Greenstone bullish on La Libertad

During the past two years, Greenstone Resources (TSE) has been negotiating to secure a position in a producing gold mine within a prospective mineral district of Nicaragua. These negotiations came to fruition in late August when the Toronto-based company signed agreements to earn a 75% interest in the La Libertad mine and surrounding concessions.

Greenstone will take over as operator and begin work to ensure that the existing mine, currently producing about 5,000 oz. yearly, is on a solid financial footing. At the same time, it will explore the entire land package in an effort to increase reserves so that the operation may expand. “We are thrilled about the agreement as it provides for a 75% interest, rather than the 37.5% we initially planned to acquire,” said Greenstone President Peter Bojtos. “The property also has multi-million-ounce potential and could be a company-maker.”

The transaction will also expand the company’s presence in Central America. Greenstone currently operates the Oronorte gold mine in Columbia, is constructing the Santa Rosa gold mine in Panama and operates numerous exploration projects in these and other Central American countries. La Libertad will be held by a Nicaraguan company (MINISA) owned 75% by Greenstone and 25% by the mine workers. Greenstone’s ownership will be vested over the next several years once it provides funds totaling US$5.5 million and issues about 450,000 shares.

The mine workers will have representation on the operating company, and Greenstone expects to have a positive working relationship with its co-owners. “Equity membership should provide mine workers with a strong motivation to see that this project is a success,” Bojtos said. The existing operation is accessible by road and features a series of open pits and a 150-tonne-per-day mill. Proven and probable reserves, as previously calculated by others, contain 0.5 million oz. gold (4.17 million tonnes at 4.6 grams gold per tonne). A further 0.5 million oz. are present in the possible category.

Shear-hosted epithermal gold mineralization is related to a swarm of east-west faults that have been tensionally opened and filled with heavily weathered quartz veins, veinlets and stockworks. The near-surface epithermal gold mineralization is said to be widespread on the concessions, which comprise 120 sq. km.

“We’ve identified at least 20 target areas cents which have] the same geological features as the known reserve area,” Bojtos said. “We have to present a feasibility study for an expanded project within a year, though we have provisions for extensions, if they are required.”

The president added that the study will be geared towards a mine that can produce not fewer than 50,000 oz. annually, “although this cents figure] will depend on exploration.” In the meantime, the company plans to carry out environmental baseline studies, as well as geotechnical and metallurgical work.

Nicaragua, like many other countries in Central America, has taken steps to attract foreign investment as a means of revitalizing its economy. While changes to liberalize the economy are coming slowly, progress is being made and several North American mining groups have acquired projects in the country. Bojtos said Nicaragua has a mining heritage as well as a good mining code and land tenure system.