Monday February 23, 1:33 am Eastern Time
Company Press Release
Yamana Secures Kalimantan Drilling Targets with CoW Signing -- Part i of ii
SPOKANE, Wash.--(BUSINESS WIRE)--Feb. 24, 1998--Yamana Resources Inc (TSE:YRI. - news) 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 than 1.2 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.
There is a map available by contacting the company at the number above or by accessing CCN's Internet Website at
cdn-news.com.
Contact:
Yamana Resources Inc.
Greg W. Taylor, 509/838-6615
509/ 838-0714 (FAX)
E-mail: gwtaylor@yamana.com
Home page: yamana.com |
