EXPLORATION ’99 – General Minerals resumes drilling at Escalones

With warmer temperatures prevailing in the high Andes of central Chile, General Minerals (GNM-T) is set to resume drilling at the Escalones copper-gold property, 100 km southeast of Santiago.

The company expects to spend US$2.5 million on exploration in the coming year, with plans calling for up to 15 core drill holes spanning 5,000 metres.

As soon as it finishes clearing away snow at altitudes above 4,000 metres, General Minerals will begin drilling, with results slated for sometime in January.

Exploration crews will target the downdip, easterly extension of the Escalones Alto skarn mineralization discovered last year.

The first hole of the 1998 program encountered 125 metres of mineralization grading 0.77% copper and 0.15 gram gold per tonne, plus anomalous values of silver and molybdenum. In all, the company intersected the skarn in three holes over a strike length of 800 metres and a vertical extent of 850 metres.

Asarco (AR-N) will fund this year’s program as part of a joint-venture agreement signed earlier this year. General Minerals will continue managing the work, though Asarco has the option to take over.

Asarco is earning a 60% interest in the property by funding exploration through to the feasibility stage. (Mexico’s largest mining company, Grupo Mexico, recently completed its merger with the New York-based company.)

After completing the feasibility study, Asarco must also pay a US$5-million bonus to complete the buy in.

Elsewhere in Chile, General Minerals has completed an induced-polarization (IP) survey on the Productura property, demonstrating a positive correlation between anomalous geophysical values and copper-gold intervals in previous drill holes.

The company will spend US$50,000 to expand its IP survey along anomalous zones in preparation for drilling. It is seeking a joint-venture partner, now that Teck (TEK-T) has nixed its option on the property.

Meanwhile, metallurgical tests are under way on the Vizcachitas copper porphyry, 80 km northeast of Santiago. Results from column testing should be available in December. Flotation tests have produced concentrate grades as high as 37% copper, above the 29.6% estimated in a previous prefeasibility study. Cash costs are expected to be as low as US50 cents per lb.

In Bolivia, the company has begun extensive underground drilling at the Atocha silver property. Previous intercepts include a 3-metre interval grading 3,411 grams silver per tonne. The company is also considering mining high-grade silver mineralization at the property in the next several months. It expects to be able to pull as much as 50 tonnes of high grade per day, which would be trucked 85 km to Oruro for custom milling. The underground drilling is budgeted at US$100,000 per month.

Farther afield, in northwestern China, the company expects to sign a final joint-venture agreement regarding the Towerbeck gold project. General Minerals is still negotiating the final percentage it can earn in that project.