Drill results add shine to Marlin

Encouraging results from a second round of diamond drilling by Francisco Gold (FGX-V) have contributed to the bulk-minable potential of a gold-silver prospect at the Marlin property in western Guatemala.

The Vancouver-based junior has been testing a 150-sq.-metre area covering the southern and western extensions of the Main zone. All 10 additional closely spaced holes, which totalled almost 1,000 metres, intersected significant near-surface mineralization.

Highlights include 106.5 metres averaging 3.07 grams gold and 74.5 grams silver per tonne, starting from surface in hole 21, with the first 40 metres grading 5.45 grams gold and 101.6 grams silver. Equally impressive was hole 23, which cut 61 metres averaging 6.03 grams gold and 93.5 grams silver from surface.

The Main zone is a low-sulphidation, epithermal gold-silver system hosted in an andesitic package cut by latite dykes. It sits atop a 1.5-km-long ridge trending east-west at elevations of 2,200-2,300 metres. The ground drops off steeply on both the northern and southern sides of the ridge, quickly providing vertical relief of 50-100 metres.

The Marlin property is 140 km northwest of Guatemala City and is accessible by a series of dirt roads from the town of Huetuetenango, some 30 km to the east. Marlin is part of a package of properties held by Montana Gold, a privately owned Canadian company acquired by Francisco for an initial 650,000 shares, and up to an additional 1.4 million shares should the junior succeed in defining 1.5 million proven and probable ounces gold-equivalent.

Montana Gold controls more than 6,000 sq. km of mineral concessions along a major structural trend in western Guatemala.

Montana’s geologists first discovered precious-metal mineralization on the Marlin property in late 1998 in a roadcut near the crest of the high ridge. Follow-up work identified mineralized showings in zones of stockwork, breccia and sub-parallel veins, which were exposed in limited windows through the overlying, post-mineral volcanic cover.

A series of crosscutting trenches confined to a 160-by-140-metre area of the Main zone yielded values averaging 11.06 grams gold and 100 grams silver per tonne. Trench results included 102 metres averaging 8.18 grams gold and 62 grams silver in C-10, which was dug by hand along strike of the system. A parallel hand trench, T-5, averaged 13.34 grams gold and 232 grams silver over 118 metres. These two trenches were crosscut by another hand-dug trench, TT-1, which returned 121 metres averaging 11.95 grams gold and 70 grams silver. Trench samples were taken at continuous 2-, 3- and 5-metre intervals.

In February 2000, Francisco undertook a due diligence technical review of the previous sampling results, which included mechanized backhoe trenching and check sampling. There were concerns that the earlier results may have been skewed by surface weathering or residual enrichment effects.

Comparative assay results from the TT-1 trench included 37 metres of 13.4 grams gold and 28.7 grams silver in TT1 North, and 30 metres of 15.8 grams gold and 92.4 grams silver in TT1 South.

The rocks exposed in the trenches consisted principally of weathered, oxidized breccia, with quartz pods, veins and stockwork contained in a softer, clay-altered breccia mix.

Francisco completed a first pass of drilling comprising 15 holes over the eastern portion of the Main zone and its extension under post-mineral volcanic ash cover, testing some 300 metres of strike length.

Initial drilling identified a near-surface, oxidized, mineralized horizon averaging a true thickness of 25-40 metres. The horizon dips gently to the south at 20-30. The 15 holes were oriented both to the southeast and northwest at 55-60 along an east-west axis.

Francisco collared the first two holes in the middle of the trenched area, close to where trenches TT-1 and C-10 crossed. Hole 1 was aimed to the northwest and hit 37.5 metres grading 2.9 grams gold and 33.3 grams silver starting from surface, followed by 40.5 metres of 0.4 gram gold and 6.3 grams silver.

Hole 2 was drilled to the southeast and cut 78 metres grading 2.4 grams gold and 37.4 grams silver from surface, before passing through 37.5 metres of 0.41 gram gold and 8.1 grams silver. This was followed by 24 metres averaging 2.31 grams gold and 34.8 grams silver.

