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The Volcan sulphur deposits were probably first recognized by Europeans
in the 17th century. The native sulphur deposits were reportedly
exploited in the 19th century and used to manufacture sulphuric acid. In
1988 a reserve estimate was published by the Chilean government
organisation Centro de Investigaciones Metalurgicas y Mineras (CIMM) of
Santiago in the Boletin Minero based on a CORFO report dated 1987. The
reserve figure published for Volcan was 4.7 Mt at a grade of 40% sulphur
For quite some time, the gold potential of the Volcan area was
considered to unfavourable due to the inferred high level and the young
age of the mineralised system. However, in 1990, the property was
optioned to Minera Homestake (Chile) Limitada who conducted a program of
reconnaissance geology directed toward gold targets. Over period of
three years, Homestake conducted 2,980 meters of reverse circulation
drilling in addition to preliminary geological and geophysical surveys.
Three target areas were identified including Main, Angelina Sur and
Angelina Norte, however, in 1993, Homestake concluded that the project
was not consistent with their exploration strategy and dropped the
option.
In 1994, Compañia Minera Cameco (Chile) Ltda (Cameco), entered into
an option agreement with the vendors and over the following 3 years
conducted 3,984 metres of reverse circulation drilling and 3,293 metres
of diamond drilling. The majority of the drilling was focused on the
Cerro Dorado East zone where drilling and metallurgical testing were
encouraging. Despite the success of the drilling program, Cameco
management elected not to exercise the purchase option agreement.
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