VSM, Serem up reserves on Grevet zinc project

Geological reserves at the Grevet zinc-copper-silver project operated by Serem Quebec and held under option by VSM Exploration (ME) have topped the 10-million-tonne mark. Situated about 40 km northeast of Quevillon, Que., the Grevet polymetallic deposit has seen its reserves nearly quadruple since a major surface drilling campaign began early last year.

The Montreal-based junior has an option to earn a 50% interest in the property from Serem, while the company’s main shareholder is Canada’s largest gold producer Placer Dome (TSE) with a 55% stake in the shares of VSM.

The new geological reserve figure, which includes all drill results available by Dec. 31 is as follows: 0105,0604,0505,0602,0408,0000 0110,0604,0500,0602,0408,0000 Tonnage Zinc Copper Silver Zone (tonne) (%) (%) (grams/tonne) III 7,580,000 8.27 0.46 33.3 IV 2,580,000 8.28 0.37 39.5 Total 10,160,000 8.27 0.44 34.8

Hosted by a belt of felsic volcanic rocks that strike roughly 120 degrees across the property, the two parallel zinc lenses are separated by a distance of about 75 metres and have a near-vertical dip. The true thickness of the mineralized zones varies between two and eight metres, with the average thickness reported at 4.4 metres.

The preliminary reserve estimate, completed recently by Kilborn and Associates in collaboration with the Bureau de Recherche Geologiques et Minieres (B.R.G.M) of France, is part of a prefeasibility study under way on the deposit.

VSM is in the process of completing a major public financing which envisages an underground exploration program getting under way later this year.

Mining reserves were also calculated recently. When a cutoff value of $50 net smelter return per tonne is used, the fully-diluted probable and possible reserves are as follows: Tonnage Zinc Copper Silver Zone(tonne)(%) (%) (%) III 4,827,900 9.57 0.53 37.0 IV 1,115,600 10.52 0.47 43.5 Total 6,102,500 9.77 0.52 38.4

In November, 1989, following the completion of a summer drill program, the partners announced undiluted probable and possible reserves for zones III and IV of 5.6 million tonnes grading 8.59% zinc, 0.47% copper and 34.9 grams silver per tonne.

At a net smelter return of $40, mining reserves now total 6,615,472 tonnes grading 9.51% zinc, 0.49% copper and 38.29 grams silver. The new figure, incorporating drill results to a depth of 600 metres, has a better zinc grade than the earlier estimate, and the calculations are fairly conservative because they use a zinc price of US54 cents.

The above figures do not include additional reserves of 476,650 tonnes grading 9.69% zinc, 0.58% copper and 24.1 grams in the Grevet B zone, a satellite deposit situated 2.5 km southeast of Grevet M.

Shares of VSM have traded recently at 80 cents within a 52-week range of 40 cents-$1.09. The company says it has also filed a listing application with The Toronto Stock Exchange.