The following information is provided for Pacific Rim's El Dorado gold project. Click on a link to go directly to that section.
Location: El Salvador, 65 km east of San Salvador and 10 km west of Sensuntepeque.
Property Size: 144 square kilometers
Ownership: 100% Pacific Rim Mining Corp.
Project Status: Advanced-stage exploration project. Pre-feasibility study completed in January 2005. Updated resource estimate completed June 2006. Exploration drill program ongoing.
2006 Updated Resource Estimate
In June 2006, Pacific Rim issued the results of an updated resource estimate for the El Dorado Project. The impetus for the updated resource estimate was primarily to quantify the gold and silver ounces at the South Minita deposit, the subject of an 18-month long definition drilling program at El Dorado that was completed in the spring of 2006. In July 2006 the El Dorado resource estimate was updated again to include inferred resources that were estimated for the Nance Dulce deposit. The Nance Dulce deposit and surrounding area remain open to the discovery of additional mineralization and the Company intends to resume drilling at Nance Dulce in the future. The inferred resource for the Nance Dulce deposit tabulated below should therefore be considered an interim resource estimate. Details of the methodology used in tabulating the 2006 updated El Dorado resource estimate are available at www.sedar.com.
El Dorado Project Resources (as of July 25, 2006)
A technical report supporting the 2006 El Dorado Project resource estimate was filed on SEDAR on July 31, 2006.
The resources above were estimated by interpreting drill intercepts in cross section, coding samples, capping assays, compositing to vein thicknesses, and estimating grades and thicknesses of each of the veins into a three dimensional grade thickness model. Each of the three veins at the Minita deposit and ten veins at the South Minita deposit were estimated separately. Readers are referred to the Forward-Looking Statements and Other Cautionary Notes and National Instrument 43-101 sections for further disclosure.
In January 2005 Pacific Rim released the results of a pre-feasibility study on the Minita deposit. The pre-feasibility study considers all aspects of a proposed operation at the Minita deposit, including an underground mine plan, metallurgy and processing, tailings impoundment, environmental matters, and capital and operating costs, and offers an economic evaluation of the Minita reserves. It does not include other current resources nor does it yet include the results of recent drilling by the Company at the South Minita and Nance Dulce gold zones discovered in mid-2004. The most compelling outcome of the study is that, at $163 per gold equivalent ounce, operating costs at the Minita deposit are within the lowest quartile on a world-wide basis.
Highlights from the Minita pre-feasibility study include (all monetary amounts in United States dollars; gold equivalent ounces based on $400 per gold ounce and $6.00 per silver ounce):
The Minita pre-feasibility study results are summarized in the following table (all monetary values in US dollars):
The Minita pre-feasibility study resulted in the conversion of a portion of the Minita resource into proven and probable reserves. This conversion was based on the stope outlines and dimensions for resources at or above a diluted 5 g/t equivalent gold cut-off grade, where dilution was calculated on a block by block basis to account for the variability associated with variations in the vein thickness. The Minita reserve estimate eliminated those resources contained within the unrecoverable portions of the crown and sill pillars and incorporates planned dilution, unplanned dilution, backfill dilution and production losses. The total proven and probable reserve for the Minita deposit is 1,604,883 tonnes at an average grade of 9.51 g/t gold and 60.82 g/t silver for a total of 490,758 ounces of gold and 3,138,016 ounces of silver, or 535,586 gold equivalent ounces.
Note to US Investors: These reserves have been calculated in accordance with National Instrument 43-101, which differs significantly from the requirements for reserve disclosure under SEC Industry Guide 7. Industry Guide 7 requires a "final" or "bankable" feasibility study to make reserve disclosure. Readers are refered to Cautionary Notes for further information.
The colonial Spanish discovered gold in the district in the early 1500's, and there was sporadic, largely unrecorded small-scale production until the late 1800's. The New York and El Salvador Mining Company (a subsidiary of Rosario Mining) operated an underground mine on the El Dorado property from 1948 to 1953, producing approximately 270,000 tonnes of ore yielding about 72,500 troy ounces (2,250 kilograms) of gold at an average grade of 9.7 g/t from workings centered on the Minita vein system (one of a large number of gold-bearing veins and vein systems identified on the El Dorado project). Gold was recovered in a simple cyanide mill and recoveries in excess of 90% were achieved.
