Geomaque ups Marathon estimate

Drilling and core sampling by junior gold producer Geomaque Explorations (GEO-T) has upped the resources estimate at the Marathon palladium project in Ontario.

Marathon’s total measured and indicated resource now stands at 21.3 million tonnes grading 1.32 grams per tonne palladium, 0.34 gram platinum, 0.12 gram gold and 0.4% copper, or 904,000 contained ounces palladium and 235,000 contained ounces platinum. Another 8.2 million tonnes of inferred material averages 1.24 grams palladium, 0.32 gram platinum, 0.12 gram gold and 0.4% copper.

That’s up from a total measured and indicated resource of 22.3 million tonnes grading 1.18 grams palladium, 0.29 gram platinum, and 0.35% copper, or 847,000 contained ounces palladium and 208,000 contained ounces platinum estimated in April. Inferred resources at that time were pegged at 7.9 million tonnes running 1.14 grams palladium, 0.29 gram platinum and 0.36% copper. Gold grades were not reported.

Geomaque notes that of the current estimate, 86% of the total measured and indicated platinum group metals above the 0.8-gram-palladium cut off grade are within 150 metres of surface.

The increase in higher-grade material is thanks mostly to the definition of two principal higher-grade lenses in a continuous and extensive envelope of lower grade mineralization. The best grades are found in the hanging wall zone, which extends for more than 1 km in the northern portion of the property. The zone ranges in thickness from 10 to 65 meters when it merges with the footwall zone. The footwall zone occurs near the contact of the host gabbro and the country rock. Further drilling is required to define the zones.

The company says there is opportunity to expand the resource with further drilling, and additional work has extended favourable geology and mineralization in the contact zone for an additional 1.5 km south of the resource area. A series of channel saw cuts in the BR zone returned 12.8 metres grading 1.31 grams palladium, 0.37 gram platinum, 0.23 gram gold and 0.36 % copper in a lower grade envelope. Results from two holes 25 metres north of the cut returned similar results.

Geomaque can earn a 60% interest in the Marathon project by spending $2.7 million on exploration over four years and paying $1 million in cash to Polymet Mining (POM-V).

On the financial front, Geomaque says it is continuing to work with its principal lender, Denver-based Resource Capital Fund II, on the restructuring of its credit and security arrangements.

RCF II has granted Geomaque an extension to November 6, 2001, to finalize the terms of the restructuring, and in the meantime has deferred all payments required under the credit agreement.

Geomaque’s financial restructuring recently took a significant step as three trade creditors agreed to take shares in payment of debts. RCF II transferred an outstanding warrant to the three creditors, who exercised it to receive 17.4 million shares of Geomaque. The exercise price, US$825,000, was applied against debts.

One creditor, equipment distributor Butler Machinery, will also get any proceeds beyond US$500,000 from the sale of equipment from Geomaque’s San Francisco gold mine in Mexico, and receive a 1% net smelter return on any production from unmined parts of the main San Francisco pit. The deal clears off Geomaque’s debt to Butler.

Mining contractor Sococo de Costa Rica, which was owed about US$2 million, agreed to a schedule for payment of the balance of the amount owing. Financial advisor Haywood Securities took shares in exchange for reducing the amount Geomaque owes it.