Operations At The La Colorada Mine In Sonora Mexico

Mining activities in the small historic mining camp of La Colorada in the state of Sonora, Mexico can be traced back to the mid eighteenth century when gold was discovered and exploited by Jesuit missionaries. Following one hundred and twenty six years of activity, the mines were shut down due to the Mexican revolution. Very little activity took place until 1989 when a company, Minera Las Cuevas, spent US $350,000.00 in mapping and sampling and diamond and reverse circulation drilling over a period of three years. During 1991 HRC Development Corporation entered into a joint venture agreement with Minerales de Sotula, S.A. de C.V. that allowed an earn in of 70% interest. Exploraciones Eldorado, S.A. de C.V. and it's parent company, Eldorado Corporation Ltd. were subsequently incorporated by HRC to hold the La Colorada project. Property evaluation ensued and a thirty thousand tonne Run of Mine test heap was leached from August of 1992 until May of 1993. Full scale commercial production commenced in late November, 1993 and the first gold/silver doré bar was poured early in January of 1994. Pre-production costs were a total of approximately four million dollars U.S. During the fall of 1994 a buyout of the venture partners' interest gave Eldorado one hundred percent ownership of the property. The first two years of mining have utilized a local contract mining fleet and have placed nearly two million tonnes of ore on a run of mine heap. Low cost ripping and dozing mining methods have been employed in conjunction with drip irrigation leaching. An initial pilot plant carbon adsorption circuit was supplemented with a Merrill Crowe recovery circuit in June of 1994 and was completely replaced with the construction of a second Merrill Crowe circuit in July of 1995. Approximately fifty thousand troy ounces of gold and over one hundred thirty thousand ounces of silver will have been poured by year end 1995. Ongoing, on site exploration continues to increase mineable reserves in the known deposits. A feasibility study is ongoing concurrent with the operations and will provide the basis for future elevated production levels. Exploraciones Eldorado continues to explore outward from the current operations and several anomalous outlying zones may play part to the long term economic growth of the company in Mexico.