Placer updates Cerro Casale resource

Placer Dome (PDG-T) has boosted the geological resource estimate of the Cerro Casale deposit in northern Chile.

Situated on the Aldebaran property, 250 km southeast of Copiapo, the deposit now has a measured, indicated and inferred resource of 1.2 billion tonnes containing 0.26% copper and 0.71 gram gold per tonne, equivalent to 29.9 million oz. gold and 6.8 billion lbs. copper. The calculation was made using a cutoff grade of 0.4 gram gold per tonne.

The measured and indicated resource, again based on a 0.4-gram cutoff, is estimated at 952.1 million tonnes averaging 0.71 gram gold and 0.26% copper, or 21.7 million oz. gold and 5.5 billion lbs. copper. This represents a 2-million oz. increase over figures quoted in the prefeasibility study.

The new calculations are based on data collected from more than 110,000 metres of drilling.

Placer can earn a 51% interest in the Chilean property from 51-49 owners Arizona Star Resource (AZS-T) and Bema Gold (BGO-T) for US$20 million in cash and private placements. The major is also required to complete a final feasibility study on Cerro Casale by February 2000 at an estimated cost of US$25 million, and spend a minimum of US$15 million over two years on exploration of targets outside of that deposit. If a positive production decision is made, Placer will be able to earn a 51% interest by arranging and guaranteeing up to US$1.3 billion in mine financing.

Once the earn-in is completed, Bema Gold will hold a 24% interest, and Arizona Star, the remaining 25%.

Assuming a copper credit of US$1 per lb., cash operating costs are projected at US$79 per oz. gold, whereas total costs (including life-of-mine capital) would be US$182 per oz. Capital costs are pegged at a lofty US$1.3 billion, with a payback of 6.5 years.

The Aldebaran property comprises 450 sq. km of ground in the Maricunga region of the Andes Mountains, 150 km inland from the Pacific coast.

The Cerro Casale deposit remains open at depth and to the northwest, as well as at the eastern end of the Southwest zone. In early 1999, more drilling will be carried out in order to define the Southwest and Northwest zones.

To date, Placer Dome has spent US$19 million on drilling at Cerro Casale and related work as part of an ongoing feasibility study, which is due for completion by year-end.

Combined, Bema and Arizona Star contributed more than US$40 million to drilling as part of a prefeasibility study.

Besides the large, low-grade Cerro Casale gold-copper porphyry deposit, Aldebaran hosts several gold-bearing zones near the surface. Over the past year, Placer Dome has spent US$7 million exploring these targets by means of airborne geophysics, geological mapping, bulldozer trenching and diamond drilling. At the Cerro Roman deposit, for example, 7,200 metres have been drilled; at the Eva deposit, 2,400 metres.

Resource estimates at Cerro Roman are pegged at 104.7 million tonnes grading 0.12% copper and 0.69 gram gold, which is equivalent to 2.3 million contained ounces gold. The Eva deposit hosts a resource of 51.8 million tonnes grading 0.7 gram gold, or 1.2 million contained ounces. These estimates are based on a cutoff grade of 0.5 gram gold. Both deposits are open at depth, and Eva remains open to the west.

For 1999, Placer Dome plans to spend US$18 million exploring the Eva, Anfiteatro and Estrella zones and completing the feasibility study of Cerro Casale.