Value of mineral exploration in Yukon drops in 1992; Placer

Last year’s US$2.5 million drill program produced “encouraging results”, but not enough information for Placer Dome (TSE) to make a reliable estimate of the resource on the Las Cristinas gold property in southeastern Venezuela.

But the major’s reticence probably won’t stop mining analysts from speculating that this new find in Venezuela’s Kilometre 88 district has multi-million-ounce potential (most estimates appear to be in the range of 12-30 million oz.). The discovery near a paved highway also sparked a gold rush that has a number of mining companies scrambling to tie up ground around the Placer strike.

Philip Martin of securities firm Gordon Capital noted in a recent research report that the move to Venezuela was motivated by changes to the mining code, including lower tax rates and a more open attitude towards foreign ownership of mineral properties.

“Canadian-listed junior companies have been quick to make a major commitment to the country,” Martin said. “Their move has been enthusiastically endorsed by the market as demonstrated by their recent share price performance.” The Kilometre 88 area is found within a highly prospective greenstone belt comparing favorably to those hosting world-class deposits in Eastern Canada and Africa. But the district hasn’t received much modern exploration, although independent miners and garimpeiros from Brazil are estimated to have produced more than one million ounces using primitive methods. Most of the activity is near Las Cristinas, where Placer Dome drilled 120 holes totalling about 28,000 ft. in 1992. Most holes were to a depth of 160-200 ft. to test geochemical gold anomalies. Holes were initially spaced 1,300 ft. by 650 ft. within an area three miles by one mile, with some areas infilled with drill holes 650 ft. by 325 ft. apart. The major called this drilling density “typical” of early-stage exploration.

This year, Placer intends to drill closer-spaced holes in the main geological target, which it noted was one of many defined to date by geochemical and geophysical surveys.

“We hope to have one of several target areas drilled to a sufficient density of drill holes to

estimate a gold resource by the middle of this year and then to accelerate drilling of the rest of the concession,” said Eliseo Gonzalez-Urien, senior vice-president of exploration.

A Placer Dome subsidiary holds a 70% interest in Minera Las Cristinas (MINCA), with the other 30% held by state-owned Corporacion Venezolana de Guyana (CVG). MINCA has the right to explore and mine surface and bedrock deposits of gold on 9,900 acres leased from CVG, and it recently secured an additional 2,460 acres adjoining Las Cristinas to expand its land position. CVG has applied to the government for additional rights to copper and other mineralization.

Robert Friedland’s Venezuelan Goldfields (VSE), formerly Mt. Grant Mines, is one of the more aggressive juniors active in the Kilometre 88 district. The company recently signed joint venture agreements with Carson Gold (VSE) and Queenstake Resources (TSE), both of which have interests in concessions near Placer Dome’s concession.

Murray Pezim’s Eurus Resource (VSE) is planning to drill the Albino property adjoining Las Cristinas, under the terms of a recent joint venture agreement with Crystallex International (VSE).

South of Las Cristinas, Gold Reserve (NASDAQ) is active on a massive sulphide target (gold-silver-copper-molybdenum).