Other impressive results included 24 metres of 12.92 grams gold and 257.4 grams silver in hole 3 and 21 metres of 7.1 grams gold and 95 grams silver in hole 4.

Core recovery in the first six holes, using HQ-sized rods (63.5-mm core diameter), was poor, at anywhere from 30% to 50% — a reflection of the highly fractured nature of the host rock. The company believes the first six holes significantly underestimated the gold grades.

A triple-tube HQ3 core barrel was subsequently implemented, and this improved core recovery to about 60-70% in the remaining holes. A twin hole, drilled to check hole 2, showed an 82% increase in the gold grade. Hole 2A returned 63 metres from surface grading 4.42 grams gold and 37.9 grams silver, versus 63 metres averaging 2.43 grams gold and 40.4 grams silver in the original hole.

Brent Cook, an analyst with Global Resource Investments, says the first round of drilling outlined a resource of about 350,000 oz., based on an average grade of 4 grams, in a near-surface, low-angle sheet of brecciated quartz. Cook, who has visited the property twice, believes there may be two different, though probably related, gold-mineralizing environments. The high-grade mineralization, hosted in quartz and quartz breccia, appears to be a slide block transported into a hydrothermally active volcanic basin.

The volcanic sediments, which underlie the near-surface mineralized zone, contain eruption breccias and carbon, and show signs of soft sediment deformation. Minor silicification and high-level clay alteration are associated with widespread gold grades in the range of 0.3-2 grams.

The second round of drilling tested the southern and western extensions of the Main zone. All the holes (except hole 23) were aimed to the southeast, and none represents the true thickness of the mineralized horizon. Holes 16 (91.5 metres of 1.67 grams gold and 47.7 grams silver), 17 (79 metres of 3.81 grams gold and 113.6 grams silver), 21 (106.5 metres of 3.07 grams gold and 74.5 grams silver), 22 (81 metres of 2 grams gold and 107.2 grams silver) and 23 (61 metres of 6.03 grams gold and 93.5 grams silver) indicate that the Main zone is slightly down-faulted and continuous for more than 150 metres across an east-west-striking normal fault.

Holes 15 (35 metres of 8.87 grams gold and 112.7 grams silver), 18 (90 metres of 1.07 grams gold and 24.1 grams silver) and 20 (106.5 metres of 3.07 grams gold and 74.5 grams silver) tested a geophysical anomaly extending west from the Main zone. This anomaly continues a further 300 metres to the west.

Cook had thought that the Main zone was cut off to the west, limiting the size of the deposit. However, the latest drill results suggest that the western end was downfaulted and the upper portion of the block eroded, remaining wide open to the west.

Based on results from the 25 drill holes, the mineralized horizon now exceeds 450 metres in length and 175 metres in width. The Main zone remains open to the west, south and east.

Francisco says the drilling has confirmed the existence of an east-west-striking feeder fault system that appears to control both the high-grade mineralization of the Main zone and the corridor of intense argillic alteration that extends for 2-3 km on each side of the Main zone.

Francisco is conducting an extensive program of mapping, trenching and surface sampling outside of the Main zone. Stream-sediment sampling is being carried out over a 30-sq.-km area around Marlin.

In addition to the Don Tello and Los Cochis prospects, two peripheral targets have been identified. La Hamaca and Ajel lie 2 km north and 3 km west, respectively, of the Main zone. Both targets host structural and alteration characteristics similar to those of the Main zone.

Drilling will resume at Marlin in about a month. Francisco will continue to step out on the Main zone and also test the Don Tello zone, which sits a further 200 metres south of the recent drill pattern. Don Tello is a structural corridor that extends 900 metres along strike and is 10-50 metres wide. The average grade of 111 chip samples collected across this zone is 3.5 grams gold and 183 grams silver. A broad high-resistivity geophysical anomaly coincides with this zone.

Francisco is well-financed, with $34 million in its treasury, and has 16.4 million shares outstanding.

A summary of results from the second round of drilling, beginning with the easternmost hole, is provided in the accompanying table.