EXPLORATION ROUNDUP — South Pacific pins hopes on Kalimantan prospect

An epithermal gold deposit in the lush jungle of Kalimantan, Indonesia, has become the prime exploration focus for Vancouver-based South Pacific Resources (SHF-A).

Known as Masupa Ria, the project is a major, northeast-southwest-trending structure with a geological setting similar to many Nevada deposits. It is adjacent to Aurora Gold’s producing Mt. Muro mine and is near two other contracts of work (CoWs) held by SPR, Jangkang and Mirih, which the junior regards as “equally prospective.”

“We have a big project going,” says SPR spokesman Campbell DeLong. “We’re spending a ton of money — our budget for next year is approaching $5 million.”

To speed up exploration, the company has hired six more geologists, who will join the five already on site. SPR has 30 full-time employees in Indonesia, along with 120 contract laborers.

The company is one of hundreds that have flocked to Kalimantan since the discovery, by Bre-X Minerals (BXM-T), of the massive Busang deposit, which is believed to contain between 50 and 100 million oz. gold.

Recently, SPR completed a combined airborne magnetic-radiometric, 13,351-line-km survey over Masupa Ria and Jangkang, identifying about 10 targets in the process. A similar survey, on the 1,756-sq.-km Mirih block, is near completion.

Masupa Ria is divided into three districts: Ongkang, Kiwi and Tarojan.

At the Ongkang gold district, geologists carried out geological mapping, as well as surface and underground channel sampling, prior to diamond drilling.

Some 13 holes were drilled in a program spanning 2,077.6 metres at the Ongkang vein prospect. Nine holes intersected the vein, six of which returned significant gold values. (Three holes were abandoned as a result of mechanical problems.)

Drilling has consistently intersected a zone of steeply dipping, epithermal quartz veins and breccias, the true width of which ranges up to 25 metres in nine of 13 holes. Mineralization is associated with intense

montmorillonite-quartz-carbonate-pyrite alteration developed in a microporphyritic andesite.

Anomalous gold values of 0.3-2 grams per tonne occur over drill widths ranging up to 100 metres, including narrow zones of 2-10 metres with high-grade gold and silver values. Most of the gold is free-milling and leachable.

Highlights from recent drilling include: 10 metres grading 10.8 grams gold and 119.7 grams silver in hole 24A; 4 metres grading 3.7 grams gold and 3.3 grams silver, plus 4 metres of 0.2 gram gold and 207.5 grams silver, in hole 22; 18 metres grading 5.7 grams gold and 29.2 grams silver in hole 23A; 20 metres grading 6.3 grams gold and 4.3 grams silver, including 2 metres of 38.8 grams gold and 6 grams silver and 2 metres of 21 grams gold and 6.9 grams silver, in hole 23C; and 4 metres grading 2.1 grams gold and 30.6 grams silver, 2 metres of 8.8 grams gold and 15.7 grams silver, and 2 metres of 5.4 grams gold and 46.7 grams silver in hole 3A.

SPR says the results show the Ongkang vein system is continuous over the area of infill drilling.

Company geologists believe there is potential to develop a gold resource beneath a large, thick silica leach cap along strike, northwest of current drilling.

Kiwi district

At the Kiwi gold district, an extensive program of auger soil sampling over 10 sq. km delineated several gold and copper anomalies. The area is underlain by Miocene andesitic pyroclastics, which often contain carbonized plant fragments.

SPR collected 1,655 samples and is currently preparing for a 10,000-metre program of reverse-circulation and diamond drilling.

The program identified a coincident copper-gold anomaly measuring 1,200 by 500 metres with peak values of 1,200 parts per million (ppm) copper and 0.75 gram gold. The anomaly is defined by the 100-ppm contour interval, and sporadic gold values of up to 0.75 gram are associated with the anomalous copper geochemistry.

Bulldozer trenching at the western end of the Kiwi prospect produced encouraging gold assays from the first four trenches. The program identified wide zones of quartz veining and breccia enveloped by intense clay-silica-pyrite alteration ranging up to 70 metres in width.

In total, the company expects to complete 6,000 metres of trenching on 100-metre spacings prior to drilling.

At the northern Kaka prospect, exploration by previous operator BP Minerals in 1988 delineated a 500-by-300-metre zone of stockwork copper-gold mineralization in a sequence of altered Miocene volcanics.

Tarojan district

At the 10-sq.-km Tarojan district, gridding, soil sampling and geological mapping are set to begin.

Geologists have identified a significant alteration zone, at least 1 km in diametre, in a sequence of altered, andesitic pyroclastics at the intersection of several regional structures.

The lineaments include the northwest-trending Ongkang structural zone and the east-west-trending Kiwi fault.

Limited reconnaissance traversing has been conducted over the Ringsa, Ardiensa, Tosa, Transit and Menyawang prospects.

Other prospects

Besides Masupa Ria, Mirih and Jangkang, all of which are in central Kalimantan, SPR controls three other CoWs on the island: Mandor, Landak and Sori Hill:

* Mandor — A 1,803-sq.-km copper-gold porphyry project near the west coast, Mandor takes its name from the nearby village, where artisanal miners have scratched out a living for generations.

Under an agreement, Inmet Mining (IMN-T) has the option of acquiring 51% of SPR’s 90% interest in the CoW.

Recent drilling intersected copper-porphyry-style mineralization, returning 145.5 metres averaging 0.34% copper, including 48 metres of 0.53% copper.

Auger soil sampling located a 400-by-400-metre copper-molybdenum anomaly 2 km northwest of hole 48. Auger soil sampling at the Tombawang prospect, 30 km northwest of Mandor village, delineated a copper-molybdenum-gold anomaly measuring 900 by 400 metres and which is open to the north.

* Landak — The 1,776-sq. km Landak CoW, inland from Mandor, is deemed prospective for both primary and alluvial gold and diamond deposits.

* Sori Hill — Situated 250 miles southwest of Masupa Ria and comprising 377 sq. km, Sori Hill was originally intended as the sight of a limited geochemical program, but the results of airborne geophysics encouraged the company to fast-track drilling.

Geologists have identified a northeast-trending anomaly, measuring 6 km long and up to 1 km wide, on the Lahung and Sori Hill prospects. The northern part of the anomaly forms a large, coincident gold-molybdenum-arsenic geochemical target measuring 2,20 metres long and up to 600 metres wide. Peak gold values in soils range as high as 1.5 grams.

A 3,000-metre program of diamond drilling is under way in an effort to test Lahung’s bulk-tonnage potential.