San Anton, Goldcorp boost Cerro del Gallo resource

VANCOUVER — San Anton Resource (SNN-T, SNTRF-O) and Goldcorp (G-T, GG-N) have raised the resource estimate for their Cerro del Gallo gold-silver-copper project on the companies’ San Anton property, 270 km northwest of Mexico City, Mexico, and are focusing their efforts on producing a scoping study.

“I guess we’ve decided it’s big enough now. In fact, it’s enormous,” says San Anton president and CEO John Cook. “We really don’t need to do any more drilling.”

Cerro del Gallo is one of numerous exploration targets on the 2.2- sq.-km San Anton property, where the company holds an exploitation concession. San Anton owns a 58% interest in the property with Goldcorp holding the remaining 42%. Other parties hold a 4% net smelter return royalty.

The new estimate incorporates 118 drill holes totalling 36,000 metres of new drilling since the last resource estimate released, 18 months ago. About 58,000 metres of drilling in 232 holes was completed for the original estimate.

The latest round of infill and stepout drilling increases the measured and indicated resource at Cerro del Gallo by 43% to 461 million tonnes grading 0.27 gram gold per tonne, 11 grams silver and 0.11% copper. It is based on a 0.2- gram gold and a 0.07% copper cutoff.

A pit optimization study, completed before the latest resource estimate, and based on US$600 per oz. gold, US$10.80 per oz. silver, and US$3 per lb. copper, suggested that an optimized pit shell would capture 59 million measured tonnes grading 0.74 gram gold, 13 grams silver and 0.08% copper and 173 million indicated tonnes grading 0.25 gram gold, 15 grams silver and 0.12% copper.

Cook says the pit optimization will be updated to reflect the new resource estimate.

“All our focus now is getting (a scoping study) done so we can present something that is capable of being mined,” Cook says. “If the scoping is really good, we’ll probably jump straight to a feasibility study.”

He surmises that a mine could be developed within three to four years. “But that’s a bit of a thumb-suck,” he says, as any plans would be subject to getting permits and raising capital. In the near term, Cook expects to have the scoping study in hand during the third quarter.

The Cerro del Gallo mineralized area has been divided into gold and copper domains, both held within an altered ash-flow tuff sequence, mostly peripheral to central intrusives. San Anton’s drilling program has concentrated on a 1-sq.-km area, but the mineralized zone is open at depth and along strike.

On news of the updated resource estimate, San Anton’s share price jumped 11 to close at 40. Shares traded at 32 at presstime, in a 52- week range of 28-$1.50. Goldcorp shares recently traded at $44.10 in a 52-week window of $22.40-45.89.