Vancouver — Since the announcement of the merger in March, Nevada-based Glamis Gold (GLG-T) and Francisco Gold (FGX-V) have worked together to compete a feasibility study for the El Sauzal project in Mexico as well as define an exploration program for the Marlin property in Guatemala.
“We are extremely pleased with the overwhelming support shown by Francisco’s shareholders in approving the merger and look forward to implementing our aggressive development schedule for El Sauzal, as well as an accelerated exploration program at Marlin,” said Glamis President and CEO, Kevin McArthur. “We believe both projects offer enormous potential value to Glamis. Both are expected to be significant contributors to our Latin America growth strategy.”
AMEC has completed a feasibility study on the El Sauzal gold deposit. The results are as follows:
- Proven reserves weighed in at 7.0 million tonnes grading 3.72 grams gold per tonne
- Probable reserves tallied to 11.5 million tonnes averaging 3.24 grams gold per tonne
- Total reserves are 18.5 million tonnes averaging 3.37 grams gold per tonne, or 2.0 million contained oz.
- Stripping ratio (waste:ore): 1.3:1
- Gold recovery rate: 95%
- Initial capital: US$101 million
- Total cash Cost: US$114 per ounce
- Total cost: US$232 per ounce ( incl. 100% of acquisition cost)
- Annual production Rate: 173,000 gold ounces
- Life of project: 11 years
- IRR (US$300 Gold): +20%
Glamis reports detailed baseline studies have commenced and applications for permits are well underway. Infrastructure and project design optimization work has also been initiated and is expected to be competed later this year.
Meanwhile, Glamis states that the Marlin project in Guatemala, will receive significant investment during the remainder of the year. The Main Zone at Marlin has been traced along a strike length in excess of 2 km yet only 500 metres of its length has been drill-tested. In addition several other parallel systems have been discovered but as of yet have not been tested. At last report, 72 core holes have been drilled on the property.
Measured resources weigh in at 4.2 million tonnes grading 1.94 grams gold and 29.33 grams silver per tonne. Indicated resources are pegged at 8.6 million tonnes grading 1.46 grams gold and 22.22 grams silver and inferred resources are 14.1 million tonnes grading 1.09 grams gold and 11.49 grams silver.
The Main Zone strikes east-west and dips to the south. The zone still remains open to the east, west and south. Glamis states that a number of targets outside of the Main Zone, including the Los Cochis, Cancil, Ajel, and La Cienega zones have been identified and are now ready to be drill-tested. A drilling program, budgeted at US$3 million is now underway to further delineate the main zone as well as to the other targets.
The drilling campaign will occur in three phases. Phase 1 which is now underway will consist of 3,000 metres of core drilling in 15 holes and 2,000 metres of reverse circulation drilling in 15 holes to test the deep Main Zone, Los Cochis, Cancil, Ajel and other targets. Phase 1 is expected to last for three months.
The second phase will consist of up to 2,000 metres of core drilling in 10 holes and 10,000 meters of reversecirculation drilling in 50 holes. Phase 2 will test the continuity of mineralization at the Main Zone and define its limits. This phase is expected to last six months.
Phase 3 will consist of 15,000 meters of reverse circulation drilling in 75 holes and will in-fill the Main Zone to upgrade resources to reserves. Phase 3 is expected to be completed before June next year.
Glamis expects that synergy with its wholly-owned Cerro Blanco project, which is also in Guatemala, will facilitate the quick development of mining operations at Marlin which is expected to be at the feasibility stage by mid 2003.
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