Barrick Gold Corp -
Uchcumachay drilling under way
Barrick Gold Corp
ABX
Shares issued 375,927,171
1998-11-25 close $32.2
Thursday Nov 26 1998
See Queenstake Resources Ltd (QTR) News Release
Ms. Doris Meyer reports
Uchcumachay, Peru
Barrick Gold has begun drilling on the company's 100 per cent owned
Uchcumachay property in west central Peru. A 3,000-metre drill program is
planned as an initial test of altered, mineralized and geochemically anomalous
epithermal gold targets in rocks of the same age as Barrick's Pierina mine 130
kilometres to the north. Pierina is a plus seven million ounce gold deposit where
production will begin late this year. Annual production for the first three years is
expected to be 750,000 ounces of gold, at $50 (U.S.) per ounce.
The 6,100 hectare Uchcumachay property is in Ancash Province about 200
kilometres north of Lima. Alteration in volcanic rocks was identified by processing
Landsat thematic mapping satellite imagery and was the basis for acquiring 2,400
hectares of mineral in 1994. An additional 3,700 hectares of surrounding property
was acquired in 1996. Surface reconnaissance mapping in 1995 and 1996
confirmed the existence of strongly altered Lower Tertiary volcanic rocks,
indicative of a high sulphidation gold system. Detailed mapping and sampling in
1997 and 1998 defined drill targets based on structure, alteration and gold and
related element geochemical anomalies. A joint venture with Barrick, signed in
May 1998, includes a commitment to drill a minimum of 1,000m during the first
year.
Uchcumachay is underlain by volcanic rocks of the Calipuy formation, the same as
that found at Barrick's Pierina ore body and equivalent to Newmont's Yanacocha
operation in the Cajamarca Province in Northern Peru. Andesitic porphyries,
breccias, flows, tuffs and intrusives have been mapped in a setting of calderas and
resurgent domes. Structural breaks, trending northeast and northwest, are related
to caldera edges, and are the primary focus of high sulphidation epithermal
alteration and mineralization.
Alteration ranges from weak propylitic on the fringes of the system, through argillic
with limonite and partially oxidized pyrite, into a central corridor of moderate to
strong vuggy silica in hydrothermal breccia. Multispectral analysis of samples from
the target areas identified alunite, dickite and pyrophylite in the most intensely
silicified breccia. Alteration zones, along with geochemically anomalous gold,
define the drill targets.
Channel rock samples in the target zones outline gold anomalies correlative with
most intensely altered rocks. Ninety-two samples from the primary targets
average 0.25 gpt gold and range from .05 to 1.6 gpt gold.
Barrick plans an initial drill program of 3,000m in 10 reverse circulation holes.
Based upon results, the initial drilling may be followed by eight additional holes.
Sites for all 18 holes have been preselected based on alteration, geochemistry and
structure. Drill results will be released after logging and receipt of assays, possibly
within three to four weeks. The targets at Uchcumachay are a series of gold
deposits related to structure and volcanic statigraphy: multimillion ounce deposits
mineable by open pit methods.
The Barrick-Queenstake joint venture agreement, signed on May 28, 1998,
requires Barrick to spend a total of $2,500,000 (U.S.) by June 1, 2001, for
Barrick to earn a 51 per cent interest in the Uchcumachay property. A first year
expenditure of $500,000 (U.S.) includes the requirement to drill at least 1,000m
Following completion of Barrick's earn-in, the terms are essentially the same as for
the agreement between Queenstake and Barrick on Queenstake's North Ancash
group of 24,000 hectares of mineral properties and the agreement on the South
Ancash group of 19,500 hectares of mineral properties Barrick holds under
option.
In all cases, each party will have the option to finance its share of programs or
dilute its interest to 30 per cent, where if the program continues, the diluting party
will be carried by the non-diluting party through to a positive decision to mine. If
Barrick holds the majority interest at the time a decision to mine is made, with
respect to a project, then Queenstake will have the option to require Barrick to
finance its share of development costs at prime plus 3 per cent.
Quebrada Grande, Chile
In late September, Queenstake drilled one hole on its 100 per cent owned
Quebrada Grande, Chile property. The hole intersected post mineral volcanic
rocks and gravel to a depth of 342m where it bottomed in modestly altered sandy
limestone to a depth of 354m. No sulphides or anomalous mineralization was
noted in basement rocks, so the induced polarization geophysical anomaly and the
enzyme leach geochemical anomalies have not yet been explained.
A thorough review of geological, geophysical, and geochemical data is under way
to determine what follow-up steps should be taken at Quebrada Grande. It is
probable that additional geophysics will be recommended to decipher the complex
faulted area at and near the drill target, and also to further define a stronger IP
anomaly 3km to the west.
The location and size of the Quebrada Grande project, on the porphyry copper
trend and 20,600 hectares, make it a prime candidate for a more extensive
reconnaissance drilling program than Queenstake is prepared to undertake at this
time. Discussions are under way with a number of interested major base metals
companies interested in acquiring a joint venture interest.
In addition to the Uchcumachy and Quebrada Grande projects, Queenstake has a
drill program under way at its 60 per cent owned Guinoloza project in Mexico
and Newcrest has a drill program under way on Queenstake's Pico Machay
project in the Huancavelica area of Peru.
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