MEXICO AND CENTRAL AMERICA — Francisco Gold takes aim at Mexico’s mineral potential

Francisco Gold (FGX-V) has discovered a potentially significant gold deposit at its Sauzal property in the Batopilas mining district in Mexico’s Chihuahua state.

Highlights of a trenching program include 59 metres averaging 14 grams gold per tonne, 82 metres averaging 9.76 grams, 63 metres averaging 4.52 grams and 304 metres averaging 2.28 grams.

The mineralized zone lies on a hillside and is exposed over a vertical relief of 180 metres.

The mineralization is hosted by a series of silicified rhyolite breccias at the upper margin of a diorite intrusive. It is set in a collapsed caldera structure and intersected by two sets of sub-vertical faults trending northwest-southeast and north-south.

Francisco believes the silicified oxide zone could be as thick as 200 metres and possibly underlain by a deeper sulphide zone that could be up to 150 metres thick. The estimates are based on results from an induced-polarization survey.

Preliminary metallurgical tests show potential for heap-leaching, with recoveries of 75% from bottle-roll leach tests.

The Batopilas district is an historic silver producing camp, where more than 300 million oz. silver have been mined from underground veins and replacement-type deposits.

Francisco has spent the past few years establishing a solid base and network in the Latin American country. It holds a diversified portfolio of mineral properties and has formed joint ventures on several of its projects.

Sauzal was initially staked as part of the 22,000-acre Brigida concession, 13 km west of the town of Batopilas in the Rio Urique Canyon. Reconnaissance work by Francisco pointed to widespread porphyry copper, gold and silver mineralization, and several prospective targets were identified.

Oxidized zone

Zeroing in on old mine workings at El Sauzal, Francisco undertook a program of mapping, rock-chip channel-sampling and surface geophysical surveys, which outlined an oxidized zone of mineralization measuring 700 by 550 metres.

Approximately 2.6 km of trenching yielded 585 rock-chip samples averaging 2.21 grams gold. The samples were taken over 5-metre intervals.

A 5,000-metre drill program is set to begin testing Sauzal.

Francisco is also following up on several discoveries of silicified breccias within a 5-km radius of Sauzal. Preliminary channel sampling has returned gold values of up to 3 grams.

A series of iron-banded lenses was discovered at the margin of a granodiorite stock, 1 km north of Sauzal. Rock-chip sampling along a length of 610 metres returned values of 0.1-0.82% copper, while another zone, intermittently sampled over a strike length of 1,067 metres, averaged 0.2% copper. Several samples returned more than 2 grams gold.

Andrew Dumyn, a consultant for Francisco, says a district-wide LANDSAT (satellite photo) study has revealed an additional 25 targets.

Francisco has increased its land position in the Batopilas district to about 200,000 acres.

Just east of the Brigida concession lies Francisco’s Los Corralitos copper-gold porphyry project. The company has joint-ventured the property (including certain porphyry targets in the Satevo area) to Phelps Dodge (PD-N), which can earn a 70% interest by spending US$3 million over four years.

Farther to the north in the neighboring state of Sonora, a preliminary, 8-hole program of reverse-circulation drilling was conducted on the Dura project. Situated in the Mulatos gold district, the project is operated by Adola Gold, a subsidiary of Irish-based Ormonde Mining.

Adola can earn an initial half interest from Francisco by spending US$1.5 million and paying US$250,000 over three years. This can be increased to 70% by completing a feasibility study and arranging production financing.

Three zones of interest were drill-tested over a strike length of 300 metres.

Values of 0.2-2.6 grams gold were encountered over intervals of 2-4 metres.

Meanwhile, in the northern state of Coahuila, Francisco holds a 50.1% interest in the private company Goldeneye Exploration, which owns the Coahuila copper project.

The 750,000-acre project covers prospective, sediment-hosted, stratiform copper-silver mineralization. BHP Minerals can earn a 70% interest from Goldeneye by paying US$5.3 million and spending US$15 million on exploration over five years. BHP would also be required to develop and place into production a deposit in the order of 200 million tonnes.

Surface sampling has returned grades of 2% copper and 34 grams silver in an 8-to-15-metre-thick horizon of mineralization. Preliminary drilling intersected selected intervals of 6.9 metres (true width) grading 1.14% copper and 17.4 grams silver at Granizo, 3 metres (true width) grading 1.11% copper and 10.7 grams silver at San Antonio, and 5.8 metres grading 0.66% copper and 11.6 grams silver in a stepout hole 4.5 km from San Antonio.

Francisco has 13.7 million shares outstanding (15 million fully diluted) and $20 million in working capital, with no debt.