An excerpt from Lawrence Roulston's Resource Opportunities newsletter
March 1999 issue:
San Telmo Resources Ltd.
San Telmo has a large and well located property position in the gold and silver-rich Deseado Massif region of Argentina.
Santa Cruz province in Argentina is emerging as one of the most exciting gold and silver exploration areas in the world. Anglo recently began operations on a 3 million oz gold deposit in the region, and two other projects are at an advanced stage.
With a large land position, and significant results already achieved, this small company will be an important player.
Statistics
Shares o/s: 2.9 million
Fully diluted: 3.2 million
Warrants and options exercisable at: C$0.40 to C$0.58
Price March 12 C$0.47
52 weeks: C$0.75 / C$0.38
Market cap: C$1.4 million
Working capital: C$0.1 million at February 28, 1999
Trades: STA – VSE
SEC number pending
The October 1998 start-up of Anglo's Cerro Vanguardia mine in the Deseado Massif area of brought a lot of attention to this area. After working in Argentina for four years, the president of San Telmo had the knowledge to stake a large area of very favorable ground on behalf of San Telmo. Subsequent work has confirmed the potential of these properties.
Argentina recently opened for exploration
In spite of the rich mineral potential of Argentina, exploration only started in earnest after the country created a new mining code in 1994. This code created an attractive environment for the international mining sector that has thus far facilitated the development of several world class mines and many discoveries by junior companies. The initial focus by mining companies was along the border with Chile. Decades of exploration in Chile produced numerous major gold and base metal deposits, mostly in the Andes Mountains near the border with Argentina. Lines on a map do not govern geology. Once Argentina adopted a favorable mining code, the mining companies rushed in.
A 3 million oz discovery opens up a new area
In sharp contrast to the high Andes area, Santa Cruz is at a low elevation and is blessed with gentle topography. All parts of the region are easily accessible. The climate is moderate and dry, allowing for a long exploration season. In general, the area is much like central Nevada.
The interest in Santa Cruz province is driven by the recent start-up of a major gold-silver producer. Anglo-American, a unit of the world's largest gold company, began production last October at its Cerro Vanguardia Mine, which is now producing 170,000 ounces of gold and 1.7 million ounces of silver a year. Reserves are 9.1 million tonnes at 9.7 g/t gold and 113 g/t silver.
Two other companies have advanced stage projects in Santa Cruz province, and numerous other companies, including Homestake and Barrick, are actively exploring in the area.
Favorable geology, the same type of rock that hosts the Cerro Vanguardia deposit, is found throughout the region.
This region – known as the Deseado Massif – is a major epithermal gold-silver district. The area is dominated by thick sections of Jurassic age volcanics. Major regional faults are the controls for gold deposits.
Large and well located land position
Chris Dyakowski, San Telmo's president, is a geologist who has worked extensively in Argentina for the past four years. As one of the early geologists to recognize the potential of Santa Cruz province, he was able to acquire, by staking, several well located properties for San Telmo.
San Telmo holds a 100% interest in 25,000 hectares (nearly 100 square miles) of mineral rights in 4 claim blocks within the Deseado Massif. There are no royalty interests or back-in rights.
High grade assays from El Condor property
The El Condor and Crown Jewel properties of San Telmo are located on the same regional fault structure that intersects the Cerro Vanguardia property and Silver Standard's Manantial Espejo property. That fault structure is believed to be the controlling feature for gold and silver on the other properties. There is quartz veining and other silicification, indicating that there was active hydrothermal activity in the area. Three samples from the El Condor property returned values of 3.4, 22.8 and 132 g/t gold. This favorable geology, in an area known to host substantial deposits, together with a sample that assayed over 4.5oz/t gold is extremely encouraging. The mineralization discovered on these properties is the same low sulphidation epithermal gold-silver type as the nearby Cerro Vanguardia deposit.
One San Telmo property is adjacent to a spectacular discovery
San Telmo's Eggs property is located adjacent to Yamana's Bacon deposit. On March 8, Yamana reported the discovery of a spectacular high-grade pod of gold and silver on their property. Assays include 2,200oz/t silver with 11oz/t gold and 3,800 oz/t silver with 1.2 oz/t gold. Drilling is continuing on the Yamana property, and is sure to attract considerable attention to the area. San Telmo will be looking for extensions of the Bacon mineralization on its Eggs property.
Other properties with excellent potential
Several other claim groups also have favorable geology and the potential for precious metal discoveries.
Management with knowledge of Argentina
Christopher Dyakowski, president, is a geologist who has been involved in financing and managing public companies for the past 20 years. He has considerable experience supervising exploration and drilling programs. For the past four years, he has focused on locating and securing mining properties in Argentina.
Alex Michalatos, director, is a business man with financial and mining experience.
William Schmidt, director, is a lawyer who has practiced securities law since 1971 and has been a director of several resource companies.
Ken Hicks, geological consultant, has lived in Argentina for several years. He is knowledgeable about Argentina geology, and well connected in the country.
Financial
San Telmo completed its initial public offering only last year, raising C$350,000. It is a new company, with only 2.9 million shares out. It needs further financing to continue its work. This should not be difficult, given the small number of shares out, and the property position in an area that is getting a lot of attention.
The Opportunity
The Deseado Massif region of Argentina is an extremely attractive region to explore for gold and silver. With a 3 million-ounce gold deposit now in production, and two advanced projects, the region has demonstrated that it has substantial geological potential. Numerous companies, including some of the largest gold producers in the world, are currently exploring for gold and silver in this area.
San Telmo has a large and well located property position in which it holds a 100% interest. Although still at an early stage, the San Telmo properties have favorable geology and excellent exploration potential.
San Telmo is conducting on-going work on the El Condor and El Aguila properties to further define the epithermal gold-silver targets discovered earlier this year. Trenching programs, to start soon, will pinpoint the targets for the drilling to be conducted later this year.
With approximately 3 million shares issued, and a market cap of only C$1.5 million, San Telmo has enormous upside potential from further developments on its extensive Argentina property holdings.
For further info contact: Investor Relations, San Telmo Resources
toll free 1-877-646-5513
or www.santelmoresources.com
Resource Opportunities is written, edited and published by Lawrence Roulston, 3389 Radcliffe Ave., West Vancouver, BC, V7V 1G7, Canada, Tel: (604) 618-4756, fax (604) 602-1016, e-mail lroulsto@uniserve.com
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