Rio Narcea picks up new zone at El Valle (November 11, 2002)

Exploration drilling by Rio Narcea Gold Mines (RNG-T) in the main pit at the El Valle gold mine in the Asturia region of northwestern Spain has intersected a new zone of gold mineralization at depth, while reserve drilling has confirmed grades below the mined-out Boinas East pit.

The new zone, Area 107, was found by drilling the strike extension of an isolated mineralized intersection drilled in 1997 in the southeastern quarter of the currently active El Valle pit. The drill hole, numbered VAL-191, was a 30-metre offset from the 1997 hole and intersected two zones of gold mineralization.

One zone graded 27.8 grams gold per tonne over 9.1 metres of core length around 90 metres down-hole, and the other graded 10.8 grams per tonne over 6.8 metres at a shallower depth.

The zone, which has now been tested by four holes, consists of oxidized jasperoid breccia and porphyry. It is controlled by a fault zone that is inferred to be 90 metres in strike length and about 40 metres wide. Rio Narcea tested the structure over a vertical interval of 95 metres.

Grades in the zone range from 1.7 grams (over a length of 6.6 metres) to the 27.8 grams encountered in VAL-191. Most of the mineralized core lengths are between 5 and 12 metres, though a follow-up hole cut a 24.3-metre intersection grading 2.3 grams.

Other exploration drilling at the property, from stations in an underground decline, tested the eastern extension of the Monica gold zone, a southeast-striking structure below the Boinas East pit. The best hole drilled in that area intersected 25.3 grams gold over 12.7 metres and, separately, 14.2 metres that ran 6 grams gold.

Reserve drilling from the decline, meant to establish a 25-by-25-metre sampling grid on the Monica zone, indicated an average grade of 7 grams gold per tonne. The zone consists of three lens-like mineralized bodies, averaging about 4.6 metres wide, with a strike length of 235 metres.

Rio Narcea plans to tighten the sampling grid to 12.5 by 25 metres by a 4,000-metre drilling program. A feasibility study and a decision on whether to start underground production in 2003 are slated to follow.

The El Valle open-pit operation, which produced 125,000 oz. gold in 2001, had reserves of 2 million tonnes grading 6.6 grams gold per tonne. Underground resources below the active pits hold 1.4 million tonnes at an average of 6.5 grams gold.