Virgen resource estimate
Gitennes Exploration Inc GIT
Shares issued 26,212,831 Oct 16 close $0.60
Mon 19 Oct 98 News Release
Mr. Jerry Blackwell reports
The company would like to update shareholders on exploration and
development activity at its Virgen project in north-central Peru. This
includes the discovery of a new zone of oxide gold mineralization, Zone
Cuchi, and a preliminary resource estimate for the Zone Rio Suro.
Zona Rio Suro: The company has received an in situ mineral resource
estimate from Roscoe Postle Associates for the Zona Rio Suro. RPA is an
independent firm of geological and mining consultants, in the business of
rendering independent opinions on ore reserves, mineral resources, project
economics and valuations. The Zone Rio Suro is one of ten mineralized gold
zones that have been found to date on the Virgen property, and is
sufficiently advanced to permit a preliminary resource calculation.
Category Tonnes Au Au
g/t ounces
Measured 2,435,000 2.15 168,400
Indicated 1,162,000 0.98 36,500
Total 3,597,000 1.77 204,900
Inferred 2,972,000 1.71 163,900
The measured and indicated resources are restricted to a 140 metre long
segment of the Zone Rio Suro with medium to high confidence estimation
parameters, coinciding with the area of underground drilling and
development. The inferred resource, considered to be a lower confidence
estimate, covers the overall 700 metre strike length of Zone Rio Suro,
where drilling is sufficient to satisfy the calculation methodology, but
does not satisfy the criteria used for the measured and indicated
categories.
Methodology: Resources were estimated using a computer generated 3-D block
model. Block grades were estimated using the inverse distance square
method, two metre sample composites, and an interpolation ellipse of 15 by
25 by 25 metres. The geological information, supplied by Gitennes, was
compiled on cross-sections and integrated into the database. The
mineralized zones were projected halfway to the next section, or 25 metres,
whichever was smallest. All material outside the interpreted zones, or
beyond the 25 metre search radius, was excluded. All drill holes are
incorporated, including those with poor recovery. Intervals with core
recovery below 20 per cent were assigned zero grade. Assay values are
uncut, and a cutoff grade of 0.3 g/t was used.
RPA estimated the resource based upon assay results from 20 surface core
holes, 16 underground core holes, 20 reverse circulation holes, surface
trenches and underground panel samples. A total of 7,178 samples was used,
6,507 from drill holes.
The report includes the following comments:
RPA is of the opinion that the potential to increase the resource at Zona
Rio Suro is good. It notes that the inclusion of core holes from the
initial drill program, where core recovery was very poor, results in grade
block estimates lower than expected. Also, in some areas drill hole spacing
exceeds the maximum extrapolation distance, resulting in blank holes in the
block model. Additional drilling in these areas would likely result in a
tonnage increase.
RPA visited the property during April 1998. Check samples collected by RPA
confirm the presence of gold mineralization and compare favourably with
Gitennes' results.
In RPA's opinion, the quality of the work carried out on the Virgen
property was very high and in keeping with general industry practices. RPA
does, however, recommend that the company implement a more systematic check
assay program, and try to obtain downhole directional survey data more
often.
RPA recommends that:
A scoping study be commenced to examine the economic viability of the Zone
Rio Suro;
The segment north of Rio el Suro be tested with additional drill holes
(where holes are too widely spaced to permit a satisfactory resource
calculation); and
Further exploration work be carried out on the remainder of the Virgen
property in order to evaluate the potential of the lesser explored Centro,
Alumbre, Paloquian and Cuchi zones.
Based on the results to date, it is likely that that the Zona Rio Suro
could readily be developed into a low cost mining operation. Gitennes
concurs with the recommendations made by RPA and is in agreement with the
preliminary resource calculation. It appears likely that the resource base
will be increased with additional drilling, both within the Zona Rio Suro
block model area, and along strike. This particular zone of oxide gold
mineralization occurs in such a fashion as to favour open pit extraction,
with a low strip ratio and minimal blasting. Metallurgical tests indicate
that run of mine ore may be heap leached, with a minimum 80 per cent gold
recovery.
Exploration Update: Following completion of the underground drill program,
field crews reviewed the project database and conducted additional
fieldwork. Several new targets have been found, and several previously
known targets have been upgraded in priority.
An important new target is 1,500 metres east of Zone Rio Suro, referred to
as Zona Cuchi. A 120 by 500 metre, high contrast soil geochemical anomaly
led to the discovery, in an area of subdued relief and few outcrops. Within
the vicinity of the soil anomaly are outcrops of oxidized quartzite
breccia. The outcrops were chip sampled (117 samples with an average length
of six metres), which yielded consistently anomalous gold and silver values
(average 463 ppb gold and 10.4 ppm silver). Within the anomaly, 21 samples
grade from 0.5 g/t to 2.1 g/t gold, and two samples were highly
mineralized. One reported 9.84 g/t gold and 684 g/t silver across 11.4
metres, while the second reported 14.16 g/t gold and 280 g/t silver across
2.1 metres. These first pass results are abnormally high with respect to
other zones on the property, suggesting an important drill target is
present.
A second area of highly anomalous values has been found 600 metres
northwest along strike of Cuchi, referred to as Zona Scorpion. Here outcrop
sampling has roughly outlined a 300 by 50 metre area grading between 0.45
and 1.68 g/t gold and 10.7 and 235 g/t silver.
Additional work has also been done along the Alumbre fault structure, 500
metres north of the end of Zona Rio Suro. Isolated outcrops expose a 70
metre length of mineralized breccia similar to the high grade breccia
underground at Zone Rio Suro. Chip samples range from 0.26 to 2.27 g/t
gold. The mineralized exposures warrant drilling, and suggest that much of
the Alumbre structure remains prospective.
All these zones remain untested by drilling, suggesting the potential is
high to prove additional near-surface oxide gold reserves. The company's
detailed work has similarly upgraded the Paloquian targets, and has
reinterpreted the results of previous drilling at Zona Alumbre, suggesting
that earlier drilling was not always oriented properly to test this high
grade, blind target.
Two diamond drill rigs and the camp remain on site, and exploration can
resume on short notice. Several companies have approached Gitennes
regarding the project, and discussions are continuing. The Virgen property
is under option to Gitennes' Peruvian company, Compania Minera Kori Pampa,
with the right to earn a 100 per cent interest.
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