Following a record year of output,
Results are available from eight of the 15 holes drilled, and all show grades and widths comparable to those currently being mined. Highlights include:
- hole 585, which intersected 21 metres (from 6 to 27 metres) averaging 2.55 grams gold per tonne;
- hole 595, which returned 4.5 metres (15-19.5 metres) grading 0.95 gram, and 12 metres (27-39 metres) of 1.53 grams;
- hole 598, which averaged 2.34 grams over 22.5 metres (16.5-39 metres); and
- hole 610, which averaged 0.93 gram over 7.5 metres (87-94.5 metres), as well as 1.26 grams over 13.5 metres (106.5-120 metres).
Holes were collared in the La Chicharra area, where previous drilling in a separate zone immediately to the northwest returned up to 3.72 grams over 18 metres. The area is 1 km west, and along strike, of the San Francisco deposit, where reserves stand at 18.7 million tonnes grading 1.03 grams gold.
Most of the holes were drilled to depths of 70 metres or less, with hole 610 extending to 120 metres. That hole ended in mineralization, which was cut by a fault.
Mineralization occurs in multiple lenses and remains open along strike and downdip. A follow-up program is planned.
Meanwhile, Geomaque continues to benefit from an expansion program completed in 1997. Production in 1998 topped 59,153 oz. (the highest yet) and cash costs averaged US$261 per oz., which is US$9 more than in 1997, when 53,150 oz. were produced.
Miners placed 3.2 million tonnes of ore on the leach pads, or 800,000 tonnes more than in 1997. Head grades remained unchanged, but the cash cost per tonne of ore mined decreased to US$5.48 from US$5.96.
Despite the improvements, Geomaque incurred a loss of US$163,000 in 1998, compared with a profit of US$1.6 million in the previous year. Cash flow dropped to US$2.7 million from US$4.4 million, whereas working capital soared to US$9.3 million from US$2.5 million.
The recent year’s results include US$287,000 in foreign exchange losses and US$77,000 in writedowns on deferred exploration expenses. Furthermore, the company received only US$339 per oz. for its production, compared with US$368 in 1997.
Production in the three months ended Dec. 31, 1998, topped 16,016 oz., or 19% more than that of the year-ago period. A record 908,000 tonnes of ore were crushed and placed on the leach pads, resulting in a 17% decline in cash costs to US$250 per oz.
Geomaque’s other major project is Vueltas del Rio in Honduras, where development continues unabated. Construction of the leach pads and ponds is expected to be completed in the coming weeks, with the first gold pour projected for December.
At last report, Vueltas del Rio hosted reserves of 5.1 million tonnes grading 2.5 grams gold. These will be mined by open-pit methods at an average stripping ratio of 3.4-to-1.
Based on the independent feasibility study, capital costs will top US$14.4 million, with payback expected within 29 months of startup. Annual production is anticipated at 60,000 oz., with cash costs pegged at US$169 per oz. This would increase the company’s cumulative output to 130,000 oz. annually and lower its average costs to US$220 per oz.
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