From 1993 through 2002, the project was explored by Mirage Resources and its affiliates and later, Dayton Mining Corporation (a predecessor company of Pacific Rim Mining Corp.), who together invested over US $13 million in the project and drilled a total of 202, mainly shallow drill holes on selected veins throughout the project area. This work led to the definition of a small, high-grade resource on the Minita vein. Pacific Rim Mining acquired the El Dorado project in 2002 through its merger with Dayton Mining.
Geology and Mineralization
El Salvador can be divided into four morphological-geological units: Coastal Plains, Coastal Ranges, Great Interior Valley, and the Northern Mountain Ranges. El Dorado is situated in the Great Interior Valley, underlain by Eocene felsic to mafic volcanic rocks; in other words, dark to light coloured volcanic rocks in the order of 38 to 55 million years old.
Mineralization on the El Dorado Property consists of gold and silver bearing quartz veins that are contained within the volcanic rocks. The gold and silver bearing veins of the El Dorado district, of which at least 36 exceed 1 m in width, occur over an area exceeding 50 square kilometers. Vein mineralization is dominated by chalcedonic quartz and ranges in width between 1 m and 15 m in surface exposures. The vein systems are up to 3 km in length, dip steeply, and generally form ridges. The mineralization fits the model of the low sulphidation epithermal type of mineralization, also referred to as the adularia-sericite type.
In terms of its structure and mineral deposits, the El Dorado property area consists of primarily north-south and northwest-striking vein-filled faults. Northwest-trending regional scale faults appear to have an important relationship with the bonanza gold mineralizing event. Gold deposits at El Dorado are primarily contained within quartz-dominated veins that formed along fractures that opened under tension. The mineralized veins are for the most part within about 30 degrees of vertical and trend generally north-south, but there is considerable variation in vein width, strike and dip both.
Pacific Rim has been conducting an exploration drill program, designed to search for gold resources, on the El Dorado project since its acquisition in 2002. At least two core drill rigs have been utilized in this ongoing program during this time. In October 2003 a National Instrument 43-101 compliant updated resource estimate was completed for the El Dorado project, which outlined a total measured and indicated resource of 821,000 ounces of gold in the Minita, Coyotera and Nueva Esperanza vein systems (see table below). The October 2003 resource estimate was superceded by the 2005 Pre-feasibility Study which converted a portion of the Minita deposit resources into reserves, and the 2006 Updated El Dorado resource estimate, both of which are presented above.
October 2003 Resource Estimate for the El Dorado Gold Project, El Salvador
Note to US Investors: Mineral resource and reserve estimates have been calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities, which differ from standards of the U.S. Securities and Exchange Commission.
Pacific Rim has drilled roughly 250 drill holes at the El Dorado project since its acquisition in 2002 and complete results are presented in the Table of El Dorado drill results to date. These holes represent both exploration or scout holes designed to search for new areas of gold mineralization within the El Dorado project area and close-spaced holes drilled to delineate the Minita and South Minita deposits.
Pacific Rim's exploration drilling at El Dorado utilizes the Company's cumulative understanding of the stratigraphy, structure and controls on gold mineralization within the El Dorado epithermal system garnered throughout the ongoing drill program. During 2004, Pacific Rim's geologists made a breakthrough on their understanding of the relationship between the bonanza gold mineralizing event at El Dorado and the volcanic history of the district. As a result, the Company has made a number of new gold discoveries on El Dorado, including the Nance Dulce structural zone and the Hacienda and Gallardo targets. The Company is now applying this geological insight to its exploration efforts elsewhere in El Salvador, (which resulted in the identification of high grade gold at the Santa Rita and Zamora Projects.
Pacific Rim has submitted an Environmental Impact Statement ("EIS) for a 750 tonne per day operation to El Salvadoran regulatory agencies. The EIS forms the basis of Pacific Rim's application to convert a portion of the El Dorado exploration license area to an exploitation concession, which will allow the Company to commence development and operational activities. The first step in development, upon granting of the exploitation concession, will be the construction of an underground access / haulage ramp.
Pacific Rim is currently focused on resuming its exploration drilling program at the El Dorado project, following completion of the South Minita delineation drill program in the spring of 2006. Exploration targets slated for drill testing include the strike extent of the Minita structure, and the Nance Dulce, Hacienda and Gallardo targets.