Philex disappoints

Vancouver — Drill results from Philex Gold‘s (PGI-V) Boyongan deposit in the Philippines have prompted operator Anglo American (AAUK-Q) to seek additional tonnage on the surrounding North property.

Although the deposit contains high grades in part, the tonnage anticipated from the oxide zone is unlikely to be sufficient to support a large-scale, long-life operation. Also, the deep-seated sulphide mineralization now appears to have an erratic grade distribution.

The latest drilling tested the northern, eastern and southern edges of the deposit, effectively closing it off. Highlights include the following:

q Hole 56 — 431 metres grading 0.66% copper and 0.37 gram gold per tonne;

q Hole 57 — 730 metres grading 0.17% copper and 0.24 grams gold per tonne;

q Hole 58 — 426 metres of 0.14% copper and 0.05 gram gold;

q Hole 59 — 657 metres of 0.37% copper and 0.43 gram gold;

q Hole 60 — 764 metres of 0.12% copper and 0.14 gram gold;

q Hole 61 — 432 metres of 0.39% copper and 0.62 gram gold;

q Hole 62 — 548 metres of 0.26% copper and 0.27 gram gold;

q Hole 63 — 12 metres of 1.5% copper and 6.2 grams gold followed by 298 metres averaging 0.99% copper and 0.58 gram gold;

q Hole 63 — 445 metres of 0.32% copper and 0.34 gram gold.

Anglo American discovered the deposit in September 2000, when hole 6 returned a 365-metre intercept grading 0.7% copper and 1.9 grams gold per tonne. Subsequent drilling throughout 2001 and 2002 continued to yield impressive numbers, including 393 metres grading 1.58% copper and 2.39 grams gold in hole 15, and 896 metres of 0.49% copper and 1.57 grams gold in hole 18.

A porphyry deposit hosted by a composite diorite stock, Boyongan was locally affected by a later argillic event, which has resulted in some high grades. The prospect hosts unusually deep supergene oxidation (more than 400 metres locally), which was preserved as a result of being capped by Quaternary sediments and lavas. Malachite, azurite, cuprite and native copper define the oxide zone. Chalcopyrite and bornite dominate the primary copper sulphides.

So far, Anglo has outlined a 500-by-300-metre zone of mineralization grading greater than 1% copper-equivalent with a broader, 850-by-450-metre area averaging greater than 0.5% copper-equivalent.

“Resource estimates incorporating the results of additional drilling and metallurgical test work should be available in the second half of this year,” says Philex CEO Gerard Brimo.

A year ago, the preliminary resource stood at 280 million tonnes averaging 0.93 gram gold and 0.57% copper, which translated into 17.8 million oz. gold-equivalent.

Since the deposit has failed to meet its tonnage standards, Anglo will explore for additional mineralized porphyries on the property.

Says Brimo: “The focus for the first half of 2003 is to evaluate other porphyry systems in the vicinity of Boyongan, as evidenced by the intercepts of “bird’s eye” porphyry and other geological indications in previous drilling, including the ongoing hole 65, northwest of the deposit, which intercepted oxide mineralization.”

Collared from the same site as hole 32 (no significant values) and drilled in a westerly direction, hole 65 cut oxidized, argillized and potassic altered medium-grained diorite with minor quartz stockworking from 291 metres to its current depth of 438 metres. Oxide mineralization comprises cuprite, azurite, malachite and trace chalcocite.

Drilling adjacent to Boyongan is continuing with four rigs, while two rigs are currently being transferred for scout drilling at the Bagacay prospect.

“The Anglo exploration program for 2003 includes 28,000 metres of drilling,” adds Brimo. “Exploration will intensify on targets immediately northwest and west of the deposit, where 10,000 metres of drilling are planned. An additional 6,000 metres are planned at Magpayang, 3 km south, and at Bagacay, 2 km northwest of Boyongan, during the first half.”

Late in 2001, Anglo American purchased an additional 10% equity stake in the project and surrounding ground from Philex for US$20 million. Additional payments of up to US$5 million will be required should the metal content of the deposit, or of any other discovery in the surrounding claims, contain more than 3.6 million tonnes copper-equivalent.

Currently, Philex and Anglo American each hold a half-stake in the project. The major can earn an additional 30% by completing a bankable feasibility study.

Meanwhile, junior Goldminco (GCP-V) has launched its long-awaited 1,000-metre drill program on the Balabag property on Mindanao Island.

The property was first worked by Rio Tinto (rtp-n) in the late 1990s, when some 300 channel and chip samples from a major ridge returned a weighted average of 10.97 grams gold and 258.69 grams silver. Small-scale mining is scattered throughout and on both sides of the ridge. The highest-grade sample collected to date — 273 grams gold and 109 grams silver — came from the face of the old Tinago workings.