A brighter exploration picture is forming at the Vueltas del Rio open-pit gold project in Honduras, with the discovery of a new zone of near-surface mineralization in an area previously proposed as a dump site.
This discovery comes on the heels of another, 2 km to the west in the El Zapotal area. There, 13 holes cut polymetallic mineralization in a zone measuring 600 by 120 metres, including 15 metres (13.5 to 28.5 metres) grading 1.08 grams gold, 12.1 grams silver and 7.23% zinc (T.N.M., June 7/99).
Mineralization in the new zone is flat-lying and hosted by saprolite, as at San Roberto. Little waste-stripping is required, Geomaque says, and therefore costs are expected to be low.
Results include:
- hole 8, which returned 19.5 metres (starting from surface) grading 3.64 grams;
- hole 9, which returned 9 metres (starting from surface) grading 2.5 grams and 3 metres (40.5 to 43.5 metres) grading 2.38 grams;
- hole 7, which averaged 12.4 grams over 1.5 metres (starting from surface) and 4.58 grams over 3 metres (7.5 to 10.5 metres); and
- hole 4, which averaged 3.11 grams over 4.5 metres (starting from surface).
Mineralization remains open to the east, west and south.
As well, eight infill holes sunk in the western edge of San Roberto intersected ore-grade mineralization. The best result came from hole 27, which
intersected 7 metres of 6.61 grams in a 28-metre-long envelope of mineralization that extends from surface.
Immediately south of the San Juan zone, which lies immediately east of San Roberto, holes 15 and 16 each cut 1.5 metres averaging 3.99 and 7.11 grams, respectively. Stepout hole 18, which was collared 200 metres east of
the easternmost holes previously drilled, returned two separate 3-metre long intervals averaging 5.66 and 5.77 grams, whereas hole 19, collared 100 metres southeast of the planned pit, averaged 1.89 grams over the same
core-length.
Anomalous values were also reported for holes 12 and 13. Both were collared 140 metres southeast of hole 19 and returned up to 1.66 grams over 1.5
metres.
Geomaque’s exploration success is being overshadowed by the low gold price. The company is revising its development plan in favour of a phased construction program similar to the one undertaken at its similar-type San Francisco mine in Mexico. The San Francisco was advanced to production in 1996 at US$5 million and subsequently expanded in 1997.
Although details were not available at presstime, a company spokesman said capital costs are expected to drop significantly from the feasibility estimate without dramatically altering production forecasts. An independent study in late 1998, which used a gold price of US$300 per oz., concluded that the project could be developed into a 60,000-oz.-per-year operation for US$14.4 million, with operating costs averaging US$169 per oz. thereafter.
“Were not talking 20,000 oz. per year versus 60,000 oz.,” says Sean Stokes, Geomaque’s manager of investor relations. “The idea is to get this into production and start generating cash flow from it, and then follow the same approach at San Francisco.”
Facilities already completed include the processing pond and the phase-one leach pad and lab facility. Engineering, road construction and mine planning are in progress, with the first gold pour scheduled for year-end. To cover the remaining capital costs (cash reserves have been used so far), Geomaque is pursuing alternatives to a bank loan, as the lower upfront costs and current gold price render this undesirable.
Combined reserves in the Main, San Roberto and San Juan zones are pegged at 5.1 million tonnes grading 2.5 grams gold. These are contained in a total resource of 29.7 million tonnes averaging 0.7 gram and were calculated using an internal cutoff grade of 0.35 gram for oxidized material and 0.5 gram for transitional and unoxidized material.
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