LATIN AMERICA — Morgain, Columbia forge ahead in Mexico — Further drilling to include reverse-circulation, core holes

Partners Morgain Minerals (MGM-V) and Columbia Metals (COML-C) are continuing to explore for polymetallic minerals at their San Francisco property in Mexico’s Sonora state.

San Francisco produced gold from 1900 until 1912, when the Mexican Revolution forced its closure. Little exploration has occurred since, except for a few metallurgical tests in 1967 and a resource study by Mexican miner Peoles in 1980.

In 1997, Morgain acquired the property and subsequently signed on Columbia in June of the following year. Attached to that deal were several adjoining claims staked by the latter company. The combined properties are held through a single subsidary on a 75-25 basis between the two.

Since then, the partners have extensively mapped and sampled surface exposures and underground workings, and driven a ramp to connect an old shaft and drift. Initial results proved encouraging, and drilling began in late 1998, following receipt of a government permit.

To date, 22 reverse-ciculation (RC) holes have been drilled. All were widely spaced to cover 600 of the 730 metres of known strike length. Results from the latest six holes include the following:

• 10.7 metres (true width, starting at 140.2 metres down-hole) grading 8.03 grams gold, 8.5 grams silver, 0.76% lead and 0.22% zinc, plus 9.1 metres (true width, starting at 152.4 metres) grading 0.72 gram gold, 31.6 grams silver, 0.94% lead and 2.05% zinc in hole 23;
• 5.9 metres (true width, starting at 41.1 metres) grading 2.75 grams gold, 6.9 grams silver, 0.24% lead and 0.81% zinc, plus 6.9 metres (true width, starting at 74.7 metres) grading 0.15 gram gold, 215.3 grams silver, 0.8% lead and 2.82% zinc in hole 15;
• 9.1 metres (true width, starting at 88.4 metres) grading 0.4 gram gold, 212.7 grams silver, 0.58% lead and 0.98% zinc in hole 22; and
• 73.2 metres (true width, starting at 150.8 metres) grading 0.4 gram gold, 6 grams silver, 0.56% lead and 2.02% zinc, including 12.8 metres (true width, starting at 271.3 metres) grading 0.7 gram gold, 16.7 grams silver, 1.18% lead and 3.75% zinc, of which the final 5.2 metres graded 1.1 grams gold, 25.2 grams silver, 1.18% lead and 6.48% zinc in hole 21.

Hole 21 was collared nearby hole 11, but extended 100 metres vertically deeper. That earlier hole hit 5.3 metres (true width, starting at 4.6 metres) grading 0.53 gram gold, 52 grams silver, 0.13% lead and 0.27% zinc, plus 7.7 metres (true width, starting at 160 metres) grading 6.81 grams gold, 5 grams silver, 0.3% lead and 1.02% zinc.

Exploration shows mineralization to be associated with two prominent, steeply dipping breccia veins. Dubbed “Hangingwall” and “Footwall,” the zones are 10-15 metres apart, with the former carrying higher tenors of gold and silver, indicating it as the likely source of historical production.

Oxide resources, as calculated by Pe-oles, are pegged at 1.12 million tonnes grading 0.3 gram gold, 216 grams silver, 3.95% lead, 8.17% zinc and 0.19% molybdenum. These occur between the drift, which was driven 730 metres horizontally and situated 245 metres below the peak of the ridge that defines the mineralized body, and the bottom of the shaft, at 305 metres below surface. Recent results, however, have extended mineralization a further 105 metres vertically and have shown a possible extension along strike for 270 metres, to 1 km.

Drilling will resume shortly and will include both RC and core holes. The program will encompass stepouts and deeper drilling, especially below the water table, where supergene enrichment is thought to have occurred (mixed oxide-sulphide mineralization occurs at the 305-metre level, near the shaft).

Meanwhile, Mexico’s largest mining company, Grupo Mexico, has shown an interest in the project. The company, which also smelts and refines base metals, is carrying out metallurgical tests at its own laboratories, with Toronto-based EHA Engineering overseeing the work for Morgain and Columbia.

In related news, the companies’ subsidiary has nabbed a 682-ha placer-gold property and staked 2,450 ha of nearby claims that include old workings and gold-bearing gravels. To earn a 100% interest in the former property, the companies must pay the vendor US$500,000 over five years.

Previous operators pegged the optioned property’s resource at 32.2 million cubic metres grading 0.49 gram gold per cubic metre. This was based on 65 drill holes totaling 701 metres.

Bulk sampling has begun, and it is hoped that a production decision can be made later in the year. Toronto-based consulting firm James E. Tilsley & Associates is overseeing the program.