MINING IN MEXICO — Geomaque developing San Francisco project

Aiming for a mid-1995 startup, Geomaque Exploration (TSE) is pushing ahead with predevelopment work at its San Francisco gold project in Sonora state.

The work follows the completion of a positive prefeasibility study late in 1993. The study, based on nearly 30,000 metres of drilling, estimates measured and indicated minable reserves of 4.4 million tonnes grading 1.41 grams gold per tonne.

According to Phillip Walford, Geomaque’s vice-president of exploration, the deposit has been traced along a belt 600 metres wide and 1.4 km long, and is open along strike and at depth.

Mineralization occurs in three major, and at least four minor, tabular zones. These zones, which are stacked and range up to 20 metres in thickness, strike to the northwest and dip moderately to the northeast. The host is usually granite or granite gneiss, but the mineralized envelope crosses lithological units.

“In many ways, the deposit resembles an Archean deposit in the Abitibi (greenstone belt of northern Ontario), as opposed to a Mexican epithermal system,” Walford says.

Within the zones, gold is found mainly in free form within quartz tourmaline veins, stringers and breccias, and as disseminations, throughout the host rocks. Minor pyrite, associated with the gold, is mostly oxidized to depths of 100 metres or more. Other metallic minerals occurring rarely include chalcopyrite, galena, sphalerite, covelite, bornite, acanthite and petzite. Geomaque recently completed a 75-hole, 6,000-metre definition drill program, which is providing additional data for the final pit design in the Main and North Pit areas. The work included condemnation drilling in the planned leach pad site area.

Geomaque President John Paterson says drill results continue to show that the gold ore zones have excellent continuity, and he expects reserves will be increased when the new pit design is completed in early November. In addition, a new near-surface zone was located northeast of the Main pit. This resource will be further evaluated with a 1,000-metre drill program in late autumn.

Paterson says a contract for engineering and construction is being tendered, with construction expected to begin shortly and last nine months. Three pits are envisioned, which would be operated concurrently and mined to a depth of about 80 metres. The stripping ratio is calculated at 3-to-3.1, and production is forecast at 900,000 tonnes per year for five years. Ore will be heap-leached, and with average recoveries projected at 72%, the deposit should yield about 30,000 oz. gold annually. An advantage of the flat topography is that the leach pad can be constructed adjacent to the pit area, minimizing haulage costs.

Capital costs are estimated at US$5.2 million, and cash operating costs will average about US$245 per oz.

Geomaque is well funded, having raised $10.4 million through a private placement last June.

On the exploration front, the company has increased its exploration rights to 14,600 hectares from 3,800 hectares. The new acquisitions include several gold showings, and all the properties (except one 680-hectare parcel) are near the San Francisco mine site. Preliminary exploration will be carried out during the next three months.