Santa Rosa may start in early ’92

A 10,500-metre (34,450-ft.) drilling program recently completed at the Santa Rosa project has confirmed previous owner Freeport McMoRan’s work. Now jointly owned by Greenstone Resources (TSE) and Boliden Canada, the project’s proven and probable reserves stand at 12.4 million tons grading 0.061 oz. gold per ton.

A full-scale feasibility study is due for completion in August of this year. Greenstone expects that a positive decision would see the first bullion produced in the early part of the second quarter of 1992. An initial production rate of 1.5 million tons per year is expected to reach three million tons (about 100,000 oz. gold) in 1993.

The Santa Rosa project lies 124 miles in a direct line southwest of Panama City, Panama, and within 10 miles of the Pan-American Highway. That’s quite a distance from Greenstone’s Canadian home. But for this tropical isthmus, it’s exceptionally close to reliable infra- structure. Proximity to a major road and power lines is only one of the pluses for the project.

Freeport McMoRan had outlined the most important factor earlier — a large, bulk-tonnage gold deposit suitable for open pit mining and subsequent heap leaching.

In a major restructuring of the company, Freeport divested itself of most of its non-core assets. Greenstone and Boliden, a wholly owned subsidiary of Boliden AB of Sweden, jointly acquired the Santa Rosa property in August, 1990, for US$6 million. Greenstone owns 49% of Minas Santa Rosa S.A., the Panamanian joint venture company, and will remain operator, at least until a production decision is made. Boliden owns the controlling 51%.

The bulk of the ore reserves is in the Santa Rosa deposit with the smaller Alto de la Mina zone, 500 metres (1,640 ft.) distant, hosting 2.6 million tons at a grade of 0.065 oz. gold.

The two deposits are on a ring-fault structure forming the rim of a major circular volcanic structure nearly nine miles along the periphery. The two deposits already delineated represent only 10% of the 9-mile periphery, and the potential for discovery of new deposits is excellent.

Some of the higher-grade sections of the Santa Rosa were mined near surface and on a limited scale during the 1930s. Similar workings are known to exist at several other locations along the ring-fault structure, which bodes well for future discoveries.

Already, a mineralized zone about 1,000×1,000 ft. and known as Las Huacas has been located two miles south of Santa Rosa.

The initial interest here was prompted by a number of shallow adits driven by earlier highgraders. Another deposit, Los Sanchez has similarly been identified another two miles south of Las Huacas.

These and a number of other mineralized areas will be intensively investigated during the 7-8-year life of the currently delineated reserves and ensure a long life for the Greenstone/ Boliden project.

One of the unknowns in this first heap leach operation in Panama, indeed the first major mining development in the country for many years, is the construction and operation of heap leach pads in the Panamanian environment. One of the first tasks of the joint venture has consequently been to construct a pad. This is now well under way and should be completed before the end of the current month.

The test pad is relatively small at 280,000 sq. ft. It will be loaded with the first production ore broken out of the pit and serve the purpose of a large-scale test bed and, importantly, produce the first commercial bullion.

However, there are more than a few questions yet to be answered. How rapidly can inexperienced Panamanian contractors settle into an earth-moving task? What are the most effective procedures for handling sub-surface water? What is the construction cost going to be per square foot?

The logistics of the operation could not be better. A paved road passes near the proposed Santa Rosa pit on its way to the small, agricultural town of Canazas about one mile north. There is a reliable supply of potable well water and the principal power line of the Panamanian Power Corp. passes within 15 km (10 miles) of the pit. Whether a branch line and sub-station will be established now or at a later date during the earlier years of the operation will be addressed by the feasibility study.

Between 98 and 118 inches of rainfall are expected during the course of the year, with the heaviest falling between October and December. Work in the pit will cease for the three months, but waste stripping will continue because of the superior riding characteristics of the haulage roads. However, the roads cut in ore will be too soft to use.

The Panamanian corporate tax rate is 35%, depreciation and depletion allowances are generous and there is essentially 100% repatriation of profits.