THE GLOBAL SEARCH FOR GOLD SPECIAL — Glamis eyes Paramount’s gold project in North Sulawesi

Heap-leach miner Glamis Gold (GLG-T) is spreading its wings from its base of operations in the western U.S.

The company recently signed a “letter of understanding” with Paramount Ventures & Finance (PVF-V) that allows it to earn half of Paramount’s interest in an advanced gold property in North Sulawesi, Indonesia.

Glamis will fund exploration through to a bankable feasibility study and acquire 2 million units of Paramount at a price of $2.25 per unit, pending completion of a formal agreement, due diligence and approvals.

The proposed initial work program will include infill drilling and the rehabilitation of existing adits to move known resources and reserves into the proven category. Mapping, sampling and trenching will be carried out in prospective areas to develop new reserves. If warranted, drilling also will be conducted.

Paramount can acquire up to 85% of the Gunung Pani property, which lies in an an area that has produced gold for centuries, from alluvial and hard-rock prospects worked by local miners.

The property was worked in the 1980s by an Australian company, which carried out extensive trenching, mapping and sampling on Pani Ridge. This was followed up by 29 diamond drill holes totalling 4,625 metres and three adits comprising 220 metres.

Gold mineralization is hosted in silica-sericite/clay-pyrite altered rhyodacitic pyroclastics and flows, intruded by dacite porphyry plugs, which Paramount says are probably related to a diatreme-dome complex.

The previous drilling returned assay values varying from 10 to 60 grams gold per tonne from northeast-trending, quartz-adularia-carbonate veins measuring 0.2-3 metres in width. Disseminated, hydrothermal breccia and stockwork styles of mineralization form halos that are lower in grade (1-5 grams) but nonetheless wide (20-60 metres).

Paramount notes that two northeast-trending mineralized zones (centred at Gunung Pani and Gunung Baganite) measure 500-600 metres along strike, and 100-300 metres wide. Sampling from trenches and adits at Gunung Pani returned 28.29 metres grading 2.12 grams from the former, and 16.65 metres of 5.3 grams from the latter.

Most of the previous holes were drilled at the northern half of Gunung Pani, with the best intersections being 30 metres of 2.44 grams, 20 metres of 7.01 grams, 44 metres of 3.06 grams and 22 metres of 4.74 grams. The zones are still open along strike and at depth. Outcrops 500 metres south of Pani were recently sampled, with 17 samples averaging 14 grams.

Previous operators have calculated resources in various areas of the property. For example, based on the first phase of drilling (seven vertical holes), a “resource potential” of 30 million tonnes grading 1.35 grams was estimated. This includes an indicated reserve of 12 million tonnes at 2.05 grams.

A second phase of drilling (22 holes) was carried out by BHP Minerals. An independent study during the early 1990s concluded that Pani Ridge has probable and possible reserves of 6-7 million tonnes grading 2 grams. Including Baganite Ridge, the geological resource is estimated at 40-50 million tonnes of greater than 1 gram.

To earn an 80% interest in the property, Paramount is required to make an option payment of US$100,000 on signing, followed by two payments of US$500,000 in less than year. The company is also required to pay its Indonesian partner’s obligation to the local village co-operative, which amounts to US$88,000 per year for three years. Paramount can increase its interest to 85% by paying $5 million, up to the completion of a bankable feasibility study.