Vancouver — The consolidation of a key property package has paved the way for Hunter-Dickinson-led
Situated 235 km northwest of a major smelter at Torreon, the property has a 450-year history of oxide gold mining. In 1532, the Spanish launched production and continued until the onset of the Mexican Revolution in 1813. Small-scale miners then took over and, by 1927, US-led companies had established a 150-ton-per-day mill capable of treating the oxide material. Activity stopped in 1935 when sulphide material was encountered at a depth of about 150 metres below the surface. It is estimated that 1-to-1.5 million oz. gold were recovered during this period.
“Inde is a classic Mexican property where you can walk in and put your hands on the sulphides,” says David Jennings, director of project acquisitions for the Hunter-Dickinson (HD) group of companies. “We know it’s there; it’s not a mystery.”
Exploration of the sulphide material at depth had been hampered by the fact that various locals hold mining titles in the area. Since the end of the Second World War, several major mining houses have tried to gain the right to explore the property.
“Both Teck and Kennecott attempted to consolidate and acquire this property in the early 1990s, but they could not reach a deal,” says Amarc’s exploration manager, Robert Cluff.
In the mid-1990s, junior
Finally last year, HD consolidated the 2.75 sq. km of ground by purchasing two claims, staking a third and optioning a fourth. In November, HD vended the property into Amarc. Under the deal, the junior explorer can acquire all of the property by reimbursing HD’s cost of US$475,000 and paying the vendor US$3.75 million by March 13, 2005. The vendor retains a 4% net smelter return royalty, which is capped at US$2 million.
“Our target is a multi-million-ounce deposit in the non-refractory, remaining, sulphidic ore that reportedly averages five metres in width at a grade of ten to fifteen grams gold per tonne,” says Jennings.
The project lies on the eastern flank of the Sierra Madre Occidental belt, which hosts several epithermal gold deposits, including the Tayoltita silver-gold mine in the western part of the state. The general area is moderately rugged with sharp ridges and well-incised ravines. Elevations range from 1,700 to 2,300 metres above sea level. Rock outcrops are mainly confined to the ridges and steeper slopes.
The oxide gold mineralization appears to mark the near-surface expression of a structurally controlled gold-bearing massive sulphide body occurring at the contact between a monzonite intrusive rock and limestone, as well as in the limestone itself. Despite the strong structural controls, a low base metal component and only limited recrystalization of the limestone wall rock, Amarc says the geological setting suggests a “carbonate replacement style” of mineralization.
“Most carbonate replacement deposits are characterized by chimneys and mantos that are dominated by lead-silver-zinc mineralization,” says Jennings, “but there are some important exceptions, such as the Cerro San Pedro mine [in San Luis Potosi state], which produced three million tonnes grading thirty grams gold [per tonne] from one sulphide body.”
Historical workings
Based on the geology and historical workings, the main mineralized zone appears to be continuous for 3.3 km along strike to vertical depths in excess of 150 metres. At least three other zones of lesser strike extent occur in the adjacent limestone unit. Most of the oxide mineralization has been mined along a 1.3-km strike length of the favourable contact zone known as the Cieneguillas area. Situated in the northern portion of the property, Cieneguillas covers three main workings: Libertad, Terrible and Guadalupe. According to historical reports, the average grade for these mines came in at 19-20 grams gold and 120-133 grams silver over an average width of 5 metres.
“All the mineralization we have seen in the area exceeds five metres,” states Cluff, “and in some cases, it is easily fifteen metres.”
The Cieneguillas mineralization is cut off on surface to the southeast by a 120-metre-wide, late-stage, quartz feldspar porphyry unit called the East dyke.
“The underground miners drifted a hundred and seventy metres across the dyke and found the mineralization on the other side, so we know it continues,” says Cluff.
About 700 metres southeast of the dyke lies a hilly knob that marks the surface extension of the mineralized zone. This area, known as Matracal, covers a strike length of 350 metres with historical mining records indicating an average grade of 9.6 grams gold and 13 grams sliver over 4.3 metres.
Says Jennings: “Limited work has been done on the southeastern part of the property, but, based on the surface workings, we know mineralization continues through the property for more than three kilometres,”
Non-refractory ore
Gold-bearing sulphide bodies often are enriched above the water table in the oxide zone. However, earlier work suggests this is not the case at Inde.
“According to reports, the grade carries from the oxide down on to the sulphides,” says Cluff, “and the values continue at the same grade. Teck took a fifteen-hundred-pound sample out of the massive sulphide from the lower levels and got twelve and a half grams gold.”
Amarc collected a series of composite samples to confirm the grades and test for the presence of refractory mineralization.
Four samples from the surface dumps averaged 13.8 grams gold showing a recovery of 88% using standard bottle-roll cyanidation at a grind size of minus 200 mesh.
The two underground samples collected from the underground workings at Guadalupe returned 2.55 grams gold with a recovery of 78%, and two samples collected underground at Terrible averaged 9.68 grams gold with a recovery of 84%.
“There is some grade variability,” says Jennings, “but overall the average grades easily work for a sulphidic bulk tonnage mine — even at today’s metal prices.”
Armed with a recently completed $1 million financing, the company plans to carry out underground mapping and sampling on the lower levels in the Cieneguillas area in preparation for a drill program, to begin in March.
“We’re looking at the downward sulphidic continuation of the oxide ore,” continues Jennings. “The earlier work stopped at the sulphide-oxide boundary simply because of the lack of modern technology at the time.”
Amarc has 9.8 million shares outstanding, or 11 million shares fully diluted.
See AMARC Page B8
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