Drills gear up on Mindoro grass roots

Australia’s Newcrest International has launched a 1,200-metre drilling campaign on Mindoro Resources‘s (MIO-V) Tiris project in Sumatra, Indonesia.

The first hole has been collared at the southern end of the Harimau prospect to test a broad gold-in-soil anomaly measuring about 600 metres by 400 metres. The hole is one of two designed to test stockwork gold-silver mineralization and look for a mineralized conduit.

Another four holes are planned to test an interpreted 2,800-metre-long, east-northeast structure for potential bonanza-grade epithermal mineralization. The program is expected to run about six to eight weeks.

Under a deal signed in June, Newcrest, the operator, can earn a 75% interest in the project by funding US$2.7 million worth of work over six years.

If Newcrest acquires a 75% stake, Mindoro must convert its stake to a 2.5% net smelter return royalty (NSR) or begin covering its pro rata share of expenditures. In the event the former option is taken, the royalty (in respect to gold only) increases to 25% if spot prices exceed US$350 per oz. for any given quarter.

The Harimau prospect is a very large and strong low-sulphidation, epithermal gold-silver system. It contains multiple zones of low-grade, stockwork gold-silver mineralization. The system has been defined over an area that measures about 2 km by 5 km. Gold grades from outcrops across the area range up to 1 gram per tonne and grades from floats range up to 10.6 grams per tonne. Silver values run up to 520 grams.

Meanwhile, in the Philippines, a program of induced-polarization and ground magnetics has been completed on the 10.8-sq.-km Pan de Azucar gold-copper project on the island of Panay. The results suggest two distinct sulphide-rich systems, which are separated by about 750 metres.

The Valderama Hill zone exhibits strong high-chargeability and low-resistivity values and correlates with previously defined gold and copper soil anomalies. The shallow, flat-lying zone averages 50 metres in thickness and 200 metres in depth. There are indications of extension for more than 1.6 km. Previous grab samples returned up to 2.3 grams gold per tonne. Previous hand augering yielded up to 6 grams gold.

The moderate chargeability and high resistivity values at the Asparin Hill zone suggest a considerable depth extent. Mindoro believes the zone may represent part of a porphyry copper-gold system, the top of which lies less than 100 metres below surface. The zone remains open in all directions.

Australia-based Delta Gold can earn a 45% interest in Pan de Azucar by spending A$4.5 million over four years. The junior can boost its stake by 10% by completing a bankable feasibility study within the following three years. It can acquire another 10% by paying half of the gross value of the reserves outlined by a minor Philippine partner.

Assuming that all goes as planned, Mindoro would be left with a 25% participating stake, which can be converted to a 2% NSR. The company is expected to relinquish its position as operator during the first year of the agreement.

Since 1997, Mindoro has outlined a 2-by-2-km area of alteration and mineralization indicative of a high-sulphidation gold-copper system.

Beginning in early August, 800 metres of drilling will test both targets.