Francisco drilling adds strength to El Sauzal

Drilling has dramatically enhanced the potential of Francisco Gold’s (FGX-V) El Sauzal gold project in Mexico’s Chihuahua state.

Highlights from the second phase of drilling include: 261.5 metres averaging 2.24 grams gold per tonne in hole 97-19; 123.9 metres of 5.5 grams in hole 97-22; 193.9 metres of 2.3 grams in hole 97-23; 260.1 metres of 5.74 grams in hole 97-25; 56.9 metres of 30.86 grams in hole 97-26; 95.5 metres of 3.27 grams in hole 97-27; and 135.2 metres of 2.13 grams in hole 97-33.

Based on 33 holes completed to date, Francisco believes El Sauzal to be a major discovery. Donald Poirier, a mining analyst with McDermid St. Lawrence, would seem to agree: “Francisco’s results were sensational and we are very enthusiastic toward this play for the upcoming months,” he said in a published report. “We see El Sauzal as a new discovery that has size, grade and untested potential.”

The deposit is believed to be amenable to open-pit mining, and Francisco has calculated a preliminary geological resource estimate of 28.9 million tonnes grading 3.8 grams gold, equivalent to 3.2 million contained ounces.

El Sauzal lies in steep, rugged terrain in the Batopilas mining district.

Gold mineralization is hosted in a series of silicified, hematized volcanic breccias at the upper margin of a diorite intrusive.

A second phase of diamond drilling, comprising 15 holes totalling 2,849 metres, further tested several zones of near-surface gold oxide mineralization. Results from the first phase of drilling, completed prior to Christmas 1996, demonstrated that the mineralization occurs in several interfingering horizons, and these are repeated laterally across three faulted blocks: the West, East and South zones.

In each block, a zone of high-grade mineralization is associated with a larger, lower-grade envelope. The high-grade zones are both structurally and lithologically controlled. Each of the zones strikes in a north-northeasterly direction and dips moderately to the west.

“We learned a great deal geologically with the first drilling program,” said Gerald Sneddon, a director of Francisco. Many of the holes in that program were drilled low and got below the system. “The second program was done up on top, where we had done all of the sampling, which is why we, all of a sudden, got all these major results.”

West zone

During the first phase of drilling, the West zone was tested by seven holes, drilled in an east-northeasterly direction over a strike length of 350 metres. The most southern hole, 96-9, intersected 15 metres grading 1.17 grams gold over a drilled depth of 82.5-97.5 metres and 3.7 metres of 0.72 gram at a depth 217.7-221.4 metres.

Stepping out to the north: hole 96-18 returned 9.3 metres of 4.79 grams from 3.7-13 metres and 9.3 metres of 1.67 grams from 136.3-145.6 metres; hole 96-11 yielded 19.1 metres of 0.67 gram from 32.6-51.7 metres and 10.9 metres of 1.17 grams from 235.8-246.7 metres; hole 96-8 intersected 180.8 metres grading 2.14 grams (including 14 metres of 18.78 grams) from 3.1-190.7 metres; hole 96-17 hit multiple intervals including 40 metres of 1.1 grams (excluding 9.4 metres of dyke material) from 43.4-92.8 metres, 16.2 metres of 2.9 grams (excluding 6.3 metres of dyke) from 135.7-158.2 metres and 19.2 metres of 1.18 grams from 188.7-207.9 metres; hole 96-12 intersected five intervals over a depth of 32.1-195.7 metres including 4 metres of 0.92 gram, 4 metres of 1.13 grams, 12.4 metres of 2.26 grams, 3.4 metres of 1.28 grams and 2 metres of 1.45 grams; the most northern hole, 96-13, pulled 16.2 metres of 0.88 grams (including 3 metres of 4.62 grams) from 4.6-20.8 metres.

During the second phase of drilling, five new holes tested the West zone at varying azimuths and dips. Infill hole 97-32 was drilled in a parallel direction to holes 8 and 18. From 3.7 to 138.3 metres, the hole averaged 1.54 grams over 130.5 metres (excluding 4.1 metres of dyke).

Holes 97-19 and 97-30 appear to be collared in the middle of the zone and drilled in a south-southeasterly direction, perpendicular to previous drilling. Hole 19 intersected 261.5 metres of 2.24 grams (excluding 16.3 metres of dyke and including a 132.6-metre interval grading 4.23 grams). Hole 30 encountered multiple intervals from a depth of 41.8-214.3 metres, including 46.7 metres of 1.15 grams, 29.9 metres of 1.55 grams (excluding 2.6 metres of dyke), 7.2 metres of 1.28 grams, and 13 metres of 0.72 gram.

Holes 97-25, 23 and 33 were drilled in a southeasterly direction. Hole 25 pulled a 260.1-metre interval of 5.74 grams (including 55.9 metres averaging 25.27 grams) from 17.4 to 277.5 metres.

Hole 23 intersected 193.9 metres of 2.3 grams (excluding 16.4 metres of dyke and including 30.4 metres averaging 10.06 grams) from 28.5 to 238.8 metres, and hole 33 cut 135.2 metres of 2.13 grams (including 34.6 metres averaging 6.3 grams) from 74.2 to 209.4 metres.

The East zone is contained in a down-faulted block and is much higher in grade than the West zone. It was further tested with seven new infill holes drilled in an east-southeasterly direction and collared at various elevations. The zone has been tested along a strike length exceeding 250 metres. Selected results include: 123.9 metres of 5.5 grams (excluding 3.9 metres of dyke and including 77.1 metres averaging 8.75 grams) from 3.1 to 130.9 metres in hole 22; 56.9 metres averaging 30.86 grams from 31.3 to 88.2 metres in hole 26; and 95.5 metres of 3.27 grams (including 29.5 metres averaging 9.93 grams) from 3.1 to 98.6 metres in hole 97-27.

South zone

Two new holes were drilled into the South zone, which is also contained in a down-faulted block. Both holes were drilled in an easterly direction. Hole 97-28 was collared at the top of a hill and intersected 54.6 metres of 2.47 grams gold (including 16.2 metres averaging 7.39 grams) from 4.4 to 59 metres.

Hole 31 was drilled at a lower elevation, apparantly below the system, and hit 7.1 metres of 0.99 gram from 20.4 to 27.5 metres, plus 11.2 metres of 1 gram from 105.8 to 118 metres.

Five holes, in total, have tested the South zone.

Drilling has been suspended so that Francisco can shop the project around to group of senior companies that have expressed interest.

Preliminary metallurgical tests have shown recoveries in excess of 75% from bottle-roll leach tests.

Sneddon believes the high-grade nature of El Sauzal lends itself best to a crushing, grinding and carbon-in-leach processing.

Within the Batopilas district, Francisco holds 200,000 acres. A regional program will follow up on a number of anomalous areas in an attempt to define another target or two, before drilling resumes at El Sauzal.

Other players with holdings in the immediate area include Queenstake Resources (QTR-T) and Alamos Minerals (AAS-V), with a respective 60% and 40% interest in the 1,850-ha Yecorato 51 claim block, which is enclosed in the Sauzal claim group, southwest of Francisco’s discovery. Alamos staked the claims in 1995 based on remote sensing.

Lucero Resource (LCR-V) has acquired an option to a 50% interest in the 6,700-ha Santa Maria property, which lies 6 km northwest of El Sauzal.

Farther afield, in Chihuahua and Sonora states, Visionary Mining (VIN-V) holds a total of 285,000 acres. The company acquired its position by staking, based on satellite imagery.

Morgain Minerals (MGM-V) has acquired 20,000 ha, also by staking, 20 km west of El Sauzal.