MINING IN CHILE — S. Amer. Gold and Copper developing

Hoping to become a 100,000-oz.-plus gold producer within the next three years, South American Gold and Copper (SAGC) is busy developing mining projects in Chile.

Targeting “non-grassroots” projects with existing infrastructure, the Toronto-listed company has acquired interests in six properties: three gold, two copper and one limestone.

One of the features that sets SAGC apart from other juniors is the considerable experience its senior management has had in Latin America. Chairman John Duncan formerly chaired St Joe Minerals and Cyprus Minerals, and Exploration Director David Thomson was associated with the discovery of the Maricunga district and deposits such as Refugio, Marte and El Indio. The two most advanced projects in SAGC’s portfolio are Pimenton and Santa Cecilia, both of which feature gold deposits.

The former is about 113 km north of Santiago within a belt of porphyry copper deposits that trends from Toquepala, Peru, in the north to El Teniente, Chile, in the south. The property is underlain by andesitic rocks and contains a 1.6-by-3.2-km alteration system which may be related to a buried porphyry copper system.

The altered andesites are highly fractured and transected by at least two gold-bearing vein systems. From 1985 to 1990, Newmont Mining Chile carried out trenching, diamond drilling and underground development on the northern-most vein system.

Although current proven reserves in two veins consist only of 16,763 tonnes grading 23.6 grams gold per tonne, SAGC estimates the property contains a geological resource of 1 million tonnes grading 15 grams.

Having recently upgraded the road into the property, the company is currently building camp facilities. Over the next 18 months, it plans to spend US$1.5 million developing and exploring the vein systems.

“We hope to fast-track the project,” SAGC President Stephen Houghton told The Northern Miner. “We expect to have annual production of 9,000-10,000 oz. in 1995, increasing to 72,000 oz. in 1998 at an operating cost of about US$126 per oz.”

The other advanced project, Santa Cecilia, is a multi-vein deposit containing not only gold, but silver and copper as well. Situated in the prolific Maricunga district, 100 km southeast of Copiapoit, it comprises 1,247 hectares.

Nearly US$11 million has been spent exploring the property, which resulted in the discovery of three mineralized zones. Gold values in excess of 20 grams were returned from drilling and underground tunnelling.

Over the next four months, SAGC plans to spend US$500,000 exploring the Portal and Tio Rubio veins. The ultimate hope is to outline enough reserves to support a 100-ton-per-day operation.

Meanwhile, limited work is also planned on the Lohpan and Espinos porphyry copper projects and on the Catedral limestone deposit, all of which are within 60-70 km of Santiago.

In addition to its Chilean holdings, SAGC holds an interest in the copper-gold project known as Chachas, 90 km northwest of Arequipa, Peru. The 14,000-hectare property hosts two vein systems that have returned values of up to 4 grams gold and 0.56% copper over a true width of 12 metres. Shares of SAGC recently began trading on the TSE following a successful reverse takeover of Osborne & Chappel Goldfields.