Greenstone extends gold zone on Panama property

The first two holes drilled by Greenstone Resources (TSE) on the company’s 49% owned Santa Rosa gold property in Panama have intersected encouraging results including 249 ft. grading 0.12 oz. gold per ton. That intersection came from the second of two recent stepout holes that probed a southeast extension to the Alto de la Mina zone where some 2.59 million tons of reserves grading 0.065 oz. gold were outlined by previous work.

The first stepout hole, drilled in the Alto de la Mina area, yielded 100 ft. of 0.12 oz. gold including a high-grade interval of 36 ft. of 0.26 oz. gold.

Greenstone is operator of the Santa Rosa project in partnership with 51% owner Boliden International Mining of Sweden. Boliden and Greenstone hold the property through a Panamanian subsidiary known as Minas Santa Rosa.

According to President Ian Park, the recent intersections will likely result in an increase to the property’s overall reserves of 12.5 million tons grading 0.061 oz. gold. That total includes some 9.8 million tons of minable reserves grading 0.06 oz. gold in the nearby Santa Rosa deposit. The latter hosts nearly 90% of the property’s known reserves to date.

“We fully expect to increase the project’s reserves with our definition drilling program, and we could possibly double reserves at the Alto de la mina zone,” said Park.

Jim Jack of Boliden International Mining also says there is good potential for expanding the ore reserves at Santa Rosa.

Park is especially encouraged by the fact that a significant target remains to be explored between the two known open pit deposits. One diamond drill is now probing the area between the Alto de la Mina and Santa Rosa open pit zones, he said.

The project is currently in the predevelopment stage with the next step being to complete a formal feasibility study by mid-summer, said Park.

Before Greenstone began the current US$1.7-million feasibility study and exploration program, reserves for the Santa Rosa property are reported as follows: 0211,0006,0210,0007,0111,0006,0203, Tons Oz./ton Oz. Santa Rosa 9,833,000 0.060 590,000 Alto 2,593,000 0.065 169,000

Park said Santa Rosa has the potential to support annual production of nearly 100,000 oz. per year by early to mid-1992. One favourable factor for the project is the fact that environmental permitting has already been completed and capital costs may be lower than expected if contract mining is used, he said.

Total capital costs for the planned open pit, heap leach mine were originally forecast at US$25 million, but Park said the company is now considering the use of a mining contractor that could reduce capital costs to the US$12-15 million range. The contractor would provide all the necessary trucks and mining equipment as well as constructing the heap leach pads.

Meanwhile, in the Antioquia province of Columbia, commercial production has started at Greenstone’s Oronorte gold mine which is currently operating at about 100-125 tons per day.

The small underground mine produces a gold-bearing concentrate from a quartz-pyrite veins developed on three levels to a depth of 330 ft. below surface. The sulphide concentrate, which grades about 25 oz. gold, is shipped to Japan for smelting by Nippon Mining. About 700 tons of concentrate per year will be produced at the mine which is expected to yield 18,000 oz. of gold this year and 25,000 oz. in 1992.

“We’re quite proud of our Oronorte gold mine in Columbia,” said Park, adding that Greenstone built the small mine from scratch for only US$4 million and it is now providing cash flow for the junior company.

Proven and probable reserves in the mine are sufficient for five years of production at an annual operating cost of less than US$165 per oz.