an option to acquire a 75% interest in the Topacio project in northeastern Nicaragua. Previous work within the 70-sq.-mile property outlined a probable reserve of 616,018 tons grading 0.18 oz. and a possible reserve of 5.7 million tons grading 0.18 oz. Recent trenching along outcrops of several veins indicates the gold mineralization extends into the wall rocks adjacent to the veins. Assay values include 45.9 ft. of 0.49 oz., 57 ft. of 0.16 oz., and 39.7 ft. of 0.24 oz.

Outside of the Central American country, Triton has demonstrated an interest in Argentina. The company is involved in a 50-50 joint venture in nine properties with Minera Aconcagua, which itself was recently acquired by Northern Orion Exploration (VSE).

Work to date has concentrated on two of these properties, Organullo and Incahuasi, which are situated in the respective northern provinces of Catamarca and Salta.

At Organullo, geochemical sampling has identified a potentially large-tonnage gold anomaly which extends more than 2.5 miles in length and up to 2,623 ft. in width. And at Incahuasi, low-grade gold values are reported from strongly altered, silicified zones measuring up to 148 ft. in width. Follow-up drilling is planned for both properties.

In Salta province, Triton holds the Inachule property, where sampling across wide areas of argillic and siliceous, altered dacite has returned values of 0.01 oz., with quartz veins running 0.029 to 0.058 oz. The company expects to drill-test the zone later this year.

Triton has undertaken a private placement of 2.7 million special warrants at $3.75 each. One entitles the holder to one common share of Triton for no additional consideration. Proceeds will be applied to exploration expenses. Triton has 13.5 million shares outstanding.