Great Lakes advances Lluvia de Oro

Development of a second gold deposit is in the works for Great Lakes Minerals (TSE).

With cash flow expected by year-end from its 20%-owned Grouse Creek gold mine in Idaho, the company has commissioned a prefeasibility study on the Lluvia de Oro gold project in Mexico’s Sonora state.

The study, being compiled by engineering firms Scotia Corp. and Westac Inc., will provide Great Lakes with information regarding engineering design, as well as cost projections for the construction of an open-pit, heap-leach gold mine at Lluvia de Oro. The study is expected to be completed by year-end; construction is to follow, and startup is anticipated for September, 1995. The site-permitting process is under way, in conjunction with the engineering study.

Great Lakes President Nicholas Tintor envisions a 30,000-oz.-per-year operation, with costs in the range of US$200-220 per oz. He estimates that for an operation this size, the capital cost will be in the order of US$5 million.

Development should help propel the company towards its production target of 100,000 oz. gold per year. Great Lakes’ 20% share of production from Grouse Creek is projected to be 20,000 oz. gold and 180,000 oz. silver per year. These figures are expected to increase when the company ups its interest in the project to 30%.

Since acquiring the 589-hectare Lluvia de Oro property last year, the company has drilled 80 drill holes and established reserves of 3.8 million tonnes grading 1.2 grams gold per tonne in the main El Creston zone. Mineralization at El Creston is shear-hosted and consists of oxidized gold in sediments. The zone, which is tabular and relatively flat-lying, is open in all directions.

Column leach tests on minus-25-mm material, and on two finer crush sizes, have yielded gold recoveries in excess of 80% in 60 days. Great Lakes has initiated additional testing on coarser crush sizes of minus-50-mm and minus-75-mm material, after initial studies indicated that this run-of-mine crush size will likely yield gold recoveries above 70%.

Trenching has extended the strike of the Creston mineralized zone by more than 200 metres to the southwest. Trenches TR-17 and TR-18, which are outside of the current open-pit reserve contour, returned 42 metres grading 0.4 grams gold and 54 metres at 0.6 grams, respectively.

A 4,000-metre drill program, designed to infill between sections of El Creston and further explore the strike potential of the zone, is under way. Several other targets will also be tested.

In addition, Great Lakes is undertaking condemnation drilling to locate barren areas for leach pad and plant locations.

The Lluvia de Oro property is subject to a 3% net smelter return royalty, which was sold to Repadre Capital (TSE) for $250,000. The royalty will be on all mineral production from properties comprising the Lluvia de Oro project. In other news, results are soon expected from a 15-hole drill program on the Palmarito gold project in Sinaloa state. The drilling was carried out to test a portion of a 4-km-long mineralized deformation zone.

Meanwhile, in Michigan, a Canadian mining company has entered negotiations to jointly develop Great Lakes’ 543-S copper project. The deposit contains proven and probable reserves of 1.3 million tons grading 4% copper.