HIGH GRADE GOLD PROSPECT IN THE SIERRA MADRE GOLD BELT OF CHIHUAHUA , MEXICO
INTRODUCTION
EXMIN acquired two concessions that cover the La Guitarra gold prospect, consisting of 52 hectares, in the Temoris region of western Chihuahua state, Mexico. These concessions are located about 20 kilometres west of EXMIN’s 100% owned Reyna de Oro Project, and 30 kilometres southeast of the Palmarejo district (Palmarejo Gold) and the San Miguel property (Paramount Gold), and are inside of Paramount’s Andrea concession.
This property is one of many in this region that were explored during the 1990’s but dropped due to lower gold prices. Past exploration work has shown the presence of gold over a large area in a well defined structural zone. Four companies are known to have explored the property in the 1990s: Compania Fresnillo, a subsidiary of Industrias Peñoles (Peñoles), Manhattan Minerals (Manhattan), Minera FMC (a subsidiary of FMC) and Minerales de Alta Primeria, a subsidiary of Francisco Gold Corporation (Francisco Gold).
Prior to optioning the concessions, EXMIN completed a preliminary evaluation of the prospect, consisting of a review of the geology and available data from previous exploration programs. Review of summary reports from Manhattan and Francisco Gold indicate that several areas were not tested in their exploration programs. Surprisingly, the main area of structurally controlled gold mineralization that yielded the surface anomalies and the most interesting of the drill intercepts was not completely explored, and this target area remains open at depth and along strike.
SUMMARY
EXMIN has agreed to make staged payments over the four year term of the option agreement for a total purchase price of US $300,000 for 100% of the rights to the concessions:
- Structural zone with quartz veins and breccia fill with high grade gold values
- Previous exploration by several companies has shown potential
- Drill holes with 31 m @ 1.92 g/t Au,and 26m 1.16 g/t Au
- Structures have been inadequately explored and are open along strike and at depth
GEOLOGY
Exploration work carried out on the properties in the past by several companies has outlined an area of gold mineralization measuring 150 metres by 180 metres. Coarse gold is associated with epithermal veins and stockworks of banded quartz that are hosted by variably silicified dacite along a north-northwest trending structural zone. Relatively high grade gold assays of more than 1 ounce per short ton (opt or 34 grams per metric ton) over widths of 1 to 3 metres have been reported in the past (see table below). Check sampling by EXMIN yielded assays of as much as 6 grams per tonne (g/t) gold over 3 metres.
In 1991, Peñoles completed several trenches across the mineralized zone and performed preliminary metallurgical test work.
Manhattan
subsequently completed an exploration program that included surface sampling and 862 meters of diamond drilling in 9 short holes.
Manhattan
delineated a mineralized area measuring 40 meters by 100 meters with an average 1.7 g/t gold based on surface samples. Manhattan noted that coarse crystalline free gold fell from an open, quartz-lined cavity during splitting of the core, and that similar cavities, that may have originally contained coarse gold, were visible on the outside of the core. Francisco Gold performed an IP (Induced Polarization) survey over the La Guitarra area in 1997 and delineated a large area of high resistivity that they apparently interpreted to represent a shallowly dipping silicified body corresponding to a potentially large tonnage of mineralized rock. Francisco Gold subsequently completed 1,486 meters of reverse circulation drilling in 12 shallow holes. The drilling did not encounter the hoped for silicified body, but did intersect some interesting gold mineralization; one hole that offset Manhattan’s intercept and cut 24 meters 1.06 g/t Au. No further attempt to explore the structural zone was made and the property was dropped.
During the preliminary exploration program, 17 rock-chip channel samples were taken to check the historical data. The rock sampling confirmed the presence of gold mineralization in the area of prospect pits and small artisanal mines measuring about 100 m by about 50 m. Gold is associated with quartz vein material that fills cavities in a zone of crackle breccia. The gold mineralization is also associated with weakly anomalous values of the indicator elements arsenic, antimony and mercury. The coarse nature of the gold at La Guitarra has caused sampling and assay problems in the past and will be addressed in EXMIN’s exploration program by utilizing drilling and assay techniques appropriate for coarse gold.
