Geomaque infilling cuts high grade at Tasiast

Some 20,000 metres of reverse-circulation infill drilling have allowed Geomaque Explorations (GEO-T) to update the resource estimate at the Tasiast gold project in Mauritania, West Africa.

The initial 155-hole drilling campaign focused on the Colonne Piment and South Piment zones, which comprise nearly all of the project’s previously tabled indicated resource and about two-thirds of the inferred previous resource estimate.

Tasiast’s indicated resources are now pegged at 8.3 million tonnes grading 2.3 grams gold per tonne, or 611,000 contained ounces of gold. Another 21 million tonnes running 1.8 grams gold (or about 1.2 million contained ounces) are classified as inferred resources. Both estimates are based on a cutoff grade of 1 gram gold.

Geomaque notes that the estimates do not include results form 43 of the recent holes, owing to assaying problems. Material from the holes is currently being re-assayed and will be included in an updated resource estimate due before the end of the summer. The company does not anticipate a negative impact on the overall resources.

Selected results from the recent drilling on the Colonne Piment zone include:

• Hole 344 — 33 metres (from surface) grading 4.5 grams gold, including 13 metres (from 20 metres below surface) of 9.2 grams gold, and 2 metres (from 23 m) of 32.2 grams;
• Hole 354 — 14 metres (from 106 m) averaging 9.6 grams gold, including 6 metres (from 106 m) of 18.2 grams;
• Hole 380 — 18 metres (from 42 m) running 8 grams gold, including 11 metres (from 48 m) of 12.3 grams; and
• Hole 421 — 39 metres (from surface) grading 5.3 grams gold, including 14 metres (from surface) of 9.6 grams gold, and 4 metres (from 8 m) of 20.3 grams.

Highlights from South Piment include:

• Hole 476 – 20 metres (from 88 m) grading 6.6 grams gold, including 12 metres (from 91 m) of 9.7 grams, and 2 metres (from 93 m) of 24.9 grams;
• Hole 480 – 10 metes (from 24 m) running 10.4 grams, including 2 metres (from 29 m) at 47.3 grams and another 2 metres (from 93 m) of 24.9 grams;
• Hole 504 – 25 metres (from 4 m) averaging 6 grams gold, including 1 metre (from 8 m) of 88.9 grams.

Geomaque estimates that true widths are around 90% of the drill hole lengths.

Midas Gold, a private, U.K.-based company is looking to wrap up its US$6.5 million acquisition of Tasiast from Newmont Mining (NEM-N) by the end of June. Newmont will retain a 2% net smelter royalty on gold production exceeding 600,000 oz.

Midas itself is in the midst of being acquired by Geomaque as part of a larger three-way merger deal also involving Australia-listed St Barbara Mines of Perth. Midas is controlled by Strata Mining (St Barbara’s biggest shareholder). Pending shareholder approval, Geomaque’s acquisition of Midas is slated to close by the end of June.

Under a revised deal, Geomaque and Midas would combine to beget Defiance Mining, which would be owned 50.1% by Geomaque shareholders and 49.9% by Midas shareholders (T.N.M., Apr. 14-20/03).

After the new company attains a listing on the Toronto Stock Exchange, it will negotiate a business combination with St Barbara.

A scoping study at Tasiast suggests production of around 120,000 oz. a year at an average life-of-mine cash cost of less than US$185 per oz. Initial capital costs are pegged at US$37 million; sustaining capital is figured at US$11 million.

Newmont previously pegged Tasiast’s indicated resources at 18.8 million tonnes running 2.2 grams gold. Inferred resources were put at 12 million tonnes grading 1.9 grams gold. Those figures followed closely, but did not fully comply with Australian reserve reporting codes.

Plans at Tasiast call for another 5,000 meters of reverse circulation plus 2,000 meters of diamond drilling before summer’s end. The drilling will be used to update the project’s resource estimate. Geomaque plans to complete a bankable feasibility study by early 2004.

Shares in Geomaque jumped 2.5 or more than 42% to end at 8.5 in heavy trading Toronto following the news on May 12.