Here is Part 1 of the release:
Regards
Dan
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NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: YAMANA RESOURCES INC.
TSE SYMBOL: YRI
FEBRUARY 24, 1998
Yamana Secures Kalimantan Drilling Targets with CoW
Signing (Part i of ii)
SPOKANE, WASHINGTON--Yamana Resources Inc. has secured the right
to proceed with its plans for several promising drilling targets
in Kalimantan, following the signing of its primary Seventh
Generation Contract of Work (CoW). Yamana's CoW was formally
signed February 19 in Jakarta, by Minister of Mines and Energy,
Ida Bagus Sudjana, on behalf of the Government of Indonesia, on
instructions from President Suharto.
A CoW is a legally binding agreement which, in this case, gives
Yamana an exclusive contract to explore for precious and base
metals, as well as to mine, refine and sell these minerals either
inside or outside of Indonesia. The CoW system is designed to
ensure that future government regulations do not change the legal
rights and obligations, including taxation and royalty
requirements, of the contracting company. The Seventh Generation
CoW stipulates a royalty of US$7/oz Au and US$0.065/oz Ag.
Yamana is the owner of the rights associated with the CoWs, while
Barrick Gold, its business partner on the project and Yamana's
largest single shareholder (13.2 percent), has certain back-in
rights. Under the terms of the agreement, Barrick has the right,
through full funding, to develop to commercial production any
resource over 750,000 ounces of gold found on up to three CoWs. In
doing so, Barrick earns a 75 percent interest in those CoWs,
leaving Yamana with a 25 percent carried interest.
Yamana's CoW covers Block 1(see maps A and B), a 165,000-hectare
property within the Kalimantan Magmatic Arc, 170 kilometers
northeast and along the volcanic corridor from the Kelian mine, a
world-class deposit which produced 484,000 oz Au and 335,000 oz Ag
in 1997.
Before the signing, Yamana had been exploring in Kalimantan under
licenses, known as SIPPs, which allowed reconnaissance, geologic
surveys and other preliminary field work, but not serious
drilling.
Victor Bradley, Yamana's President and CEO, commented, "We are
pleased to have gained the security of tenure we needed to take us
to the next phase. This is one of the most prospective gold belts
in the world and we are poised to make a discovery in an area
which has yielded excellent silver and gold values from outcrops."
Bradley noted that Yamana had hired independent consulting
geologists and engineers, Watts, Griffis & McOuat (WGM) to
scrutinize its operations to date. Their due diligence concludes
the work was professionally conducted and the results are valid.
Richard Walters, Yamana's Exec. VP and COO, commented, "We have
ten exquisite drilling targets, on three prospects, and good
geologic reasons to believe we have found a new epithermal gold
and silver district concealed in the jungle."
In January 1996, Yamana received Approval in Principal for 12 CoW
application blocks covering 2.7 million hectares (27,000
kilometers2) in Kalimantan. In the second half of that year,
Yamana began to examine the area, conducting a comprehensive
remote-sensing program. This entailed landsat and radar imagery
interpretation, as well as an airborne geophysical mapping
program, including aeromagnetic and radiometric surveys over much
of its property position. Yamana also contracted a helicopter for
most of 1997, allowing access to several remote areas which had
never been explored. Field crews entered this dense jungle terrain
to examine a number of areas identified primarily through remote
sensing. They collected more than 5,000 rock-chip and
stream-sediment samples, and had more than 50,000 geochemical
analyses performed on them.
Based on this initial exploration program, Yamana reduced its CoW
applications to nine (1.7 million hectares) and submitted one,
Block 1, for the current signing. According to Indonesian
officials, Yamana's eight remaining applications are included in a
second group of CoW applications which are expected to be
considered for approval later this year.
Yamana's geologists were particularly drawn to an area of Block 1
based on landsat and radar imagery which helped to identify a
regional circular feature, 4 kilometers across, located at the
intersection of two major cross-cutting faults (see maps B and C).
In visiting this structural anomaly, the field team dis-covered
numerous auriferous hydrothermal breccias associated with dacite
porphyry dikes and stocks intruding comagmatic volcanics and
underlying metasedimentary basement rocks. Subsequent mapping and
sampling have defined a zone at least 10 kilometers long and 2 to
5 kilometers wide in which there are many strong showings of gold,
silver, arsenic and antimony. The better gold and silver values
occur within large, silica-soaked, arsenic-rich brecciated masses
of mudstones, peripheral to subvolcanic intrusives. Yamana has
established drilling targets in this area and is also focusing on
nearby mineralized sites (see Technical Review).
