US $1.1 Million Phase 1 Exploration Program Now Underway at Santa Cruz Silver Mine, Durango, Mexico
Endeavour Gold Corp. (EDR : TSX-V) announces that a US $1.1 million Phase 1 exploration program is now underway at the Company's recently optioned Santa Cruz silver mine in Durango, Mexico. Two prospective ore zones, North Porvenir and San Guillermo, will be explored by underground ramps and diamond drilling in 2004. The objective is to outline mineable resources in each zone and prepare them for production before year-end.
The North Porvenir prospect was discovered last year when 3 drill holes returned ore grades over mineable widths within the Santa Cruz vein about 1 km northwest of the Santa Cruz mine shaft. A total of approximately 2800 m of underground development, including 1000 m of ramp access plus related crosscuts, sublevels and raises will be completed in order to explore and equip the North Porvenir mine for production.
Endeavour advanced a US $350,000 loan to Minera Santa Cruz y Garibaldi S.A. de C.V. after closing the final option agreements in May 2004 in order to commence work on the ramp. The North Porvenir ramp was collared in mid-June 2004, using the neighbouring El Porvenir mine workings to gain access to the vein.
To date, approximately 180 m of ramp development has been completed, principally along the vein footwall on the neighbouring El Porvenir property. This ramp should cross the property boundary onto the Santa Cruz mine property and encounter the prospective North Porvenir ore zone shortly.
To complement the underground exploration program, a 6000 m surface drilling program is also planned to commence in mid-August 2004 at North Porvenir. Drilling will focus on outlining the mineralization on 50 m centres so as to better guide the underground development program once it reaches the prospective ore zone.
The San Guillermo prospect was outlined in the 1980's when drilling and drifting returned high grade silver values over good widths in the Santa Cruz vein about 600 m southeast of the Santa Cruz mine shaft. At San Guillermo, mining activities in 2003/2004 have exhausted the ore reserves above Mine Level 6. Therefore, about 100 m of underground development, including a ramp and related crosscuts, was completed in July 2004 below Level 6. A small underground drilling program is also being considered for this area.
Minera Santa Cruz funded this work out of operating cash flow. Two prospective ore shoots were previously identified at San Guillermo so the ramp splits to the north and south, in order to explore both target zones. Mineralization has been intersected in the south ramp and sampling is now underway.
Underground mapping and surveying of the mine workings in the Santa Cruz mine is also underway to better assess the remaining ore reserves in the mine. A large area of high grade, mixed oxide-sulfide mineralization appears not to have been mined at Santa Cruz because it caused metallurgical recovery problems in the plant.
In addition to the drilling and ramp programs, Endeavour is also carrying out metallurgical testing and mill optimization programs at the Guanacevi process plant in order to improve the recoveries of silver and gold. RDI Resource Development Inc., metallurgical consultants, recently completed a millsite tour and concluded that:
The mill and process equipment is in good working condition. A small capital investment to recondition certain equipment items should result in some improvements in mill performance.
The plant personnel are all highly experienced operators. Given that several ball mills, flotation cells and leach tanks are idle due to lack of ore, it should be fairly simple to boost mill output once more prospective ore zones are developed.
The production of silver dore bars from reprocessing of the old oxidized tailings doubled in July 2004 to 450 tpd. All that is needed to expand it by another 50% to 750 tpd is a third pump station plus the expansion of the tailings pond to facilitate the mining of old tailings and the increase in new tailings.
A systematic metallurgical test program is recommended for the San Guillermo and the North Porvenir ores and their mill products, as well as the old tailings feeding the oxide leach circuit, in order to boost the recoveries of gold and silver in the plant.
To conclude, if the Phase 1 exploration program is successful, Endeavour and Minera Santa Cruz plan to bring the North Porvenir and San Guillermo mines into production this year. Coupled with the recent increase in tailings reprocessing and possible improvements in gold and silver recoveries, silver production from the Santa Cruz silver mine and the Guanacevi processing plant is targeted to triple up to 1.2 million oz silver per year by June, 2005.
Endeavour holds an option to acquire a 100% interest in the Santa Cruz silver mine and Guanacevi mill by paying US $7 million over a 4 year period. Endeavour can earn an initial 51% interest by January 2005 by paying US $3 million (US $1 million already paid) and spending US $1 million on mine exploration.
Endeavour Gold Corp. (EDR : TSX-V) is a small-cap exploration and mining company focused on aggressively expanding its portfolio of high grade silver-gold properties, reserves and production in Mexico. Canarc Resource Corp. holds a minority shareholding in the company and helps manage the affairs of Endeavour.
On Behalf of the Board of Directors,
ENDEAVOUR GOLD CORP.
/s/ "Bradford J. Cooke"
Bradford J. Cooke
President and CEO
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