Ag Armeno plans drill programs in Ecuador

Active in Ecuador since 1985, Ag Armeno Mines & Minerals (VSE) is looking to explore several properties this year.

A 10,000-ft. drilling program will get under way soon at the Fierro Urco property, under an earn-in agreement with a subsidiary of Newmont Mining (NYSE). Newmont can earn a 60% interest in the copper-gold porphyry project from joint owners Ag Armeno and Trans Atlantic Enterprises (VSE). In return, it must fund the project through feasibility, as well as pay $5 million cash to the two companies.

Meanwhile, another 10,000-ft. program is set to commence on the Peggy property, under a joint-venture agreement with Curlew Lake Resources (VSE). That company can earn a half interest by spending $1.5 million on exploration over three years. To date, a porphyry copper-gold target has been outlned, measuring two miles long by one mile wide.

Bedo Kalpakian, president of Ag Armeno, said the company hopes to improve operations at its San Bartolome underground silver-gold-lead-zinc mine in central Ecuador. Although the mine lost money in 1993, concentrates are being upgraded.

San Bartolome ore contains deleterious minerals which result in smelter penalties, and Kalpakian expressed relief that the company is at least no longer penalized for zinc content in the concentrate.

He added that no reserve estimates have been completed recently at San Bartolome and that miners are simply chasing existing veins without blocking out higher-grade material. Prior to production, measured and indicated reserves were estimated at 94,000 tons grading 22.9 oz. silver per ton, 0.68% lead and 1.99% zinc.

The mine started production in 1991 and shut down shortly thereafter, before starting up again in June, 1992. Mill capacity is 100 tons per day, but production in 1993 averaged 60 tons per day as a result of mining difficulties.

Although final figures have not been completed, production for 1993 is estimated at 300,000 oz. silver, 200,000 lb. lead and 200 oz. gold. Operating losses for the year are estimated at $2.5 million and Kalpakian said the average realized price of silver is about US$4 per oz.