Ariel No. 1 gold producer in Costa Rica

With the Matapalo mill approaching its 300-ton-per-day capacity, Ariel Resources (VSE) is Costa Rica’s largest gold producer.

The company produced 9,413 oz. in the fiscal year ended Sept. 30, 1993, and 2,697 oz. in the first quarter ended Dec. 31, 1993.

Although a net loss of US$312,000 was posted for the year, cash flow (after changes in working capital) was positive at slightly more than US$1 million. Ariel owns two underground mines within trucking distance of the mill, near the Pan-American Highway.

The Tres Hermanos mine, 7.5 miles from the mill, contains proven and probable reserves of 300,000 tons grading 0.23 oz. gold per ton. All the 18,795 tons processed in 1993 came from this operation and averaged 0.16 oz. (Considerable development work was done on the seventh level and, as a result, head grades were lower than the reserve average.)

The other source of mill feed is the San Martin mine, next door to Tres Hermanos and 9 miles from the mill. Proven and probable reserves there are estimated at 320,000 tons grading 0.23 oz.

Gold production from the two projects in fiscal 1994 is expected to total 15,000 oz. at a production cost of US$206 per oz.

San Martin also contains a bulk-tonnage target which is estimated to contain 4.3 million drill-indicated tons grading 0.064 oz. Ariel has been talking to third parties regarding a possible joint venture on this bulk-tonnage portion. Alternatively, it may go it alone by raising funds through an equity issue.