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El Callao Mining Corp -
El Callao receives Lo Increible drilling results
El Callao Mining Corp
ECM
Shares issued 41,090,418
1999-09-15 close $0.09
Thursday Sep 16 1999
Mr. Clive Johnson report
El Callao has received assay results from a recently completed geostatistical drill
program on the open pit reserves on the Lo Increible property in Bolivar state,
Venezuela. This drill program is the first phase of the feasibility study drill program.
The program's results will aid in assessing grade variability within the zone and help
determine optimum drill spacing for the feasibility study.
The drilling consisted of 19 close-spaced (12.5 metres by 12.5 metres to 12.5 by 15
metres) HQ diamond drill holes (geostat cross) along strike and down dip on the
mineralized structure at La Victoria and La Cruz zones. Eleven holes totalling 1,100
metres were drilled at La Victoria and eight holes totaling 800 metres were drilled at La
Cruz. The data, assay results and grade variability from the close spaced holes will be
reviewed by Mineral Resources Development Inc. (MRDI) of San Mateo, Calif., which
worked with El Callao on the prefeasibility study.
Significant results from the program are as follows:
Hole Interval Length True Au
No. (m) (m) Width(m) g/t
La Victoria Zone
99-263 25.2- 35.6 10.40 10.40 6.51
42.1- 45.9 3.80 3.80 1.49
54.4- 61.2 6.80 6.80 5.16
99-264 35.8- 51.0 15.20 15.20 3.59
63.0- 72.5 9.50 9.50 3.04
99-265 45.1- 50.5 5.40 5.40 127.77
cut to 34 g/t
45.1- 50.5 5.40 5.40 22.57
59.5- 65.8 6.30 6.30 1.70
70.4- 79.9 9.50 9.50 3.00
99-266 68.9- 74.4 5.50 5.50 2.94
82.0- 97.3 15.30 15.30 3.70
99-267 71.6- 78.5 6.90 6.70 6.32
82.2- 89.1 6.90 6.70 7.74
99-268 77.0- 94.3 17.30 16.80 6.00
99-269 44.8- 68.5 23.70 19.90 5.10
73.6- 80.5 6.90 5.80 10.19
87.5- 91.8 4.30 3.60 1.54
99-270 50.2- 53.3 3.10 2.60 1.75
58.2- 65.3 7.10 6.00 3.52
71.6- 90.3 18.70 15.70 4.61
99-271 69.9- 80.4 10.50 8.80 4.07
99-272 55.1- 60.6 5.50 4.60 8.10
67.1- 72.1 5.00 4.20 5.78
99-281 122.0-125.8 3.80 3.00 10.93
139.6-151.1 11.50 8.90 10.69
155.6-156.9 1.30 1.00 5.94
The high-grade intersection in hole 99-265 appears to be localized as adjacent holes did
not intersect similar material, however, the intersection highlights that infill drilling has
the potential to encounter further high-grade pods that could increase the average gold
grade of the La Victoria deposit.
Hole Interval Length True Au
No. (m) (m) Width(m) g/t
La Cruz Zone
99-273 53.6- 63.6 10.0 8.2 8.41
82.1- 86.3 4.2 3.4 2.24
99-274 56.3- 68.8 12.5 10.5 5.37
81.9- 86.1 4.2 3.5 1.30
99-275 48.0- 59.7 11.7 11.5 4.61
99-276 54.9- 72.5 17.6 14.3 3.18
99-277 62.0- 79.0 17.0 12.1 6.29
99-278 73.0- 89.5 16.5 9.9 7.56
103.0-105.0 2.0 1.4 3.34
99-279 55.0- 66.6 11.6 9.6 8.28
99-280 49.0- 54.5 5.5 4.4 7.00
61.5- 70.5 9.0 7.2 2.89
These results are consistent with previous drilling at La Cruz.
St. Lambert Drilling completed the drill contract and Monitor Labs in Puerto Ordaz,
Venezuela, is the primary lab performing all gold analysis. As part of El Callao's quality
control program, one standard, one duplicate and one field blank is inserted every 20
samples. In addition, one in 15 duplicate pulp samples from the primary lab will be sent
to Chemex Labs in Canada for confirmation. One in 20 of these will include a standard.
The 1998 prefeasibility study reported a diluted mineable open pit reserve of 11.4
million tonnes grading 3.14 grams per tonne gold for a total of 1.1 million ounces of
recoverable gold from six open pits. The prefeasibility study was based on data from
268 drill hole (43,277 metres) drilled by El Callao between 1994 and 1997. The Victoria
and La Cruz deposits account for 780,000 ounces of gold or 71 per cent of
recoverable ounces. The prefeasibility study recommended processing 3,000 tonnes of
ore per day for the first six years. Ore would be processed with a conventional CIL
circuit with gold recoveries of 92 per cent. The operation would produce an average of
97,000 ounces of gold per year over 11 years. The average waste to ore stripping ratio
would be 6.74 to 1. Direct operating costs are estimated to be $167 (U.S.) per ounce
and total costs, including capital, would be $235 (U.S.) per ounce of gold. The project
carries a pretax internal rate of return of 26.1 per cent at $325 (U.S.) per ounce gold
and 19.9 per cent at $300 (U.S.) per ounce of gold.
An additional significant gold resource below the proposed open pits will not be
addressed during the feasibility study. The grades and widths of the material below the
pits could sustain an underground mine. The underground potential will be further
evaluated at a later date.
Bema Gold owns 38 per cent of El Callao and manages its affairs.
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