BASE METALS SPECIAL — Samex targets porphyry copper-gold prospect at Santa Isabel property in southern Bolivia

A combination of favorable features — widespread alluvial gold, the presence of numerous small mines, and reports of secondary copper mineralization — have lured Samex Mining (SXG-V) to the Santa Isabel area in southwestern Bolivia.

The project area covers 4,354 hectares along trend of the Argentine tectonic porphyry belt. Samex is investigating the potential of the property to host tonnages of copper, zinc, silver and gold comparable to the large copper porphyry deposits in Chile and Argentina.

The property is 105 km by road, west of Tupiza, and 150 km east-southeast of the rail station of Chiguana.

The Vancouver-based junior has drilled a fence of seven widely spaced drill holes across a 2-km portion of a porphyry copper-gold target that was defined by geological mapping, geochemistry and geophysics. A further seven drill pads have been prepared and Samex has begun drilling its eighth hole.

The program is part of a US$1.1-million work commitment, which lasts until April 1997.

In 1995, the company changed its name to Samex from Paragon Resources, and its exploration focus to minerals from oil and gas. It then acquired South American Mining & Exploration, a private company with an extensive portfolio of Bolivian gold, silver and base metal properties with bulk-tonnage potential.

The Santa Isabel project is just one of eight that Samex holds in Bolivia. It lies on the northern side of the Bonete caldera covering a well-mineralized dacitic volcanic-porphyry intrusive complex with a diameter of 5 km.

Broadly disseminated sulphide mineralization, traced over 8 sq. km, lies within a propylitic alteration zone of more than 10 sq. km.

Induced-polarization geophysical surveys have defined three target zones beneath the overburden-covered floor of a broad physiographic bowl. Ridges surrounding the bowl area are dotted with extensive old mine workings, which focused on high-grade base metal veins. Surface elevations of the prospect area range from 4,260 to 5,180 metres. The targeted zones lie below the 4,390-metre elevation.

With the broad halo of anomalous arsenic, zinc and silver, and the high-grade nature of the sulphide veins and breccia, Santa Isabel is believed to have the earmarks of a well-mineralized porphyry system.

The wall rocks in many of the old mine workings are typically coated with copper oxide plus copper sulphate and carbonate.

Channel sampling in the Vera Cruz workings yielded 0.1-0.4% copper over 80 metres and 0.7% copper over 15 metres. Extensive mapping of the workings indicates a zoning in the metal disposition.

These copper values occur at elevations of more than 100 metres above the targeted area, suggesting the potential for significantly higher grades.

Pointing to placer gold workings in drainages of the prospect area, Samex believes the porphyry target could also host a substantial gold credit, suggested as well by wallrock geochemistry.

The first hole of the preliminary 7-hole program was drilled on the southern periphery of the targeted area. It intersected an intrusive igneous breccia grading 1.57% zinc over the entire 334.5-metre length of the hole, including 173.4 metres grading 2.67% zinc. Anomalous values of lead, silver, copper and gold were also recorded.

Samex says the zinc mineralization encountered in hole 1 is typical of base metal zoning of a mineralized porphyry, consisting of a halo of zinc-rich disseminated sulphides and veinlets

directly adjacent to, or surrounding, a copper-rich core.

Assay results for holes 2 and 3 are expected shortly.

Samex has 17.2 million shares outstanding, or just under 21.1 million shares fully diluted, and a working capital of $2.3 million.