New resources at Ocampo

Gammon Lake Resources (GAM-T) has announced a new gold-silver resource estimate for the Ocampo project in Mexico’s Chihuahua state. The project contains 1.85 million oz. gold and 76.7 million oz. silver (3 million gold-equivalent ounces) in the measured and indicated categories, plus 2.55 million oz. gold and 127.8 million oz. silver (4.53 million gold-equivalent ounces) in the inferred.

The total resource for the Ocampo project comprises the Northeast area (underground and surface mineralization) and the open-pit area, below which is a low-grade and a high-grade resource.

The Northeast underground resource has a measured and indicated resource of 4.06 million tonnes grading 4.8 grams gold and 227 grams silver per tonne, equivalent to 628,000 oz. gold and 29.7 million oz. silver, or 1.1 million oz. gold-equivalent. This was calculated using a cutoff grade of 3 grams gold-equivalent per tonne.

The Northeast underground resource estimate is based on five vein deposits: Aventurero, San Juan, Las Animas-San Amado, Rosario and Esperanza. The underground resource was calculated using a cutoff of 3 grams gold-equivalent per tonne, and the open pit used 0.4 gram gold-equivalent. The estimates are based on a gold price of US$375 per oz. and a silver price of US$5.77 per oz.

About 70% of the drilling in the Northeast has been done from underground. Roughly 3 km of underground ramps and tunnels have been developed. The veins occur in a 1.7-by-2.8-km area. Based on statistical analyses, assays from different veins were cut to different values.

The Northeast surface resource contains a measured and indicated 2.3 million tonnes grading 1.11 grams gold and 55 grams silver per tonne, based on a 0.4-gram gold-equivalent cutoff and a silver-to-gold ratio of 65:1. The surface resource estimate is based on data from the Brenda and San Juan deposits.

The Ocampo Open-pit area contains a measured and indicated 32.2 million tonnes grading 1.03 grams gold and 37 grams silver. The area contains a high-grade core with a measured and indicated 4.7 million tonnes grading 3.46 grams gold and 146 grams silver (or 870,000 gold-equivalent ounces). The cutoff of the high grade was set at 3 grams gold-equivalent per tonne, whereas the low-grade area used a 0.3-gram-per-tonne cutoff. The lower-grade mineralization may be treated as a heap-leach deposit.

The open-pit area is in a 3.7-km-by-1.6-km zone that was tested along known structures to a depth of 200-250 metres.

The resource was calculated by Mintec of Tucson, Ariz. The gold grade is slightly lower than the June 2003 estimate; although the tonnage has increased, the number of ounces is similar.

The revised resource will be incorporated into a feasibility study that is due for completion before year-end.

There are two major hosts to the mineralization: gold, silver, electrum, argentite and pyrite are present in low-sulphide quartz stockworks and breccias; secondly, high-sulphide, enargite-bearing, vuggy breccias with sulphide-replacement in rhyolite and dacite.

The 35-sq.-km-Ocampo project comprises 44 mining concessions.

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