Geomaque on track at Honduran mine

Junior Geomaque Exploration (GEO-T) has financed development of the Vueltas del Rio project in Honduras.

The company recently raised $4.6 million in a rights offering consisting of 7.6 million units priced at 60 cents each. A unit consists of one share and half a warrant; a whole warrant is exchangeable for one share until April 2001, at 90 cents each.

Canaccord Capital solicited the deal.

Proceeds are earmarked for Vueltas del Rio, where construction of the leach pad, process ponds, access road and other infrastructure is complete.

Commercial production is slated for the first quarter, with output for all of next year projected at 40,000 oz. Annual output thereafter is projected at 60,000 oz., with cash costs expected to average US$169 per oz.

Vueltas del Rio, one of two heap-leach projects owned by Geomaque, holds 5.6 million tonnes in reserves grading 2.5 grams gold per tonne. The other is the producing San Francisco mine in Mexico, which is expected to churn out 70,000 oz. this year. In 2001, their combined output is expected to top 130,000 oz. at an average cash cost of US$213 per oz.

An exploration program recently added a strip of mineralization to the San Roberto zone at Vueltas del Rio, and reserves are expected to rise accordingly (T.N.M., Sept. 27/99).

In light of gold’s rebound, Geomaque has disclosed that it has sold forward 10,000 oz. at US$290 per oz. It also has calls on 21,000 oz. at US$323 per oz. spread over 15 months and another 20,000 oz. at US$388 per oz. over five months. This leaves 95% of the company’s reserves unhedged.