Geomaque struggles during transition

Geomaque Explorations (GEO-T) slipped into the red during the second quarter as gold production neared its end at the San Francisco mine in Mexico.

The Toronto-based junior posted a net loss of US$1.2 million (or 2 per share) on revenue of only US$1.5 million, compared with a net profit of US$561,000 (1 per share) on revenue of US$6.3 million in the second quarter of last year.

The San Francisco mine has been in leach-only mode since November 2000. It produced 5,818 oz. gold in the recent quarter, compared with 7,540 oz. in the first quarter of 2001 and 20,826 oz. in the second quarter of 2000. Rinsing of the pad is under way and production is expected to continue for another year.

Meanwhile, the Vueltas del Rio mine in Honduras produced 8,418 oz. gold from preproduction ore in the recent quarter, attaining commercial production at the end of the 3-month period. Geomaque added a large agglomerator to increase crusher throughput and is currently increasing the size of the leach pads.

During the quarter, Geomaque sold its gold production for an average of US$260 per oz., down from US$304 a year earlier.

Closer to home, in northern Ontario, Geomaque is exploring the Marathon palladium property. At last report, two prospective zones — Southern Extension and Western — had been delineated.

The Southern Extension comprises the BR and RD targets, south of the Main zone. Previous drilling on BR returned up to 4.7 grams combined platinum and palladium (Pt+Pd) per tonne over 15.5 metres. Recent prospecting and stripping have expanded the original showing to a strike length of 225 metres. Several widely spaced grab samples yielded at least 2 grams Pt+Pd.

About 500 metres to the south, grab sampling has increased the size of the RD target to 300 by 150 metres. Grab sampling there has also returned combined platinum and palladium values of around 2 grams per tonne.

The West zone is 200 metres west of the Main zone, in an area characterized by gabbros and magnetite-rich layers with platinum, palladium and copper mineralization. The zone extends across the entire 4-km length of the property.

Geomaque can earn a 60% interest in the Marathon project by spending $2.7 million on exploration over four years and paying $1 million in cash to Polymet Mining (POM-V).