LATIN AMERICA — Greystar outlines gold reserves

Junior Greystar Resources (GSL-V) continues to define gold mineralization at its Angostura project in northeastern Colombia.

The project comprises 1,921 ha of mineral licences near the city of Bucaramanga, in the Cordillera Oriental of the Andes.

Greystar’s efforts have been focused on the deposit known as La Alta, and on the nearby Los Laches and Veta de Barro prospects.

Summer drilling at Los Laches and Veta de Barro added 41 holes (or 11,800 metres) to the property. Over the past three years, a total of 92 holes (or 21,516 metres) has been carried out.

Drilling at La Alta tested the northeastern extension of the deposit. Results range from 0.92 gram gold per tonne over 4.5 metres to 16.4 grams over 3.7 metres.

Geological interpretations point to a probable continuity between the five areas that constitute the Alta deposit: La Alta, Mina El Diamante, Road to El Silencio, El Silencio and La Perezosa.

Veta de Barro and Los Laches are within half a kilometre of the Alta deposit but are considered distinct entities.

Drilling recently ceased but is scheduled to resume in November. Two rigs will continue to define reserves at La Alta (one underground and the other at the surface), while a third will perform stepout drilling at Los Laches and Veta de Barro.

About US$8 million has been budgeted for exploration at Angostura in 1998.

Meanwhile, an underground decline has been advanced to 200 metres at the Tunnel Fuego Verde area, at the southern end of La Alta. Results from a panel chip sample, taken from the 198-metre mark, averaged 14.23 grams gold.

Extensive underground fan drilling is planned.

Preliminary estimate

According to an independent preliminary reserve estimate, La Alta contains 34 million tonnes grading 1.65 grams gold, or 1.8 million contained ounces. The estimate, which used a cutoff grade of 0.5 gram gold, is based on 55 drill holes. The gold mineralization has been defined over a 600-by-600-metre area and was to an average depth of 300 metres; it remains open at depth.

Metallurgical tests indicate that gold extraction rates range from 75% to 80%. Metcon Research of Tucson, Ariz., took a 640-kg, unoxidized bulk sample from the adduct at La Alta and performed a 24-hour cyanidation bottle-roll test. The sample was taken 70 metres below the surface and is considered to be representative of the Alta area. Assays yielded 3.74 grams gold and 32.47 grams silver. The Oxide zone at the site averages 40 to 50 metres in depth, and Greystar believes there is potential for both open-pit and underground development.

The geology of the area consists of Precambrian basement gneisses and migmatites intruded by a Late Paleozoic quartz monzonite porphyry. Gold is hosted in the porphyry and is structurally controlled by shears and faults.

The disseminated, porphyry-style gold mineralization is associated with pyrite and silver.

The California-Angostura district was first mined for gold by the Sura Indians during pre-Colombian times. The Angostura property was reportedly mined by the Spaniards during the 1500s and by a French organization in the early 1900s. Family-owned gold mining ventures existed pror to the arrival of the Spaniards and are still operating stamps and arastras (mines and mills) to this day.

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Mina El Diamante

Greystar acquired the Angostura gold property in 1994 and, in the following year, began drilling the Mina El Diamante gold-silver-copper prospect.

Drilling tested a 500-by-200-metre area, with hole 2 averaging 1 gram gold over 215 metres. This area now represents only 20% of the current mineralized zone.

In 1996, Greystar joint-ventured the property to Churchill Resources, which earned a half interest by spending US$2 million on exploration and surrendering 1 million shares. That same year, a 38-hole drill program began defining mineralization.

On Aug. 18 of this year, Greystar and Churchill merged. Shares of the amalgamated company now trade under the name of Greystar Resources. The company has a working capital of US$19 million with 47 million shares outstanding (52 million fully diluted).

In other news, Greystar has acquired an option on the 240-ha Minera San Antonio gold-silver prospect, which is 45 km west of Ibague, in the country’s west-central region. Greystar can acquire the property in return for US$588,000 cash paid over a 3-year perod. The property lies between 2,400 and 2,900 metres above sea level and covers a mountain known as Cerro La Guala. The focus of exploration is a Tertiary hydrothermal breccia pipe that intrudes the metamorphic rock formations of the mountain. The pipe was mined on a small scale by open-pit methods during the 1940s. Geological mapping and geochemical sampling were recently carried out, and a program of scout drilling is under way.

Greystar is committed to spending US$300,000 at Minera San Antonio in 1997.