NEWS RELEASE
May 13, 1999
VSE-EMG
Sedar Profile #00003879
News Release
SANTA ROSA PROJECT - 1999 Work Programs
The Santa Rosa project is entering the next phase of development.
Continued work on the recently announced pit constrained inferred
resources of 2.18 million tonnes @ 2.87 g/t Au (0.09 oz/t) and 46.7 g/t
Ag (1.50 oz/t) has provided new significance for two of the previously
unrecognized components.
I) The existence of high grade gold-silver drill intercepts
II) The presence of a mixed zone of oxide and sulfide material
HIGH GRADE GOLD-SILVER DRILL INTERCEPTS
Near surface high grade gold-silver mineralization has been located as
reported in the Company's news release dated April 13, 1999. The
grade of this mineralization has been computed to average 25.68 g/tonne
gold and 91.73 g/tonne silver and drill intercept widths vary from 4 to 10
metres. Structural interpretation indicates that NNE trending high angle
faults have laterally displaced the continuity of these high grade areas.
Further investigation is required to properly evaluate the significance and
controls on these intercepts. The 1999 work program has been designed
to complete this geological evaluation.
SIGNIFICANCE OF THE MIXED ZONE OF
MINERALIZATION
Metallurgical
The combination of the oxides, partially leached material (RIPIOS) and
mixed zone of mineralization (believed to contain over 50% oxides), first
reported in Jaramillo's inferred resource estimate (April 13, 1999) now
provide, sufficient grade and tonnes to justify a mineral treatment process
route change from the Modular C.I.P. plant to a lower cost leach
approach. Representative samples of the newly recognized mixed zone
mineralization now need to be tested for actual recovery. Extensive
testing has been done on the oxide samples and has demonstrated that
greater than 80% gold recovery occurs in less than 10 days. This test
work was performed by SGS Laboratories, Peru. It is forecast that a 15
day cycle to extract more than 80 per cent gold and more than 30 per
cent silver will be achieved. Based on this assumption, it is proposed that
the material would then be recycled to a permanent leach pad to extend
the leach time and improve recovery of silver. An extensive test program
has been designed and put out to tender. The successful company has
now been chosen. Test work will begin early June 1999 and should be
complete within 45 days. The new test criteria include cure and
agglomeration, which should improve upon already acceptable results.
Project Finances
Concurrent with the additional metallurgical testing will be the finalization
of project financial requirements. A new capital cost estimate and
schedule has been prepared by Independent 3rd Party, Crefan
Consultants, reflecting the new process route. A mining plan in 6 meter
blocks and a complete pit design has been developed by Mining
Engineer A. Chavarry, an Independent 3rd Party. Chavarry has also
calculated complete mining and operation costs (from pit development
through to produced metals). Chavarry has more than 20 years
experience in similar applications in Peru.
The feasibility for the heap leach alternative will be finalized over the
coming months to support the project finance efforts. Initial review is
encouraging with recovery costs per ounce of gold, estimated to be
substantially below the previous levels. When silver credits are taken into
account, net recovery costs for gold are targeted to be among the lowest
in the industry. The net result of low operating costs should be two fold -
a larger tonnage of economic material available and substantially
improved cash flows.
ADDITIONAL GEOLOGICAL POTENTIAL
Field work is scheduled to begin shortly. A topographical survey
covering a radius of approximately 3 km from the existing "open pit zone"
will be completed. Soon after, geological work consisting of detailed
mapping, trenching, relogging of Cambior drill core, and RC cuttings will
be undertaken. Geological field work will also concentrate on exploring 6
additional targets that have strong IP geophysical responses. These
targets are typically covered by limonite stained soils, very similar to
those adjacent to the "open pit zone". The Company believes that similar
mineralization may underlie these much larger anomalies, with possible
near surface gold-silver bearing oxides. This work will confirm the
current geological interpretation of the inferred resources within the "open
pit zone" and will help define new drill targets.
The gold-silver resource identified at Santa Rosa is a low sulphidation
epithermal deposit and is structurally controlled by an east-west trending,
south dipping low angle fault. Mineralization lies within dacite volcanics,
limestones and quartz monzonite. The deposit includes oxide, mixed
(oxides +/- sulphides) and sulphide zones. Most of the mineralization lies
in the oxide zone, where gold is free and fine grained, and is
characterized by manganese and iron oxides. In the sulfide zone,
mineralization is mainly composed of pyrite and minor amounts of base
metals.
Mr. Lindsay R. Bottomer, P. Geo. has been retained by the Board to
advise, audit and verify the Santa Rosa field program and evaluate all
available technical data.
The Santa Rosa property is located in Southeastern Peru, approximately
550 km SE of Lima at an elevation of 3,900 metres above sea level. The
property has an area of 10,840 hectares comprising 16 mining
concessions. El Misti Gold Limited holds a 100% interest in the project
through our wholly owned Peruvian subsidiary El Misti Gold S.A.
For further information, please contact John Huguet or Marie Antoinette Shields
– Market Finance Development.
Phone: (604) 681-6186 Direct Fax : (604) 681-3652 Web site :
www.elmisti.com
On behalf of the Board,
John Huguet
Chairman & CEO
The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or
accuracy of this news release.
1005 - 750 W. Pender Street, Vancouver, BC, Canada V6C 2T8
Tel: (604) 681 6186 Fax: (604) 681 3652 Toll Free: 1-888-356-4784
Email: info@elmisti.com Website: www.elmisti.com
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