Trillion acquires bigger stake in Zimbabwean gold mine

Kanata, Ont.-based Trillion Resources (TLG-T) has purchased the remaining interest in the Indarama gold mine in Zimbabwe it did not already own.

In November 1996, Trillion acquired a 20% interest in the Indarama group of mines for US$3 million, with the option, until November 1998, to purchase the remaining interest for US$21.5 million. Trillion renegotiated the original agreement and exercised its option 14 months before the option expired.

Trillion, which has been the operator since Sept. 21, will acquire the remaining 80% of Indarama for US$16.5 million, 20% less than the original price, to be paid as follows: US$5 million payable on closing of the deal, plus 698,182 shares of Trillion; US$5 million (plus accrued interest) by May 31, 1998; US$3.3 million (plus accrued interest) by May 31, 1999; and US$1.5 million paid to Boulder Mining, a private Zimbabwean firm, to buy its 10% interest in Indarama.

Based on a recent independent resource estimate, Indarama contains 7.5 million tonnes grading 2.1 grams per tonne. Over the last year, however, Trillion has conducted an intensive due diligence program, including 25,000 metres of core and reverse-circulation drilling. Based on the results of that work, Trillion estimates resources in all categories at 13.5 million tonnes grading 3.2 grams gold per tonne.

According to the company, Indarama is currently operating as a successful small mine, producing approximately 15,000 oz. per year. An expansion to install a new crushing plant and increase production to 30,000 oz. per year is scheduled to be completed in four months.

Exploration, development drilling and mine production design to increase annual production to 80,000 oz. within three years continues.

Exploration by the company for additional mineralization continues; two diamond drills and one reverse-circulation drill are currently operating, and a third diamond drill will begin working this month.

The Indarama mine property hosts a variety of ore types in close juxtaposition: a disseminated, pyritic ore in a sericitized felsic intrusive body, characterized by laterally extensive zones of low-grade mineralization; narrow stibnite-arsenopyrite and variably iron sulphide-rich quartz veins in shallow-dipping reverse faults; and a sulphidized, banded or brecciated chert-magnetite iron formation.