Drills turn at Cuya project

Vancouver — APAC Minerals (APC-V) reports that partner Patagonia Gold has recently kicked off a 5,500 metre (24 hole) drill program on the low-sulfidation epithermal gold property in the Rio Negro province in Patagonia, Argentina.

Through its 51%-owned Argentinean company, Arminex, (which APAC has the right to purchase the remaining 49%), APAC holds the 83 sq.-km Cuya property and the 89 sq. km El Puesto property, both are situated in the Los Menucos district.

Joint venture partner, Patagonia Gold, is 50% owned and managed by HPD Exploration, a British company listed on AIM in London. The current management team of HPD Exploration previously ran Brancote Holding, which found and developed the Esquel gold deposit in the neighbouring province of Chubut.

Patagonia Gold is required to spend a total of US$1.5 million over two years, half of which must be spent on drilling of the Cuya prospect within the first 6 months of 2003. Once vested APAC, a joint venture partnership will be established. If APAC decides not to contribute its share of future expenditure after the first $1.5 million has been spent, Patagonia Gold has the right to earn another 30% by spending US$2 million more over the following 2 years.

Mineralization in the Los Menucos gold district occurs in felsic intrusives and breccias, and appears to be related to east-west and north-south trending fault systems. The Cuya property hosts low grade, low sulphidation, and epithermal gold mineralization exposed over an area measuring 1-by-1.5 km and which is hosted in silicified rhyolite breccia and tuffs.

Meanwhile in China, APAC has completed its due diligence on the Nibao Gold project in the western part of Guizhou province, south China. Subsequently, the company will create a joint venture with its partner, Guizhou Bureau of Geology and Mineral Resources (BGMR).

According to the agreement, APAC will earn a 70% equity interest in the joint venture company by investing US$2 million over 3 years. This includes the money spent to date on due diligence. APAC can earn an additional 14% equity interest by bringing the property up to development stage.

The property hosts widespread, disseminated gold mineralization that has been traced on surface for over 4 km along strike and ranges up to 1 km in width. Gold mineralization is hosted in thinly-bedded limestone, shale and partly silicified tuff. BGMR has explored the property near surface with large number of pits, trenches and eight shallow drill holes.

The largest mineralized zone identified by BGMR measures 1,500 metres along strike and 500-to-600 metres along dip, with a typical thickness of 3-to-10 metres. This zone hosts grades up to 7.5 grams per ton. The company will release an updated report and a proposed exploration program next week.