The recent discovery of a second significant gold deposit at the San Martin project in central Honduras might cause
Construction had been scheduled to begin in November 1999, but Glamis may find it requires more time to carry out engineering and design work for the proposed mine.
“The project scope has increased considerably,” states Stephen Baumann, vice-president of Latin American operations. “Modifications to the feasibility study, to account for increased production rates, are now under way.” The final study, which is being prepared internally, will address the discovery of additional ore types.
The project’s cornerstone is the Rosa deposit, a hot-springs epithermal gold deposit that blankets a low-lying domal hill, and the nearby Palo Alto zone.
The Rosa deposit hosts a proven and probable oxide reserve of 20.9 million tonnes grading 0.9 gram gold per tonne, equivalent to 605,000 contained ounces. The waste-to-ore stripping ratio is a low 0.18-to-1. A gold price of US$300 per oz. was used to calculate the reserves. The recent drilling of 13 reverse-circulation (RC) holes on the southeastern end of Rosa indicates the deposit remains open in this direction.
Recent drilling on the nearby Palo Alto zone nearly doubled the contained resource to 830,000 oz. Prior to this drilling, Glamis had envisioned the San Martin project as an open-pit, heap-leach operation capable of producing 60,000 to 75,000 oz. per year over a mine life of 10 years. A prefeasibility study indicates cash costs will fall below US$150 per oz., and gold recovery is expected to average 65% using run-of-mine leaching.
Capital costs are not expected to exceed US$18 million, and the total cash cost is projected to fall below US$200 per oz. Glamis hopes to minimize capital costs by transferring mining equipment and miscellaneous infrastructure from its depleted Picacho mine in California, which is undergoing reclamation.
The Palo Alto zone is 700 metres west of the Rosa deposit. Since November 1998, Glamis has drilled more than 65 RC drill holes into the Palo Alto zone.
Highlights from recent drilling include:
- 35 metres of 1.93 grams gold per tonne, starting at a down-hole depth of 32 metres in hole 17;
- 32 metres of 1.08 grams, starting at a depth of 8 metres in hole 26;
- 43 metres of 0.79 gram, starting at a depth of 61-104 metres in hole 39;
- 60 metres of 1.07 grams, starting at a depth of 53 metres in hole 46;
- 60 metres of 1.13 grams, starting at a depth of 15-75 metres in hole 51;
- 85 metres of 1.41 grams, starting at a depth of 75-160 metres in hole 63; and
- 50 metres of 0.92 gram, starting at a depth of 12 metres in hole 68.
Drilling to date at Palo Alto has defined a resource of nearly 46 million tonnes grading 0.56 gram gold. Based on a gold price of US$300 per oz., the minable resource is projected at 23 million tonnes grading 0.72 gram, equivalent to 530,000 contained ounces. The stripping ratio is pegged at 0.66-to-1.
A 45-hole program of infill drilling will attempt to bring this resource into the proven and probable category. The program will include large-diameter core holes for metallurgical and density testing.
The Palo Alto zone contains two distinct ore types: a blanket of altered schist material that has similar leaching characteristics as the Rosa deposit; and a high-angle, high-grade structure consisting of harder material.
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