Pacific Minerals’ drills rev at 217 gold project

Vancouver — Pacific Minerals (PMZ-V) is mobilizing a crew to commence a 5,000-metre diamond drilling program on the 217 Gold project, situated in Inner Mongolia, China.

The program is designed to test the main Northeast Gold zone of the 217 Gold project. This zone is 1,600 metres long and up to 200 metres wide and forms part of a larger mineralized zone which has been traced in outcrop for 4,000 metres. The drill program was designed jointly by the technical team of Ivanhoe Mines (IVN-T) and Pacific Minerals and is part of the US$1 million expenditure required according to a recent private placement-joint venture deal with Ivanhoe.

According to the deal, once US$1 million of the private placement has been spent on the 217 Gold property, Ivanhoe will have a first option to acquire a 60% interest in the property by completing a feasibility study. Pacific Minerals’ holding, once exercised, will be converted to a 36.5% carried interest. Ivanhoe will be able to increase its stake to 76.5% by arranging financing to take the property into production. As a result of this option, Pacific Mineral’s interest will be reduced to a 20% carried interest, which will be subject to Ivanhoe’s right to recover its capital and carrying costs from production revenue.

The partners plan to drill 24 holes totalling 4,300 metres into the Northeast Gold zone with the remaining 700 metres allocated to test a number of newly identified geophysical targets to the south of the zone.

Gold mineralization at 217 is hosted by Proterozoic-aged, carbonaceous slates that have been highly deformed and intruded by a series of granitic plutons. Mineralization remains open to the west as well as to depth. Work by the previous operator included 65 trenches totalling 2,600 metres plus 10 widely spaced holes (2,800 metres). All of the holes intersected gold mineralization. The best assayed 1.28 grams gold per tonne over 273 metres from the surface.

Pacifc Minerals expects that drilling will start by the end of the month. The 217 Gold project is covered by a 36-sq. km exploration permit that is situated near the southeastern border of Mongolia. Access to the project is by way of a series of paved and gravel roads linking the city of Baotou, which is served by daily scheduled flights to Beijing. The project has excellent local infrastructures with an ample supply of electricity, several large freshwater lakes and access to a rail line found 60 kilometers to the east.

Meanwhile, Pacific Minerals continues with its 3,000-metre-underground infill drilling program in Adit PD-1339 on the JBS platinum palladium nickel deposit. The program is designed to test the continuity of the K1 and K2 zones. Two electric drills are drilling a series of short, 20-to-60 metre, holes spaced at 20 metre intervals within the floor and roof of the adit. The first phase of drilling will test a 500 metre section of high-grade mineralization previously defined by the Chinese. The second phase will continue to verify the previous resource estimate as well as work towards expanding mineralization within the high grade zone.

To date, nine underground in-fill diamond drill holes from two cross-sections have been completed and the cores have been split and crushed, and the samples are assayed at the ACME Laboratory in Vancouver, B.C. It is anticipated that the assay results will be available in 2 weeks. The JBS property is situated in the south central China in the Yunnan Province about 200 km east of the city of Kunming. Kunming has a population of about 2 million and is serviced by regular flights to all of the major cities in China including Hong Kong and Singapore. Access to the property is via a 45 km gravel road that links to a provincial paved highway.

Based on 65,000 metres of diamond drilling the Chinese government estimated an underground resource of 33 million tonnes grading 0.42 gram platinum per tonne, 1.1 grams palladium, 0.14% copper, 0.15% nickel, 0.013% cobalt, based on a 0.5 gram combined platinum and palladium cut-off grade. Pacific Minerals had an independent technical audit performed on the Chinese resource estimates. Results indicated an estimate of 20.8 million tonnes grading 0.61 grams platinum, 0.94 gram palladium, 0.10 gram gold, 0.155% copper, 0.27% nickel and 0.017% cobalt. The Chinese also estimated an inferred resource that weighs in at 9.4 million tonnes grading 0.90 gram platinum, 1.77 grams palladium, 0.20% copper, 0.21% nickel, 0.017% cobalt. This resource is situated entirely within the North Ore zone.

The JBS property is also subject to a similar deal with Ivanhoe. Once US$1 million has been spent on the property, Ivanhoe will have an option to acquire half of Pacific Minerals’ 70% interest by completing a feasibility study. Ivanhoe can increase its interest to 50% by financing the property into production.