LATIN AMERICA — Golden Star searches for kimberlites, gold — Second round of drilling planned

Guyanese diamond explorer Golden Star Resources (GSC-T) is bucking conventional wisdom in its search for a primary source of gems in that South American nation.

The company rejects the idea that diamonds found in the region originated in the West African Shield during the Paleozoic era (before plate tectonics drove Africa and South America apart). Instead, Golden Star is testing the hypothesis that alluvial diamonds found in the Guyana Shield originated locally.

Although the country produces 40,000 carats of diamonds per year from alluvial sources, few companies have explored Guyana for primary sources. The Guyana Shield is the last of the world’s shields to be explored for diamonds.

The only primary commercial diamond region here is the Guaniamo area in neighboring Venezuela, where local miners are exploiting high-grade dykes and sills of kimberlite material. Teck (TEK-T) also is exploring for diamond-bearing pipes in the area.

Another primary diamond source in South America is the Dachine region of French Guiana. A subsidiary of Golden Star, Guyanor Ressources (GRL.B-T), holds land in that region.

According to Adrian Fleming, executive vice-president of exploration at Golden Star, exploration activity in the region ” gives us confidence that there are indeed kimberlites in the Guyana Shield.”

Golden Star has planned a second round of drilling on its two large land positions in the northern part of Guyana, near the border of Venezuela and the Atlantic Ocean.

Last month, the company carried out airborne magnetics and radiometrics over 6,000 line km, with a line spacing of 50 to 100 metres.

Golden Star will rank the targets and drill-test the best 15 or 20, says Rick Winters, Golden Star’s vice-president of corporate development. Drilling is scheduled to begin before the end of October and continue through March of next year.

At the Five Stars properties, the company has identified 78 targets in what it calls the Piai Head cluster, near the Venezuelan border. Golden Star has identified an additional 40 targets in a corridor of Area 1. In the same area, as part of a joint-venture ground-survey program with Broken Hill Proprietary (BHP-N), the company has has located ultramafic outcrops.

.S

Radiometrics

Three years ago, the Guyanese government allowed the company access to 1.2 million ha. That figure was pared to the most prospective 100,000 ha.

Although the company was initially exploring for gold, it kept an eye open for diamonds as well.

Golden Star’s exploration began with a program of fixed-wing airborne magnetics and radiometrics — the first such survey conducted in that part of the Guyana Shield.

Subsequent field sampling, for both gold and diamonds, uncovered diamond indicator minerals, including chromites, which survive in the tropical environment. Test results showed that some of these minerals formed under the same pressure and temperature as diamonds.

Golden Star is looking for two types of diamond targets: traditional kimberlites in the underlying basement rock, and kimberlites preserved in the Paleozoic-aged Roraima sedimentary sequence.

.S

Crater-facies

Data from field programs were used to target three of the most prospective areas. Three holes were then drilled into each of the areas in 1996 in a 1,000-metre program of core drilling. Two of the targets intersected crater-facies kimberlite material, with one microdiamond found in each target. ” The fact that we found crater-facies material with microdiamonds strengthens our hypothesis,” explains Fleming. “With our recently completed higher-resolution geophysics, we have a better chance of hitting kimberlite in our next round of drilling.”

Diamonds are not Golden Star’s only interest in Guyana. The company is partnered with Cambior (CBH-T) at the Omai gold mine. Golden Star holds a 30% interest; Cambior 65%.

Cambior is exploring for new saprolite reserves to replace mined-out material. The saprolite is blended with the hardrock reserves for processing in Omai’s mill. According to Winters, the more saprolite that is put through the mill, the better the economics and output of the mine.

“Every additional 100,000 oz. of saprolite resource extends, by one year, Omai’s current annual production rate of 350,000 oz.,” he says. The companies are searching for the additional saprolite at the nearby Quartz Hill and Omai River concessions.

Drilling at Quartz Hill (west of the mine) is under way. Results show significant intercepts of saprolite mineralization at two targets, including: 20 metres grading 2.1 grams gold per tonne in hole 12; 6 metres grading 2.9 grams in hole 22; and 25.5 metres of 1.3 grams in hole 24.

In their hunt for saprolite resources, the companies are also turning to other explorers in the area. In June, Cambior struck a deal with Cathedral Gold (cat-t) to buy a 600-ha property hosting 2.8 million tonnes grading 2.1 grams, equivalent to 187,000 contained ounces.

Golden Star also has resurrected the Eagle Mountain gold project, southwest of the mine. The company last conducted work on the property in the 1980s.

Under the current program, it has drilled 20 holes, though rugged terrain and poor ground conditions have made for slow going. Assay results are pending.

The company hopes to find a saprolite resource of 500,000 oz. grading at least 1.3 grams gold at Eagle Mountain.

Golden Star is also evaluating the possibility of producing a gravity concentrate from potential Eagle Mountain ore. The concentrate would be shipped, by barge, to the mill at Omai.