Mansfield’s Lindero project ‘made to be mined’

SITE VISIT

Salta province, Argentina — Described by a Mansfield Minerals (MDR-V, MFMNF-O) geologist as “made to be mined,” the company could be onto something big with its Lindero porphyry gold project, a roughly 200-metre-high mineralized hill that stands out from a valley floor, in Salta province, Argentina.

Headed by brothers John and Gordon Leask, Mansfield has focused on the relatively remote and underexplored Puna region of northwestern Argentina since 1994. The duo moved to secure strategic land positions just as the country was restructuring its mining laws to attract foreign investment.

John Leask, a director, says the company’s early days in Argentina were frustrating, but Leask is now a strong advocate of working there — particularly in the “pro-mining” province of Salta.

Leask, along with the rest of the Mansfield team, recognized similarities between the region and the Great Basin region of the western U.S., where another company of theirs, White Knight Resources, assembled a large strategic land position in north-central Nevada’s Cortez trend. White Knight was recently taken over by Robert McEwen’s U.S. Gold (UXG-T, UXG-X).

Located high in the Puna district and about 250 km west of the provincial capital of Salta, gold mineralization at Lindero was first uncovered by Mansfield in late 2000 by a program of prospecting and sampling on a significant colour anomaly just northwest of its Arizaro property and southeast of its large Rio Grande project.

The company’s initial round of surface sampling delivered several sets of assays greater than 2 grams gold per tonne and copper values of up to 0.62%, piquing its interest and prompting a follow-up surface geochemical survey and trenching program.

By mid-2001, the trenching effort returned several long surface intervals of more than 1 gram gold in quartz-magnetite stockworks and minor breccia hosted within the circular dioritic intrusive body. The sampling encountered almost entirely oxide gold mineralization, indicating amenability to heap leaching.

As Mansfield continued to explore the project, it caught the attention of a major, and in mid-2002 the Lindero-Arizaro project was optioned to Rio Tinto (RTP-N, RIO-L). The senior could earn a 60% interest in the property by spending US$3.95 million and paying US$770,000 over five years, and get a bump up to 70% by completing a feasibility study.

Rio Tinto fast-tracked a 2-phase drill program, completing 10 holes for a total of about 3,300 metres. It also conducted preliminary bottle-roll metallurgical tests on samples that yielded good results.

Encouraged, the major began a “reverse economic study” at Lindero in 2003 that entailed further metallurgical testing, three-dimensional modelling and economic studies. The results, however, did not meet Rio’s threshold size cutoff (around 10 million contained ounces) and the company subsequently returned the project to Mansfield.

Resource estimate

Based on its own data and Rio Tinto’s, Mansfield calculated an independent resource estimate that showed a total inferred resource of 30 million tonnes grading 1.08 grams gold (just over 1 million contained ounces) in the MVZ, PVZ and Di P2 zones, using a 0.6-gram gold cutoff grade.

The resource, within the three zones, is contained in an area of just 600 metres long by 200 metres wide, located on the southeastern flank of the hill that is the Lindero intrusive.

Subsequent metallurgical work in mid-2004 tested three types of mineralization from the project: surface oxide material, drill core oxide and drilled hypogene-sulphide material. Both bottle-roll and column-leach testing showed that Lindero gold mineralization is amenable to cyanide extraction, with about 70% of the gold recovered in 100 days. Long-term leaching in the field would be higher, as the columns were still recovering gold slowly at 101 days during tests. The testing also showed NaCN (cyanide) consumption to be about 0.6 kg per tonne and caustic lime consumption at about 1.25 kg per tonne with optimal crushing size at between 12.5 and 19 mm.

By late 2005, Mansfield launched a third phase of drilling at Lindero, aimed at testing the extension of the deposit and upgrading the resource. Results expanded the “mineralized footprint” of Lindero towards the north and southeast and identified zones of higher-grade gold mineralization.

Based on the promising results, Mansfield closed $6 million in financings in early 2006 earmarked for a major drill campaign constituting part of a prefeasibility study at Lindero. It budgeted for a 60-hole, 15,000-metre program consisting of delineation and stepout drilling.

The results led the company’s geologists to conclude that the several mineralized zones that comprise Lindero may be contiguous with the central, unmineralized core of the intrusive pinching out at depth. Additionally, several new high-grade feeder zones have been discovered.

“Gold grades are controlled mainly by the type of veinlets we find (quartz-magnetite-sulphide and magnetite-biotite veinlets) and generally where we find potassic alteration, we find gold,” says Mansfield’s Argentinean vice-president of exploration, Jorge Kesting. “Gold is generally free, interstitial with quartz, or sometimes with the chalcopyrite.”

Less than 10% of the gold is inside the chalcopyrite grains.

Based on the drilling done to date and the expansion of the mineralized zones laterally and at depth, a revised resource estimate in the neighbourhood of about 2.5 million contained ounces gold would not be a surprise.

And in light of current gold prices, a lower cutoff grade of about 0.3-0.4 gram gold could be used in the revised resource tally.

“We’ve basically tripled the footprint of the deposit,” says John Leask. “We’re working in the geologic model and we’re hoping to have the next resource estimate by October.”

“Our ongoing program right now is to increase the resource at Lindero and the best way to do that is to find the feeders,” Kesting explains.

Despite being located in a relatively remote area of the province, Lindero is not far from significant infrastructure. The roughly 7-hour drive west from Salta follows a paved highway that continues into Chile and in sections, parallels high voltage power lines and a natural gas pipeline that supply the major copper mines of northern Chile.

If Mansfield is successful in delineating a gold resource at Lindero approaching 3 million oz., it will likely attract the attention of a number of mid-tier producers and possibly even a major looking at potential acquisitions.

The project is located about 12 km southeast of Mansfield’s Rio Grande copper-gold property, where Antares Minerals (ANM-V, ANMFF-O) is earning an up to 60% interest. That project will be covered in an upcoming issue of The Northern Miner.

Based on the company’s 42.8 million shares outstanding, Mansfield posts a $152-million market capitalization. The junior’s shares have recently traded at $3.55 apiece in a 52-week range of $2.00-$3.94.