LATIN AMERICA — Drilling confirms continuity at Dolores play

Drilling carried out by Echo Bay Mines (ECO-T) on the Dolores project in northern Mexico confirms the continuity of potential ore-grade gold-silver mineralization along a strike length of more than 1,000 metres and to a depth exceeding 200 metres.

Echo Bay Mines completed the 56-hole infill program on the Main zone, prior to relinquishing a 60% option on the property, which is owned my Minefinders (MFL-V).

Highlights from this fourth phase of drilling, which consisted of 38 reverse-circulation and 18 diamond drill holes, include:

* 105.2 metres averaging 1.65 grams gold and 35.3 grams silver per tonne (including 25.9 metres averaging 4.46 grams gold and 110.7 grams silver) from a downhole depth of 39.6 to 144.8 metres in hole 33;

* 22 metres, beginning at surface, averaging 17.35 grams gold and 272.6 grams silver (including a rich 3-metre interval grading 121.94 grams gold and 2,878 grams silver) in hole 41;

* 108.2 metres averaging 1.47 grams gold and 15.5 grams silver (including 22.9 metres averaging 3.94 grams gold and 38.1 grams silver) from a depth of 117.3 to 225.5 metres in hole 46;

* 50.3 metres beginning at surface averaging 1.41 grams gold and 25.47 grams silver in hole 50;

* 178.7 metres averaging 0.96 gram gold and 49.03 grams silver (including 18 metres averaging 2.37 grams gold and 231.6 grams silver, plus 42.7 metres averaging 1.92 grams gold and 30.82 grams silver) from a depth of 103.3 to 282 metres in hole 85;

* 62.5 metres averaging 1.3 grams gold and 147.1 grams silver (including 20.2 metres averaging 3.6 grams gold and 360 grams silver) between 146.3 and 208.8 metres in hole 91; and

* 45.7 metres averaging 1.82 grams gold and 89 grams silver (including 8 metres averaging 6.5 grams gold and 181 grams silver) from a depth of 4.3 to 50 metres in hole 92.

To reacquire a 100% interest in Dolores, which is situated in Chihuahua state, Minefinders paid $4 million in cash and surrendered 1.25 million of its shares to Echo Bay. The transaction increased Echo Bay’s ownership in Minefinders to 25%, or 21.7% if fully diluted.

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Four zones

The Dolores property is centred on a north-northwest-trending zone of mineralization exceeding 4 km in strike length and 500 metres in width. The mineralized trend occurs in a complex sequence of propylitically altered andesites cut by a series of north-northwest-trending latite dykes and overlain by weakly argillized tuffs. The main trend is divided into four target zones: Norte, Chabacan, Hondo and South.

Drilling to date has tested about 2,500 metres of the 4,000-metre strike length. Based on 107 drill holes completed to the end of June and using a cutoff grade of 0.5 gram gold, Nevada-based Humboldt Mining Services calculated a drill-indicated and inferred resource of 25.3 million tonnes grading 1.3 grams gold and 47.3 grams silver, equivalent to 1 million contained ounces of gold and 38.5 million contained ounces of silver.

When the cutoff is lowered to 0.27 gram gold, the resource becomes 39.4 million tonnes grading 0.96 gram gold and 36 grams silver, or 1.2 million contained ounces of gold and 45.8 million contained ounces of silver.

Minefinders says the latest drill results will likely boost the overall grade of the resource estimate.

Minefinders continues to carry out infill and stepout drilling at Dolores in an attempt to advance the resource to the proven and probable category. A prefeasibility study is expected in early 1998.

Elsewhere, the company is drilling 25 holes on its Oro Blanco property in Arizona, along the border with Mexico’s Sonora state. The program is testing five target areas that exhibit strong surface gold-silver anomalies.