The Ontario deal is better at the moment because the Super flow financing. About the other properties, if they are no good drop them. I like juniors that drop properties and go to the next. If you want to see a company that doesn't understand this look at this news release from SLI. Talk about money down the tube.
St. Elias Mines plans diamond drilling program
St Elias Mines Ltd SLI
Shares issued 15,627,951 Dec 6 close $0.08
Mon 10 Dec 2001 News Release
Ms. Lori McClenahan reports
St. Elias Mines has distributed the following letter to shareholders maintained in the company's database:
Two weeks ago, we reported the results of our phase II drilling program on our major asset, the Cueva Blanca property in northwestern Peru. Like you, we were disappointed in the assays results but we remain focused, determined and confident in our resolve to discover an economic gold deposit on this exceptional property.
Let's first address key issues raised by shareholders before discussing our
plans for the future:
Is the Cueva Blanca property really a candidate for an economic gold deposit? Don't these results prove otherwise? In fact, the phase II program proved the presence of gold in at least two different geologic formations of distinct ages -- Cretaceous tonalites and Tertiary volcanics -- and added irrefutable evidence of highly anomalous gold values over a strike length of at least two miles and widths exceeding a half-mile. This means there are very large "plumbing" systems underlying the property which have brought gold mineralization to surface. In fact, the existence of these systems at Cueva Blanca was a major consideration in St. Elias's decision
to option the property.
These systems were responsible for the precipitation of gold and other elements into local rock units over a very long time period -- the Tertiary period started 65 million years ago, lasting almost 63 million years, and the Cretaceous started 140 million years ago and lasted until the Tertiary period began. A common feature of the major ore deposits of the Andes is the presence of such enduring systems.
The long life of these systems also created complex geology which makes the task of finding economic mineralization a difficult but rewarding
challenge. For example, over 20 distinct gold prospects have been identified at Yanacocha, the 36-million-ounce Newmont/Compania Buenaventura
gold property in Peru now increasing production in a similar geologic
environment. In a dissertation that examined these prospects, Steven
Turner, PhD, senior geologist for Newmont, noted that there are no common
trace elements or exploration methods to simplify their discoveries --
simply the presence of gold, which requires considerable drilling to
define. The Cueva Blanca appears to be similar in this respect.
If nugget effect is an issue, why didn't management factor this into its
exploration plan? Our geological team has seen coarse gold on surface and
in trenches in the past two programs at both Zona Verde Norte and Sur. Fine
gold is also present at both locales. (These discoveries, by the way,
developed from the first systematic mapping of this very large property.)
The challenge is easy to visualize: if the volume of a tonne of rock is
approximately half a cubic metre and its gold grade is 2.0 grams per tonne,
the concentration of gold is two parts in a million. If this gold occurs as
"coarse" and is randomly distributed ("nugget effect") throughout the
tonne, it is remarkable that any sampling or drilling method that collects
a fraction of the total drilled material leads to quick discoveries of
large tonnage, low-grade gold deposits typical of the Andes.
Given these realities, our objective was to collect as much drilled
material as possible in a cost-effective way. We chose reverse circulation
drilling to maximize core volume and the Bondar Blaster to maximize sample
size and consistency. Both tactics increase the likelihood that coarse and
fine gold are collected but they are no guarantee that all gold will be
collected. Reverse circulation drilling is also half the cost of diamond
drilling. When Newmont embarked on an aggressive program to increase
reserves at Yanacocha in 2000, all but two of the 30 drills that operated
on the property last year were reverse circulation. Also, Argentina
Gold/Homestake drilled over 500 holes in the Valadero project to date. Of
these holes, 450 were reverse circulation holes and 50 were diamond drill
holes. The majority of these diamond drill holes were drilled to test the
deeper sections of the mineralization (as the reverse circulation drills
are limited to a depth of approximately 250 metres).
Reverse circulation drilling works by hammering or grinding the rock face
at the drill bit and using compressed air to lift the crushed material to
surface. However, drilling at Zona Verde Sur also encountered considerable
water, complicating sample collection by lowering overall recoveries and
reducing the drill's capacity to lift coarse particles. Recoveries in some
holes were as low as 50 per cent of the drill cuttings.
One recent Canadian paper included a section entitled "A Comparison of the
Free Gold Recovery of Various Drill Types" relating to placer gold mining
which is similar to field conditions experienced at Zona Verde Sur. The
author, Randy Clarkson, PEng, used radioactive gold as traces to test gold
recoveries for three types of drills. He found that reverse circulation
drilling "had an extreme range of net recoveries (from 0 to 88 per cent)
[that] would make it very difficult to determine the grade of the drill
sample with any precision." A portion of Clarkson's paper is attached. The
paper supports our belief that, despite careful precautions, we did not
achieve representative gold recoveries in our drilling programs.
Why were the results batched into a single news release? Wouldn't
hole-by-hole releases have been better? We have consistently stated that
our objective with exploration of the Cueva Blanca property is the
discovery of a bulk tonnage gold deposit. Given the low-grade nature of the
target mineralization, hole-by-hole releases would have provided
insufficient information for shareholders to accurately guage progress
toward this objective. Adequate systems are in place to ensure that no
material information on the results is available to anyone other than key
technical management.
Is there any good news to be drawn from the last program? The "Verde
corridor", a zone of highly anomalous gold values, now has a strike length
of at least 4,000 metres (two miles) and is up to 1,000 metres wide. Its
actual gold content is unclear and the roots of the mineralizing systems
remain hidden. We have compiled a large statistical database that shows a
clear and close relationship between element values in trenches and in
drilling, except for gold. The only conclusion that can be drawn is that
gold recoveries are incomplete.
So what next? From a technical perspective, we have three main projects to
finish. First, we will complete collection and analysis of additional
statistics from sampling work completed in phase II. This data will likely
prove to be key in defining the next phases of work at Cueva Blanca.
Second, we are planning bulk sampling from various locations in Zona Verde
Norte and Sur. The objective of this exercise is to more clearly define
total gold present in representative areas. Third, we plan to twin some of
the better reverse circulation holes by diamond drilling. Diamond drilling
will provide additional structural information and may lead to higher gold
recoveries.
As we have all learned from the events of Sept. 11, how we react to
difficulty in part defines who we are as human beings and communities.
Speaking for our directors and management, we remain committed and
determined to discover the orebodies that we believe exist at Cueva Blanca.
Further aspects of the plan to which we are committed will be reported as
details are finalized.
Any shareholders who wish to receive a copy of the letter, please contact
the company.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
(c) Copyright 2001 Canjex Publishing Ltd. stockwatch.com |
