Eldorado fights Glamis bid

An unsolicited takeover offer by Glamis Gold (TSE) does not appear to have diverted Eldorado’s (TSE) attention from its joint-venture projects nor from its mining operations in Mexico’s Sonoro state.

With the deadline for the takeover bid looming, Glamis is holding firm on its original offer to acquire all of the common shares, 8.25% convertible debentures and special warrants of Eldorado. Eldorado’s board has rejected the bid as “inadequate” (T.N.M. July 3/95).

While the corporate drama unfolds, Eldorado is continuing step-out drillings to expand the resource at its Colorada open-pit, heap-leach gold mine. Drilling in the Creston area returned selected intervals of 243 ft. of 0.054 oz. gold per ton for hole ECR-153, 118 ft. of 0.022 oz. for ECR-155 and 157 ft. of 0.023 oz. for ECR-161.

Significant intersections in the Creston Extension included 52 ft. of 0.023 oz. for hole MPR-63, 125 ft. of 0.048 oz for MPR-68, 92 ft. of 0.055 oz. for MPR-60 and 40 ft. of 0.081 oz. for MPR-64.

The Gran Central area yielded selected values that included 72 ft. of 0.023 oz. for hole GCR-79, 302 ft. of 0.034 oz. for GCR-80A and 111 ft. of 0.054 oz. for GCR-82.

Drilling in 1994 increased Colorada’s resource base from to 1.3 million contained ounces from 260,000 oz. Proven and probable reserves for the Creston and Gran Central deposits total 20 million tons grading 0.033 oz., with an additional possible resource estimated at 20 million tons averaging 0.033 oz.

Gold production for 1995, the second full year of operation, is projected to increase to 30,000 oz. at a cash operating cost of US$189 per oz.

Meanwhile, negotiations for a joint-venture partner for Eldorado and HRC Development’s (VSE) 50-50 owned Andes project in Argentina have concluded with an agreement with Cameco (TSE).

By incurring a minimum exploration expenditure of US$8 million, making a partial reimbursement payment totalling US$1 million and delivering a bankable feasibility study within five years, Cameco can earn a 51% interest in the Laguna Verde property. The Laguna Verde forms the northern portion of the Andes project, including the Nordin zone.

HRC will act as operator for the initial stages of the exploration program, which will focus on drilling the Nordin zone, a gold porphyry system where previous trenching returned values of up to 0.032 oz. over 285 ft.

In other news, a preliminary agreement with Treminco Resources (TSE) grants Eldorado the option to earn an initial 51% interest of the Magistral property in Mexico’s Sinaloa state.

The agreement, subject to due diligence and regulatory approval, calls for expenditures of $1.5 million over 30 months. By electing to fund a feasibility study, Eldorado can earn a further 19% interest and, at any time, purchase Treminco’s remaining interest for $5 million.

Eldorado is also required to undertake a private placement of 400,000 units of Treminco at a price of 25 cents per unit. Each unit will consist of one common share and one non-transferable warrant, entitling the purchase of one additional share at 45 cents for up to one year.

Earlier trenching by Treminco focused on testing widespread copper oxide mineralization at El Magistral within the core area of a porphyry system. Significant results included: 1.07% copper over 100 ft. for trench 3; 0.61% copper over 360 ft. for the trench 3 extension; 0.82% copper over 150 ft. for trench 4; and 1.05% copper over 390 ft. for trench 5.