Lac’s strategy involves boosting reserves

Toronto-listed Lac Minerals is spending more to increase gold reserves at existing mines and properties.

At El Indio and Tambo in Chile, US$5 million will be spent in a multi-year campaign to boost reserves. A preliminary feasibility study of Tambo already has identified the potential for a 100,000-oz.-per-year increase. “The progress reports we are receiving at El Indio, Tambo, Nevada (all in Chile) and Red Mountain (in British Columbia) indicate we are well-positioned to increase our gold reserves significantly,” said Peter Allen, Lac’s chief executive officer.

MRDI, a San Francisco consulting firm, is compiling and evaluating all historical data on El Indio, 300 miles north of Santiago. It has also been commissioned to plan an exploration program. Several new targets have been outlined, reports Michael Richings, president of Lac’s South American division.

At Tambo, only a few miles from El Indio, Lac has established a preliminary minable reserve of 19.7 million tons grading 0.055 oz. per ton. By year-end, an economic and technical feasibility will have determined the potential of a 6,000-ton-per-day agitation leach mill and 10,000-ton-per-day heap-leap facility. This size of plant would yield 150,000 oz. per year. About 30 miles north of El Indio, Lac has calculated a preliminary geological “resource” of 43.3 million tons grading 0.077 oz. The resource was calculated using a 0.03 oz.-per-ton cutoff and covers a 2,000×650-ft. area in the central and eastern Esperanza blocks.

The next phase of the campaign will consist of 100,000 ft. of wide-spaced reconnaissance drilling to test four areas, as well as some detailed infill drilling.

In northwestern British Columbia, the Red Mountain project has yielded another two mineralized zones. Gold grades and widths are consistent with those already encountered in other zones, Lac said. The scope of current surface exploration has been increased to 100,000 ft., about double the earlier program.

Underground, Lac has driven a 1,300-ft. decline and 500 ft. of crosscuts. Extensive sampling (incorporating chip, channel, panel and muck samples) is under way.

The crosscut rounds will be processed through a crushing plant and sampling tower to evaluate the drill-indicated grades.

Metallurgical, engineering and environmental work is progressing toward the beginning of a feasibility study, perhaps by year-end. Lac is also explaining its project at public meetings, to residents of New Aiyansh and Stewart. This season, Lac will have spent about US$7 million on Red Mountain. A new gold “resource” (probably within the 2-million-oz. range or better) will be calculated before the year is out.

Late last year, the company published a preliminary estimate of 2.8 million tons grading 0.37 oz. per ton., calculated using a 0.088-oz. cutoff and a minimum thickness of 10 ft.

In other news, Lac is decentralizing its operating structure by creating regional “profit centres.” The two new units — Lac North America and Lac South America — will be autonomous and responsible for mine exploration, development and operations, as well as personnel, accounting and financing functions.

While the regional units focus on the mines, Lac’s corporate office will concentrate on strategic policy, budget and senior finance. It will also pursue business opportunities and joint ventures.

“Our goal is to further Lac’s development as a global mining house,” Allen said.