Geologically, the basement rocks consist of strongly folded meta
shales, mudstones and siltstones, along with minor sandstone,
limestone and conglomerate units. These rocks are overlain by
andesite volcanics, especially in higher elevations. Both basement
rocks and volcanics are intruded by "high level" felsic porphyry
intrusives of the Sintang suite.
Said James McGregor-Dawson, Yamana's Indonesian manager, "We
believe we are looking at an eroded volcanic center of
mid-Tertiary age and that the circular feature is almost certainly
a magma collapse feature. The many 'high-level' porphyry dikes
indicate that the main volcano-magma chamber is probably not far
below the present land surface." He added, "Several other
interesting targets occur up to a further 10 kilometers along
strike and it is quite likely that new targets will emerge once we
reinitiate field work."
Assays were provided by PT Geoservices and Yamana sent more than
10 percent of those pulps for check assays to another independent
laboratory, PT Intertek Testing Service. For its part, WGM
investigated the methodology, precision and accuracy of both labs
and collected their own duplicate field samples from Yamana's
properties, having them assayed by a third company, PT Indo Assay
Laboratories. According to WGM's audit report:
"On the basis of check sampling and assaying carried out by WGM
and under WGM's sole super-vision, we conclude that there is no
justifiable reason to doubt the accuracy of the previously
reported gold and silver contents of rock-chip and other samples
formerly analyzed from the Block 1 Contract of Work ... Our
analyses indicate no evidence for sample tampering or selective
sampling to improve the outcome of sample analysis ... (Yamana's)
senior exploration personnel and management are well focused on
the issues of data quality and security, and actively take steps
to ensure Yamana's policies are followed ... The exploration
program has been appropriate and well planned. Exploration
techniques have been executed in a professional manner consistent
with good exploration practice. Consequently, Yamana has moved
rapidly from reconnaissance to prospect definition in the Block 1
CoW area."
Difficult financial market conditions and serious concerns about
economic and operating conditions in Indonesia motivated Yamana's
management - with the full support of its partner, Barrick Gold -
to sharply reduce its spending late in 1997. Operations both in
the field and in the Jakarta office were reduced to a core group
of employees who are finishing building and organizing the
technical database, fulfilling regulatory reporting requirements
concerning maintenance of the CoWs and maintaining the project's
infrastructure. Observed Bradley: "Once the Indonesian situation
stabilizes, we will begin to work with Barrick on plans to drill
the targets we've identified, and to assess other emerging target
areas.
Yamana Resources Inc. is a Canadian exploration company holding
interests in a variety of base- and precious-metals projects in
Argentina, Chile, Paraguay, Papua New Guinea, Indonesia and
Washington state.
Technical Review - Block 1 (See Map C)
Prospects with established drilling targets:
HSB-10 covers at least four drill targets. This prospect is more
than1.2 kilometers long and up to 200 meters wide and contains
many outcrops of brecciated metasedimentary rocks and stockwork
intrusives with high precious-metal values. A large percentage of
hundreds of reconnaissance samples returned values of 1 to 7.8 g/t
Au, with tens of times as much silver. Hand trenching has exposed
individual breccia bodies up to 150 meters in length and 20 meters
wide. This breccia typically contains 0.10 to 3.50 g/t Au and 5.0
to 50.0 g/t Ag. Antimony values range up to 2.2 percent and
arsenic is up to 5 percent. There are highs of 7.84 g/t Au in
silicified breccia with sediment and intrusive fragments
(polymictic breccia) and 4,129 g/t Ag in an associated quartz
vein. On another breccia, 350 meters by 50 meters, the best 33 of
40 rock-chip samples average 1.42 g/t Au with 100.2 g/t Ag.
Related exposures of phyllic-altered, quartz feldspar porphyry
quartz monzonite with disseminated arsenopyrite commonly run 1.0
g/t Au. This geologic setting indicates a possible underlying
porphyry gold-type target of exceptional potential.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Yamana Resources Inc.
Greg W. Taylor
Vice President, Corporate Development
(509) 838-6615
(509) 838-0714 (FAX)
E-mail: gwtaylor@yamana.com
Home page: yamana.com
There is a map available by contacting the company at the number
above or by accessing CCN's Internet Website at
cdn-news.com. |
