Bolnisi Gold NL is an established Australian gold producer through its 50% interest in the Quartzite Project in Georgia. Significant cash flow generation has enabled the Company to continue the advancement of other projects. The Palmarejo Gold Silver Project in Mexico and the Roseby Copper Project in Australia are establishing the Company's future for development and growth. The Company is financially sound with strong cashflows from unhedged gold production. The company is debt free.
Palmerejo Au-Ag Project, Temoris District, Chihuahua.
The Company has entered into an acquisition agreement over a number of properties, known as the Palmarejo Project, and has pegged and filed for a large claim, known as Trogon, which surrounds the Palmarejo Project. This new project is located some 15 kilometres NW of the town of Temoris in Chihuahua State. The Company continues to examine a number of gold-silver properties in the Sierra Madre Occidental mineralised province mostly in the state of Chihuahua.This region is rugged, although accessible (with a daily passenger and freight rail service to Temoris), country with numerous occurrences of gold-silver mineralisation many of which have been mined intermittently on a small scale by Mexican miners as far back as the Spanish invasion. At current silver-gold prices several such deposits are potentially very profitable for medium sized mining companies, as for example the recently developed San Sebastian mine of Hecla Mining in Durango State producing from an underground decline around 450 short tons per day of 8 to 9 g/t Au and 700 to 800 g/t Ag trucked 70 kilometres to a mill. Production for the first half of 2003 from this mine was 2 million ounces silver and 23,000 ounces gold at a cash cost of less than US$2 per ounce of silver and US$150 per ounce of gold.
The acquisition agreement for the Palmarejo Project, which can be terminated with 30 days notice by the Company, grants the Company a 5 year exploration right over the project for escalating six monthly payments totalling US$385,000. At the conclusion of the 5 year period, 100% ownership of the Palmarejo Project will be transferred to the Company for a payment of US$115,000. The Trogon claim covers an area of some 3,835 hectares and surrounds the Palmarejo Project and other properties of interest along the major NW and WNW trending structures, approximately 16 kilometres NW/SE by 3 to 5 kilometres NE/SW. The major NW and WNW trending structures in the Palmarejo and Trogon claims host a number of ore shoots that range from 600 to 2,000 metres in length. Assay results indicate ore grade mineralisation over the entire 7 kilometre strike length of the central and southern portions of the NW structure. No past exploration drilling has been carried out on any of these properties/structures.
All properties under the Company’s control have undergone some form of selective underground mining to shallow depths (< 100 metres). Gold and silver mineralisation has been formed during a low-sulphidation epithermal event and is preferentially hosted in Tertiary felsic to intermediate volcanic rocks. Mineralisation in the main properties is structurally controlled within the regional NW trending structures and the WNW cross-cutting structures. Mineralisation at the Palmarejo Project occurs at the intersection of the 'La Prieta' and 'La Blanca' structures. La Prieta trends WNW-ESE and dips 48 degrees to the SW. The La Blanca structure trends NW-SE and dips 60 degrees to the SW. The structures are filled by a quartz-vein breccia unit as a result of several phases of hydrothermal activity. Intense stockwork has developed within the rifted block at the intersection of the two faults. The veining within the La Prieta structure is considered the richer due to a high content in silver represented by a dark pervasive mineral cerargyrite. The majority of earlier underground mining was concentrated within the La Prieta structure. Sub-vertical footwall splays were recognised at the eastern end of the La Prieta structure and are predominantly filled with chlorite-goethite/limonite (after pyrite)-sericite-quartz and may contain Au/Ag mineralisation in an oxidised host rock. This is similar to the structural setting and controls on mineralisation at other deposits in the Sierra Madre. After the initial surface and underground sampling program within the Palmarejo Project and Trogon claim areas, the Company immediately commenced a 25 hole RC drill program.some of the exceptional results include:
· 12.2 metres @ 19.2 g/t AuEq (including 1.5 metres @ 100.1 g/t AuEq)
· 13.8 metres @ 8.1 g/t AuEq
· 12.2 metres @ 9.8 g/t AuEq
· 6.1 metres @ 8.8 g/t AuEq
· 4.6 metres @ 8.4 g/t AuEq
· 30.5 metres @ 6.5 g/t AuEq
· 13.8 metres @ 3.2 g/t AuEq
· 10.7 metres @ 5.7 g/t AuEq
· 16.8 metres @ 4.3 g/t AuEq
· 9.2 metres @ 3.4 g/t AuEq
· 33.6 metres @ 6.6 g/t AuEq (including 6.1 metres @ 14.2 g/t AuEq)
· 6.1 metres @ 6.1 g/t AuEq
· 22.9 metres @ 4.3 g/t AuEqNotes:
· Assays have been calculated using a 1.0 g/t AuEq cut off, no top cut and a gold to silver ratio of 1:75.
· The internal voids are historic underground workings and have been excluded from the mineralised intervals reported above.Holes 1 to 3 intersected a broad stockwork zone near the junction of the two principal vein systems, La Blanca and La Prieta, in Level 6, the uppermost level of the old Palmarejo Mine. There are three deeper levels below Level 6 and above the topographic base of the known system.
Holes 4 and 5 were collared 140 to 180 metres east of the first three holes and may have intersected the discrete La Prieta vein system. Hole 5 intersected underground fill within an extensive underground mined interval of 15.2 metres (from 94.5 metres to 109.7 metres).
Holes 6 to 12, indicate the persistence and continuity of the La Prieta vein system over 140 metres further to the East of holes 4 and 5.
Holes 13, 14, 15 confirm the strike extension of the La Prieta structure to over 500 metres. Although hole 14 did not report any significant mineralisation it is believed that this is due to a localised “neck” in the structure which seems to be supported by the discovery of significant outcropping values a further 500 metres east of 14 (Trench 102, 7 metres at 1.7 g/t Au, 195 g/t Ag, 4.3 g/t AuEq; Trench 103, 8 metres at 3.4 g/t Au, 420 g/t Ag, 9.0 g/t AuEq; Trench 104, 4 metres at 1.0 g/t Au, 150 g/t Ag, 3.0 g/t AuEq).
Hole 18 confirmed strike continuity and strong near surface mineralisation 40 metres West of hole 1.
Holes 16, 17, 19, 20, 21, 22 identified an up-dip and down-dip extension of the mineralisation intersected in holes 1 to 9, indicating continuity of mineralisation down to 80 metres below natural surface over 200 metres of strike.
Drilling continues with a minimum of 20 new holes planned to test along strike and down dip extensions.WWWinfo 13Mar04
