LONDON (ResourceInvestor.com) -- AIM listed junior Ormonde Mining [ORM.L], which is also listed in Dublin, has announced the commencement of a 500m drilling programme on the back of recent positive sampling results at its Tracia Gold Project in northwest Spain.
Pre drilling investigations of the 32.8sqkm property have defined a number of targets within what the company hopes will prove to be a substantial gold system. Trenching at one Tracia target area has revealed consistent mineralization of around 3.1g/t gold, but with occurrences of up to 16.4g/t.
Trenching at a second target area has identified new zones of sulphide bearing silica, and further sampling is underway at this location with results expected soon.
Elsewhere within the Tracia licence, sampling has uncovered further gold mineralization to the north of the current focus of activity, with gold grades encountered of 1-5g/t.
Several other targets within the licence have been identified by soil and rock sampling, and work to confirm these will take place concurrently with the drilling program, with an expanded program to test these resources planned for early 2005.
Prospecting at two separate local areas lying outside the Tracia licence has yielded gold grades of 80.2g/t and 11.1g/t. These samples were taken on the basis of geochemical data covering a wide swathe of the region, and more gold is expected to be discovered after further targets are selected from this database and sampled.
The company's hopes for Tracia have been bolstered by recent success at the nearby Salave gold deposit, where Rio Narcea Mines [RNC.TO] has estimated total measured and indicated gold resources of 1.5moz at 3.0g/t and is currently undertaking a feasibility study, as well as by Tracia's alleged geological similarities with multi million ounce intrusion related gold deposits elsewhere in the world.
Tracia is a joint venture with Oslo listed International Gold Exploration of Sweden, who is currently funding the project in its entirety and an agreement is in place for IGE to supply EUR260,000 of exploration funds over two years in return for a 50% interest in the licence, which is currently 100% owned and exploration conducted by Ormonde.
Ormonde's Managing Director Kerr Anderson commented on operations at Tracia, 'Our surface sampling has shown the potential for an extensive new gold system at Tracia, and we are continuing to fast track its development through the joint venture with IGE. We have defined several quality targets, and it is exciting to have our first drilling programme on this property underway. We are also extremely pleased to see high gold grades being returned by our prospecting programmes which highlight the much wider potential for discovery in this area of northwest Spain.'
The company has four other active projects in Spain:
The most promising is La Zarza, a gold and copper deposit in the Spanish Pyrite Belt, with inferred resources of 5.9Mt within which lie 950,000oz at 5.0g/t gold and 9.5moz at 50g/t silver. A resource of 2.9 Mt contains 180mlbs copper at 2.8%. Ormonde can earn a 70% interest by spending 1.8m over three years. A drilling program is in progress and metallurgical testing to determine the most feasible method of ore processing will begin in Q1 2005, to be followed by pre feasibility drilling in the second half of 2005.
Metallurgical testing by the project's previous operator recovered around 50% gold by conventional leaching, and around 80% through oxidation pre-treatment. Ormonde anticipates recovery rates of over 80% through an intense leaching and ultra fine grinding process. 80% copper recovery via a flotation technique is also expected by the company.
According to Ormonde Chairman Mike Donoghue, the company hopes to eventually develop La Zarza to production in two stages. During stage one per annum production of 30,000oz gold, 350,000oz silver and 3,500lbs copper will be established. Stage two will see a 'substantial increase' in these figures, though even stage one is unlikely to occur before 2006 at the earliest.
The Salam'on project contains 190,000oz gold within 640,000t at 9.1g/t. Ormonde can earn a 51% interest in the deposit and 120 square kilometres of surrounding exploration ground by spending EUR900,000 over two years, one year of which has already passed. Sampling is underway in the environs of the deposit and drilling to further expand the resource below the presently defined ore body is scheduled for the first half of 2005.
Trives is a gold licence option of 37sqkm where sampling has so far been positive around ancient Roman workings, and an 800m strike is indicated by soil analysis. A drilling programme is being prepared that will attempt to assess the viability of a low initial cost open pit operation that be brought to production quickly and provide the company with cash flow to fund exploration at other projects.
Finally there are the recently acquired 500sqkm Prehenita permits, in which Ormonde holds a 20% interest, extendable to 90% if exploration spending targets are met over the next four years. The permits include several high grade targets indicated by drilling conducted in the 1980s. Ormonde intends to verify the targets through sampling and geochemical work, before eventually drilling further to the existing drill intersects.
