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BUSINESS FOCUS - CANADA - CANADIAN COMPANY TOURNIGAN CONTINUES THE TRADITION OF PROSPECTING PRECIOUS METALS

On the gold trail in Kremnica

THE CANADIAN company Tournigan Gold Corporation began its exploratory drilling programme in the central Slovak town of Kremnica in August this year. Historically the region is renowned for mining gold, dating back to the middle ages, and in recent years it has attracted a new breed of prospectors in the hope of striking it rich.
Tournigan is at present conducting a geological survey in Kremnica after it bought the Slovak mining company Kremnica Gold from another Canadian company, Argosy Minerals, for 500,000 Canadian dollars (€325,000) in July 2003.


KREMNICA is once again attracting gold prospectors.
photo: Ján Svrček

THE CANADIAN company Tournigan Gold Corporation began its exploratory drilling programme in the central Slovak town of Kremnica in August this year. Historically the region is renowned for mining gold, dating back to the middle ages, and in recent years it has attracted a new breed of prospectors in the hope of striking it rich.

Tournigan is at present conducting a geological survey in Kremnica after it bought the Slovak mining company Kremnica Gold from another Canadian company, Argosy Minerals, for 500,000 Canadian dollars (€325,000) in July 2003. When the deal was clinched it carried estimates of potential gold yields of over one million ounces of gold (130 tonnes) for Tournigan.

So far preliminary results of their exploration have been positive and suggest that renewing gold production in Kremnica could be economically viable if the world price of gold is maintained.

Today it stands at approximately $400 (€369) per ounce. But if the value falls below $200 (€184.4) per ounce, then investment in exploring for gold in Kremnica will become economically unfeasible.

A preliminary assessment by Tournigan, in March 2004, carried out before the drilling programme began, showed the possible value of current gold deposits in Kremnica at $62 million (€57.05 million).

"So far such value does not mean anything. It doesn't take into account costs of production, the overall investments it would need, etc," said Boris Bartalský, the director of Kremnica Gold, the company that is administering the whole project in Slovakia.

The drilling programme is part of a feasibility study with the aim of providing more concrete estimates about gold deposits in the areas where gold was historically mined as well as surrounding areas within the region.

Consequently the programme operates around three areas near Kremnica: Šturec, Vratislav, and Wolf.

A statement on Tournigan's official website reads: "Any discovery of good grade deposits of gold in these three zones could further improve the economic situation. Tournigan will also initiate additional studies on environmental permits, metallurgy, and socio-economics.

"There are also a number of optimisations to investigate, which could reduce both capital and operating costs," it adds.

Previous operators around Wolf and Vratislav produced surveys to suggest that there were potential gold deposits of 105,300 ounces and 73,000 ounces, respectively.

Tournigan's own assessments, however come up with much higher figures: 388,100 to 857,600 ounces of gold.

Tournigan has since begun to drill four holes of 400 metres in Wolf, and four holes of 520 metres in Vratislav.

An additional five diamond drill holes, 100 metres deep, will take place in the partially surveyed area of Šturec, which could potentially yield between 375,000 and 600,000 ounces of gold.

According to Bartalský: "So far about 800 to 900 metres have been drilled, with the exploration process being successful. However, all the conclusions about actual gold resources are very cautious now. We will know much more after the feasibility study is concluded in about two or three years. It will show us realistic results."

He continued: "To be realistic we should keep in mind that out of approximately 130 tonnes of sourced gold it is possible to actually gain only about two or three tonnes of gold in Kremnica. That averages out at only about two grams for every one tonne of material mined.

"That is why it very much depends on the price of gold. If it is low, the costs on exploration would exceed the value of the excavated gold."

The last gold mines in the area closed in 1971 after more than 600 years of production, extracting a total of 1.5 million ounces of gold and 6.7 million ounces of silver. Evidence suggests that gold and silver mining in the area may date as far back as the 7th century BC.

Mineral deposits in the area made Kremnica the perfect site for the national mint, which has been producing coins there since 1328. It continues to produce coins and medals to the present day, including the Slovak currency and those of other countries, including India, Cuba, and Sudan.

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