LATIN AMERICA — Arauco plans drill programs for two Chilean

While still in the private company stage, Arauco Resources (VSE) acquired 100% of 21 mineral properties in southern Chile. They include potential bulk minable gold properties as well as disseminated copper and massive sulphide targets.

The newly listed company plans to drill two of the projects, Barba Rubia and Joya, by mid-1993. Arauco geologist Patrick Burns said the hydrothermal system exposed at the Barba Rubia property has characteristics associated with bulk-tonnage epithermal gold deposits in Nevada.

The property is considered to have potential to host a low-grade, bulk-minable gold deposit, as well as narrower vein zones of higher-grade material. The first phase of this year’s work program is aimed at defining targets for the second-stage trenching and drilling program. A quartz vein system with gold values was identified at the nearby Joya property which, like Barba Rubia, is easily accessible by road. This project has potential for development of economic gold grades over moderate to substantial widths (10-15 metres), and is considered to have similarities to the Blackdome gold deposit in British Columbia.

Arauco plans to establish the width and grade of the better vein shoots by trenching and detailed rock chip sampling, and then test the downdip continuity and grade by a series of diamond drill holes.

Arauco has an office in Santiago, and is backed and funded by major shareholders International Northair Mines (VSE), Rea Gold (TSE), St. Mary Minerals of Denver, Princeton Mining (TSE), Teck (TSE), and Hunter Exploration Group.

Teck has the right, upon completion of a preliminary feasibility study by Arauco, to provide or arrange production funding on any of Arauco’s portfolio properties.

Some early-stage exploration will continue on the remaining projects in Chile, and the company may take on joint venture partners for some of these projects. Arauco is also involved in a grassroots exploration project with the University of Chile and the Interamerican Development Bank aimed at exploring a poorly understood and underexplored area of southern Chile. The company also plans to review the acquisition of mineral properties in neighboring Argentina.

“Deals are tough and prices are high in Chile,” Burns said. “We’ve identified several prospective areas of interest in Argentina, where we think we can get more pop for our peso.”