Bema, Arizona Star drill Cerro Casale project

The latest deep drilling results from the Cerro Casale project at the Aldebaran property in northern Chile continue to confirm the grade and continuity of the main sulphide gold-copper porphyry body lying directly beneath the previously defined gold oxide deposit.

The Aldebaran property is owned 51% by Arizona Star Resource (AZS-V) and 49% by Bema Gold (BGO-T). Bema is Arizona Star’s largest shareholder, with a 31.5% interest.

The partners released results from seven additional deep holes, four of which intersected the main porphyry zone, while three were drilled at the edge, or outside, of the zone.

The porphyry is estimated to be 850 metres long by 300 metres wide by 750 metres deep. The body remains open to the south, southwest, north, northwest and at depth.

The potential size of the deposit, including the overlying oxide portion, is estimated to exceed 500 million tonnes, says Thomas Garagan, Bema’s vice-president of exploration. The deposit’s gold-to-copper ratio is about 2.5-to-1, one of the higher porphyry ratios in Chile.

To date, 14 of 19 deep holes have intersected the main porphyry zone. Twelve of the holes average a grade of 0.92 gram gold and 0.35% copper. If two holes, which intersected a higher-grade breccia, are included in the average, the grade rises to 1.24 grams gold and 0.4% copper.

During a conference call to mining analysts and investors, Bema President Clive Johnson commented on the 15-million-oz. estimate that is being tossed around by different analysts. “Though the project is still in its very early days, the consistent grades encountered through the porphyry body suggest it is a realistic target,” he said.

In the latest drill results, hole 34 was collared 20 metres outside the porphyry zone on the southeastern end and angled toward the northeast. It intersected 124 metres of oxide mineralization between a depth of 92 and 216 metres grading 0.68 gram gold before cutting 224 metres of sulphides grading 0.9 gram gold and 0.51% copper between 216 and 440 metres. The hole ended in unmineralized volcanics after deviating sharply to the east.

Approximately 175 metres to the northwest of hole 34, hole 36 was collared 105 metres outside the porphyry zone and angled at minus 60 towards the northeast for a total length of 1,040 metres. It intersected 28 metres of oxides grading 0.69 gram gold between a depth of 382 and 410 metres before encountering 138 metres of lower-grade sulphides between 410 and 548 metres averaging 0.61 gram gold and 0.25% copper. From a depth of 548-896 metres, hole 36 intersected 348 metres grading 0.82 gram gold and 0.31% copper before passing through the zone and stopping at 1,040 ft.

On the northwestern end, hole 35 was collared 200 metres outside the zone and drilled at a minus 60 angle towards the northeast to a total depth of 1,071 metres. The hole intersected a lower-grade edge of the primary porphyry zone, cutting 146 metres grading 0.4 gram gold and 0.27% copper between 326 and 472 metres before intersecting 544 metres grading 0.95 gram gold and 0.43% copper between a depth of 472 and 1,016 metres.

Hole 37 was collared in the centre of the porphyry zone and drilled at a near-vertical angle of minus 80 to the southwest. It returned lower-grade oxide mineralization for the first 260 metres before intersecting 98 metres of the main sulphides from 260 to 358 metres grading 0.85 gram gold and 0.43% copper. A lower-grade section between 358 and 522 metres averaging 0.47 gram gold and 0.3% copper is attributed to a series of low-grade dykes running parallel to the hole’s direction.

>From 522 to 890 metres, the hole cut 368 metres of primary mineralization grading 0.81 gram gold and 0.39% copper before bottoming in a sub-parallel dyke at 973 metres.

Hole 37 is 60 metres southeast of previously reported hole 23, which intersected 238 metres of oxides grading 0.54 gram gold and 174 metres of higher-grade breccia between 322 and 496 metres grading 1.7 grams gold and 0.23% copper.

Holes 31 and 33 define the northeastern extent of the deposit. The holes encountered unmineralized volcanic rock.

A stepout hole, 32, was collared 750 metres southwest of the zone and angled at minus 60 to the northeast. At a 628-metre depth, the hole intersected porphyry mineralization similar to that of the Main zone, grading 0.47 gram gold and 0.17% copper over 189 metres. The grade of this section was affected by localized, lower-grade blocks of volcanic rock in the porphyry.

The significance of hole 32 is that it intersected porphyry mineralization 370 metres southwest of the main porphyry zone boundary, confirming the potential to double the width of the Main zone, as first indicated by previously reported hole 30, which bottomed in porphyry mineralization 350 metres southwest of the boundary. Hole 30 intersected 382 metres grading 1 gram gold and 0.26% copper.

In a bid to accelerate drilling on the porphyry body, a third and a fourth drill rig are being added. The companies expect to complete 8-10 deep holes per month.

A total of 61,000 metres of deep diamond drilling is planned for Cerro Casale and upwards of 5,000 metres of exploratory reverse-circulation drilling is already under way on the Cerro Roman and Romancito prospects, 7.5 km north of Cerro Casale.

The partners are in the process of completing a feasibility study on the previously defined oxide gold portion of Cerro Casale, which outcrops to surface on the mountain side.

The oxide deposit was last estimated to host a minable open-pit reserve of 93.8 million tonnes grading 0.65 gram gold, based on 220 shallow holes. Plans call for a 30,000-tonne-per-day, heap-leach operation capable of producing 175,000 oz. gold per year at a cash cost of US$250 per oz.

An announcement is expected shortly on how the companies plan to proceed in the development of the oxide portion.

However, the extent of the deep-seated sulphide portion

of the deposit has Bema and Arizona contemplating a

plus-100,000-tonne-per-day open-pit operation on the sulphides utilizing milling and stand-

ard flotation techniques. The partners envisage producing more than 1 million oz. gold annually.

Preliminary capital expenditures required for putting such an operation into production are pegged at $1 billion, which may require the deep pockets of a major. At this stage, however, the jury is still out as to whether or not the project is robust enough to justify the investment.

The depth of the sulphide mineralization does not appear to concern either company, as they believe that the topography of the area will provide “attractive” projected stripping ratios to depths of beyond 1 km.