LATIN AMERICA — Balaclava outlines work programs for Peruvian properties

Balaclava Mines (BIL-V) has assembled an impressive portfolio of gold projects in northern and southern Peru.

The company has set its sights on the Huilacollo, Esther, Yanama and Almanecer targets in the south, all of which are believed to hold potential for bulk-tonnage mining. More recently, the Vancouver-based junior acquired interests in the Chamis and Colpayoc properties in the northern district of Cajamarca.

* Chamis — To acquire this 4,349-ha property (situated south of Yanacocha, South America’s largest gold mine), Balaclava must spend US$100,000 on exploration and cash payments totalling US$2.4 million over four years. A royalty will also be paid, to be based on the amount of gold identified by feasibility studies.

The geology consists of a sequence of limestones and shales invaded by several porphyritic intrusions. Strong hydrothermal alteration and stockwork quartz veins have been identified over a 500-by-500-metre area and are coincident with a large magnetic anomaly.

Drilling tested a portion of the porphyry and returned anomalous gold values in all five holes. Results from the 1,075-metre program included 99 metres grading 0.74 gram gold per tonne and 27.3 metres of 0.86 gram gold.

The porphyry system is open to the north, east and west. Limestones to the south contain abundant iron oxides and breccias. These have not been tested thoroughly, though reconnaissance sampling has returned anomalous gold values greater than 0.5 gram gold. Drilling will resume, following a surface sampling program.

* Colpayoc — This 4,700-ha property, also south of the Yanacocha mine, is geologically similar to Chamis. To acquire a 100% interest, the junior must spend US$200,000 on exploration and pay US$3.9 million in cash over three years, as well as a royalty based on the amount of gold identified.

The target at Colpayoc is a porphyry gold system. Assay results from trenching have yielded encouraging values, including: 146 metres of 0.4 gram gold; 66 metres of 0.7 gram; and 164 metres of 0.67 gram.

A gold anomaly occurs over a 300-by-400-metre area and is open to the north, east and south. The mineralization is associated with five large magnetic anomalies, which Balaclava believes represent additional concealed gold porphyry systems. Geologic mapping and drilling are under way.

* Huilacollo — Five hydrothermal alteration systems have been identified on this 2,400-ha property: Cerro Andamarca (which measures 2 by 3 km); Cerro Colorado (2 by 1.5 km); Cerro Huilacollo (2 by 1.5 km); Cerro Santa Elena (1 by 1 km); and Cerro Soroche (1 by 1 km). All of the systems are considered similar to Yanacocha and exhibit potential as gold-bearing targets.

Previous exploration at Cerro Andamarca identified a large area of silicified hydrothermal breccias. Channel samples returned 5.64 grams gold over 25 metres and 2.03 grams over 35 metres, and one of six holes drilled in a 846-metre program intersected 3.1 grams gold over 20 metres. Values were consistently higher than 0.4 gram in all of the holes.

Balaclava intends to spend US$200,000 on sampling, mapping, trenching and camp construction. Induced-polarization surveys are also planned.

* Almanecer — The geology of this 1,978-ha target consists of a granodiorite plug (1 km in diametre), which was intruded into shales and limestones, as well as an earlier monzonitic intrusion. Gold-bearing quartz veins occur along the periphery of the granodiorite.

A 175-metre-long zone of stockwork mineralization has been mapped and sampled. Assays from trenches along the zone returned 10 metres of 1.74 grams gold, and 43.7 metres of 3.74 grams.

Also present are two areas of skarn-related gold-copper mineralization.

Trenches along these zones returned up to 0.85% copper and 0.74 gram gold over 37 metres. Geophysics, trenching and drilling are planned.

To acquire Almanecer, Balaclava must pay US$1 million over four years, including US$15,000 in the first year.

* Yanama — The junior can earn a 60% stake in this property by spending US$1 million on exploration over four years. In return, the vendor, Ro Tinto Mining (RPT-N), will receive US$420,000 in cash payments and an option to acquire 150,000 Balaclava special warrants.

The property covers a sequence of Mesozoic sandstones and shales intruded by numerous Tertiary dykes and stocks. Hydrothermal brecciation and stockwork quartz mineralization are evident in the sedimentary units.

A gold anomaly has been defined following chip sampling, which returned between 1 and 22.4 grams gold over an area measuring 800 by 1,600 metres.

Trenching, carried out by Ro Tinto, returned 0.9 gram over 25 metres, and 2.9 grams over 15 metres. Bulldozer trenching, as well as drilling, is planned.

* Esther — This 1,700-ha claim group is in the historic Pachaconas district, where gold has been mined since the colonial era.

Previous work identified 21 narrow, high-grade structures and three sub-horizontal mantos, with gold values said to be in the range of 168.3 grams.

The gold mineralization is disseminated and hosted by sandstones and limestones. Areas of hydrothermal brecciation and quartz stockworks have also been discovered on the property, and geological sampling and mapping are ongoing. Balaclava must spend US$1.4 million over 46 months in order to earn its interest.

Balaclava has 5.5 million shares outstanding (7.8 million fully diluted) and about $2 million in working capital.