LATIN AMERICA — Canuc, Placer Dome explore Nambija property in Ecuador

In Ecuador’s Zamora Chinchipe province, Placer Dome (PDG-T) is exploring the Nambija gold property held by Toronto-based Canuc Resources (CANC-C).

The Nambija camp was originally exploited by native Americans who were later displaced by the Spanish conquistadores. The Spaniards, in turn, were driven from the area in the 1700s, leaving the area dormant until its rediscovery in 1980.

At that time, the camp was invaded by 25,000 people, resulting in a state of chaos that was quelled by the imposition of martial law.

By 1993, with the population of artisanal miners dropping below 3,000, the government surveyed a key 69 ha area and divided the ownership amongst 642 active miners.

The surveyed area was divided into two units named Condominio Norte (410 owners) and Condominio Sur (232 owners). The situation was unique in Ecuador in that in each owner was entitled to mine anywhere in his respective condominio as long as it did not interfere with an existing operation.

This relatively uncontrolled activity allowed the proliferation of 800 surface openings and about 120 km of narrow tunnels.

Over time, some owners banded together. The largest such grouping was at the underground Gold Star mine, which produced about 35,000 oz. gold annually, with a recovery rate estimated at just 55% as a result of primitive milling methods.

In May 1996, Canuc entered the scene, buying up condominio rights at Nambija.

Asked what it was like to deal separately with so many rights-holders, Canuc President Hubert Mockler answers: “That was the task that scared everyone away. So many North Americans had gone to look at this project and walked away, saying, ‘That may be one of the best gold projects in South America, but no one will be able to solve the social problems there.’ What were you going to do with these 3,000 people plastered on a hillside, and how long would it take to get resolved?

“But as of two years ago, there seemed to be an independent collective realization among the miners that they could no longer work in there. They were starting to lose people at the ends of these little tunnels as a result of asphyxiation. They were in there hanging off the sides of the walls and falling down the sides of the stopes. It’s an operation that blows your mind when you go and look at it. You say, My God, people must be really hungry to have to do this.’ Canuc arrived at the time that they were making that realization.”

The company has entered into a standard arrangement whereby it will buy an individual’s rights for about US$5,000. In addition, Canuc is buying tunnels and other underground workings for about US$73 per metre. ” They can retire like kings with that kind of money,” says Mockler.

Canuc is acquiring the balance of the mining rights from the remaining 40 to 50 people, and is also buying up houses in the town.

The Nambija property is divided into three distinct rock types that strike in a north-south direction.

The first type is a highly silicified skarn zone (a highly altered mudstone or limestone containing garnets) along the western margin of the condominios.

The skarn zone, which has been folded and altered, hosts the Gold Star, Playon and Arco mines. Playon and Arco were the areas most extensively exploited by the Spaniards.

Running through the centre of the condominios is a silicified, pyritic feldspar breccia.

Along the northeastern boundary is a belt of highly oxidized and silicified rocks containing both gold and copper mineralization. The structure, named El Tierrero, is thought to be either a copper-gold porphyry or quartz stockwork.

At Gold Star, where Canuc undertook an underground sampling program, the preliminary resource is estimated at 8.6 million tonnes grading 7.9 grams gold.

While Canuc has a 60% interest in Gold Star, the company has signed an agreement allowing it to acquire the remaining interest by issuing: US$3.8 million in promissory notes; 7 million Canuc shares; 4 million share purchase warrants exercisable at $4.50 each before May 31, 1997; and additional shares, which having a total market value of US$1.25 million.

Placer, which is earning an option in Nambija from Canuc, is concentrating its exploration efforts on the Tierrero block, where a 4,000-to-8,000-metre drilling campaign is scheduled to begin shortly. A drill rig is being carried to the site by hand along a trail created by a crew of 200 Ecuadorans. The trail must swerve to avoid a heavily oxidized zone on the mountain face, where a landslide killed as many as 1,000 people in the early 1990s.

While artisanal excavations have reached a depth of about 150 metres at El Tierrero, Placer’s drilling will reach depths of between 400 and 500 metres.

” Placer is looking for a great big gold-copper porphyry system underneath the Tierrero area,” says Mockler.

A crude resource has been estimated for the area being tested (about 40% of the Tierrero block): 35.5 million tonnes grading 2.2 grams gold.