Greenstone busy in Latin America

Southern-oriented Greenstone Resources (TSE) predicts that, within the next few years, it will be operating three Latin American gold mines. What’s more, each mine will have reserves in excess of 1 million oz. and annual production of more than 60,000 oz.

According to company officials, this ambitious goal will be achieved by re-directing exploration activities and aggressively pursuing opportunities in lesser-explored countries.

Instead of searching for high-grade vein deposits similar to its Oronorte mine in Colombia and Recio mine in Costa Rica, the company has set about exploring for low-grade, bulk-tonnage deposits.

Over the past fiscal year, this change in strategy has begun to pay dividends.

In October, the company commissioned its second gold mine, the Santa Rosa, in Panama. To date, about 400,000 tonnes of ore have been mined, grading 2.2 grams per tonne.

Comparisons between material mined and model estimates indicate the deposit contains 46% more gold than originally expected. If this proves to be correct and if exploration efforts in areas neighboring the two pits continue to be successful, the Santa Rosa will likely operate much longer than the original 8-year estimate. And the cash production cost will be well below the projected US$200 per oz.

Proven and probable reserves in the pits that comprise the mine stand at 12.4 million tonnes averaging 1.5 grams gold per tonne. Production for fiscal 1995 is estimated to be 30,000 oz., rising to 60,000 in the following year.

Farther north, in Nicaragua, Greenstone has optioned a 75% interest in La Libertad, a project that includes a producing gold mine. During the first six months that Greenstone operated the project, three veins — the San Juan, El Tigre and Los Angeles — yielded more than 2,800 oz. at a cash cost of US$362 per oz.

In keeping with its new focus, Greenstone is shifting its attention away from high-grade, high-cost vein deposits and towards targets that have potential for hosting low-grade, bulk-tonnage deposits.

Last year, 19 trenches were completed on the Cerro Majon target, the results of which suggest a potentially open-pit deposit of more than 500,000 oz. Bulk samples are now being taken, and a feasibility study at Cerro Majon should be ready by 1996. Greenstone predicts La Libertad will be producing 60,000 to 65,000 oz. per year by 1997.

Greenstone’s third potential mine, the San Andreas, is an advanced-stage gold exploration project in Honduras. The deposit is underlain by an epithermal quartz stockwork system hosted in conglomerates. Work this past year consisted of more than 5,000 metres of reverse-circulation drilling focused on two areas known as the Water Tank Hill zone and the newly discovered Twin Hills area.

The Water Tank Hill zone hosts proven and probable reserves of 8.6 million tonnes averaging 2 grams gold per tonne. Exploration to date at Twin Hills has outlined a preliminary drill-indicated resource of 300,000 oz. The company expects to start a large-scale operation, possibly producing upwards of 60,000 oz. per year, by as early as 1997.

The company is also conducting more grassroots exploration around key projects.

In Panama, Greenstone is exploring three concessions, including the Aguacatal concession, 20 km east of the Santa Rosa mine. The drill intersections suggest the zone has a mineral resource of 1 million tonnes averaging 2.2 grams per tonne.