Historical gold belt — El Callao region attracts interest

While it may not be as heavily promoted as the Kilometre 88 region, Venezuela’s El Callao region, 125 km to the northwest, has attracted its share of exploration companies.

This should come as no surprise, considering that the region has produced more than 195 million grams (6.3 million oz.) gold during the past 100 years, far outstripping production from Kilometre 88.

Gold mineralization is hosted in quartz veins within a wide regional shear system.

The area is seen as having potential for not only bulk-tonnage surface deposits, but for underground reserves as well. Mines in El Callao have operated at depths of greater than 500 metres.

Taking its name from the region, El Callao Mining (VSE) can earn up to a 70% interest in a large ground position to the northeast of the town of El Callao. The company has spent about US$6 million on the Lo Increible #4 concession during the past year and is currently assimilating data. The drilling returned encouraging results from four different areas, the most advanced being La Victoria where drilling outlined at least three zones measuring 7-60 metres in width and averaging 1.7-4.8 grams gold per tonne. Clive Johnson, president of El Callao, said drilling should resume in October under a US$5-million, 12-month budget.

Teck (TSE) and TVX Gold (TSE) have teamed up to earn a half interest in two groups of properties in El Callao from CVG-Minerven, a Venezuelan Crown corporation.

The concessions comprise three former mines, including the Chile (which produced 410,400 tonnes grading 45 grams), the Laguna (1.4 million tonnes grading 17 grams) and the Panama-A (455,000 tonnes grading 14.2 grams). A limited amounted of shallow drilling and projections from underground workings led CVG-Minerven to project a resource of 12.4 million grams for the three deposits. Most of that estimate covers the western extension of the Chile mine.

William Meyer, president of Teck Exploration, said the joint venture is completing the agreement with CVG-Minerven and expects to spend US$4 million in an initial phase of work once the ink is dry.

Much of the budget will focus on drill-testing extensions on the Chile and Panama-A mines.

Bolivar Goldfields (VSE) is in the midst of a second phase of drilling at its Tomi concession, 14 km east of the town of El Callao.

Earlier this year the company released a preliminary geological resource estimate for three surface mineralized zones totaling more than 21 million grams. The zones are within a 1.2-by-0.5-km area and have a true thickness in the range of 25-50 metres, as well as gold values in the range of 1-1.5 grams. Erratic high-grade values do occur in all the zones, as evidenced by a 15-metre intersection grading 17 grams gold within a 57.2-metre intersection grading 5.38 grams.

Ian Gray, president, said current drilling is testing the downdip and strike extent of the zones.

Vengold (TSE) can back-in for a half interest in the Tomi project at the completion of a feasibility study. To earn the interest, Vengold must reimburse all of Bolivar’s property expenditures (including acquisition costs), as well as arrange the financing required to achieve commercial production.

At the Increible #14 concession, about 35 km west of the town of El Callao, Bard Silver and Gold (VSE) is exploring a large gold-enriched zone. The mineralized zone is south of the Florinda mine, a laterite-hosted gold deposit which has been operating on a small scale for several years by some 200 local miners.

Bard can acquire a 56.7% interest in the Venezuelan company that owns the concession (as well as other properties in the country) by spending US$500,000 in the first year and US$1 million in each of the succeeding two years. To date, Bard has spent about US$750,000 on Botanamo, a gold project about 50 km southeast of Tumeremo.

Gold Vessel Resources (VSE) is working to earn a half interest in the Choco-6 gold property in the Callao region from a private Venezuelan company. Gold Vessel is in the midst of a drilling program and hopes to expand the 5.4-million-tonne resource, grading 1.3 grams, which was outlined previously. Latin American Gold (VSE) can buy up to an 80% interest in El Choco, a group of four concessions covering 11,500 hectares on the southern flank of the Callao greenstone belt.

Former small-scale mining of structurally controlled mineralization indicates that the property constitutes an “excellent” exploration target, according to the company.

Chairman Gerard Munera said the company is still checking on the property titles and assembling historic mining and exploration data prior to formulating an exploration plan.

Loumic Resources (VSE) is acquiring a half interest in an operating cyanide mill, as well as the nearby San Luis and Cayayi properties from a private Venezuelan company.

The company expects its half interest in the mill will generate more than US$1.5 million in cash flow per year. Feed for the mill is obtained from tailings generated by 30-40 small gravity mills within a 10-km radius. Other sources are ore from small miners under contract and small-scale mining operations on the joint venture’s concession.

Plans include expanding total capacity to about 400 tonnes per day from the current 70 tonnes at the cyanide plant, and 130-180 tonnes per day at the heap-leach facility.

Loumic is also planning an initial stage of exploration to identify targets for subsequent trenching and drilling.