Bonanza Gold-Silver Project
90% EXMIN with JV Option to Industrias Peñoles (10%)
Introduction
The Tati de Oro Concession, owned 90% by EXMIN and 10% by Peñoles, covers most of a 20 kilometer long mineralized structural zone in the Maguarichic district. The Maguarichic district boasts a history of bonanza grade production as recently as the 1980s, but was never before exposed to modern exploration techniques.
Within this zone, EXMIN identified anomalous geochemistry and delineated drill targets. The Company believes a large tonnage bulk mineable gold deposit or a lower tonnage bonanza deposit with at least one million ounce gold potential may occur within this strongly altered structure.
In February 2006, EXMIN signed an earn-in agreement on the Maguarichic exploration project with Industrias Peñoles, the world’s largest silver producer. Under these terms, Peñoles has the option to earn up to a 75% interest in the project over a five-year period by investing $4.1 million and completing a 43-101 compliant pre-feasibility study. Phase I of the JV’s exploration drilling program was completed in late 2006, comprising more than 5,000 meters of drilling. EXMIN subsequently announced that Peñoles elected to continue with second year of the joint venture by paying EXMIN US$ 100,000 and has earned a 10% interest in the project.
Peñoles commenced a new 3,000 metre core drilling program in September 2007, with initial results anticipated by year-end.
History
The Maguarchic area was discovered during the Spanish Colonial period with sporadic production into the 1800’s. Modern production began in the 1930’s, when some of Mexico’s richest veins were discovered. Between 1936 and 1943, 4.7 metric tons of gold and 165 metric tons of silver were recovered from 214,000 metric tons of ore (a grade of 22 g/tonne Au and 770 g/tonne Ag). Between 1978 and 1980, a further 54,000 tonnes grading 11 g/tonne Au and 1,344 g/tonne Ag was produced. Although all of the recorded production has come from the Patria vein system, which lies in the center of the 20-kilometer long structural zone, many small and medium-sized mines and prospects occur to the northeast of the Patria mine, where erosion has provided deeper structural levels of exposure.
In 1997, a Canadian junior company optioned the property and identified a gold soil anomaly with values up to 1.1 g/t in the high-level alteration assemblage 4.8 kilometers southwest of the Patria mine. The gold anomaly measured 300 to 500 meters in width and 600 meters along strike, was open at both ends, and had coincident Ag, As, Sb, and Cu anomalies.
Summary
- A 3000 meter core drill program commenced in September 2007
- The joint venture completed a 5,000 meter drill program in late 2006, resulting in Penoles renewing the joint venture for a second year of the five-year agreement.
- Past bonanza grade production from more than 30 small mines and prospects with little or no modern exploration prior to EXMIN.
- Entire mineralized system preserved in southwest portion of district – not eroded
- Small-scale mining of high grade precious metal ore in prospective area
- Bonanza ore shoots under widespread clay-alunite alteration
- Identical alteration extends for kilometers onto EXMIN ground
- Large Area with structures and anomalous Au, Ag, As, Sb, Hg, and Pb in rock samples southwest of Patria mine. EXMIN has identified drill targets based on rock geochemistry with anomalous Au, Ag, As, Sb, Hg, an Pb, geologic mapping, and an IP geophysical survey
Geology
Most of the exploration potential in the district occurs in areas surrounding the Patria mine that have not been previously subjected to large-scale mining or exploration. Past production within the Maguarichic district mined low sulfidation epithermal quartz veins with bonanza grades of gold and silver. Based on exposures at the Patria mine, the largest former producer in the district and currently held by a third party, the ore shoots occur below strongly altered rock, consisting largely of clay minerals with local quartz and alunite. Alteration similar to that above the Patria mine extends for more than 10 kilometers onto ground controlled by the joint venture.
High sulfidation type mineralization, similar to that at currently producing gold mines at El Sauzal (Goldcorp) and Mulatos (Alamos Gold), also exists in the region surrounding the Maguarichic project. There are indications that this type of mineralization may exist on the property in addition to the bonanza style low sulfidation epithermal veins. High sulfidation deposits commonly provide large tonnage bulk mineable targets, and low sulfidation deposits are generally mined by lower tonnage underground operations.
This region is characterized by a large color anomaly caused by oxidation of high level advanced argillic alteration, containing alunite and abundant clay minerals. Alunite and clay rich altered rock are common in the upper parts of bonanza epithermal vein systems, but are generally low grade or barren. This type of alteration and associated color anomaly overlies the productive ore shoots at the Patria vein system, which was discovered because of a deep narrow valley cut through the altered rocks to expose ore at the surface. The Maguarichic alteration zone and color anomaly extends for 10 kilometers southwest from the Patria mine. This area has received little modern exploration because it was previously remote and was held by private local interests for many years.
Maguarchic Exploration Program
The drill sites for this program were in easily accessible areas along existing roads and allowed a preliminary test of the strongly altered rock to aid future exploration. No permits for construction of new roads to the areas with the best potential for a discovery were on hand.
A drill program was completed in late 2006, with a total of 5,006 meters was drilled in 18 reverse circulation holes. In general, the holes cut hydrothermally altered andesite and rhyolitic dikes. Alteration types intersected include silicification, quartz-alunite alteration and argillic alteration with zones of vuggy residual quartz. Local zones of quartz veinlets were also reported. Anomalous values of gold and the indicator elements arsenic and antimony, with locally anomalous zinc and lead, were encountered. Four holes intersected interesting gold values: MAG-06-03 cut 1.5 metres with 0.36 grams per tonne (g/t) gold, MAG-06-09 cut 19.5 metres with 0.13 g/t gold, MAG-06-12 cut 3.0 meters of 0.46 g/t gold, and MAG-06-15 cut 18 metres of 0.03 g/t Au.
Surface mapping and sampling has continued in the first quarter of 2007. The data generated will be combined with that obtained from the drilling to define areas for further exploration. A second stage of drilling, which commenced in September 2007, includes permitting of drill sites in locations that will allow testing of potential near surface high sulfidation targets as well as the bonanza type vein targets.
