Guerrero on the discovery trail at Biricu

VANCOUVER — It’s early days for explorer Guerrero Ventures (TSXV: GV; US-OTC: GVXNF) at its 410 sq. km Biricu property in the emerging Guerrero Gold Belt (GGB) of southwestern Mexico, but the company has strong technical pedigree underpinning its greenfield programs. Biricu is the brainchild of Guerrero savant David Jones, who is widely viewed as one of the premier geological authorities on the district.

Jones has been exploring the project since 2012, and completed a large amount of regional target generation before Guerrero’s involvement. Work to date over the property, which is four-hour drive south of Mexico City, includes 298 rock samples, 187 stream sediment samples and 390 soil samples. Versatile time domain electromagnetic surveys were conducted in September 2012, as well as a follow-up airborne gradiometer magnetic survey.

The Morelos and Mezcala are the two important, Cretaceous-type formations in the district. The Morelos formation is a package of alternating grey limestone and dolostone, while the overlying Mezcala is a fine-grained sandstone and siltstone unit. The favourable contact is typically the transition zone, which is a normal contact as opposed to an unconformity.

“Those are the target areas for the skarn-type deposits you see in Guerrero, which is what we’re looking for. The critical thing in the GGB is that you want to have the right intrusions at that favourable contact,” vice-president of exploration Siegfried Weidner explains during an interview. “Due to the synclinal structure of our property we do have the favourable contact exposed, but it’s on the edges. So basically our intrusions are popping up along the edges, and in the core of the syncline. That’s where our Punto Rojo and Hornfels Hill targets are situated.”

Weidner adds that he had Jones give him a tour of the Guerrero district when he started with the company in August 2014. The idea is to find geological conditions similar to Goldcorp’s (TSX: G; NYSE: GG) Los Filos mine and Torex Gold Resources’ (TSX: TXG; US-OTC: TORXF) Media Luna discovery — both located a few kilometres to the northwest of Guerrero’s ground in the GGB.

Previous fieldwork had focused on areas of prospective skarn, jasperoid alteration, and coincident gold anomalies. Detailed mapping identified intrusions and alteration in favourable Mezcala and Morelos formations and along the transition zone between them, which resulted in the prioritizing of the Punto Rojo and Hornfels Hills targets.

Guerrero kick-started a 5,000-metre scout drill program in early October, which was composed of 2,700 metres at Punto Rojo and 1,900 metres at Hornfels Hill. The company released results from the program in late January, which were highlighted by 27 metres grading 1.07 grams gold per tonne from 284 metres depth in hole 11 at Punto Rojo.

Drilling at the target intersected hornfels and altered Mezcala formation sediments, with anomalous intervals up to 23 metres grading 0.36 gram gold at 184 metres down hole.

Based on the geological results, Guerrero figures Punto Rojo is an intrusive centre, though more drilling could zero in on and follow intrusive-related precious metal mineralization akin to other GGB-style deposits.

“The short and sweet of it is that we now basically have strongly altered pyroxene and skarn development over a large area in both the Mezcala and in the contact zones to the Morelos. Those are all the classic signatures and correct intrusions that we want,” Weidner says. “We have an entire hole that intersected strongly hornfels-pyroxene cooked-up Mezcala. It’s really classic stuff that’s identical to what you see at Los Filos and similar deposits. You see that hornfelsing with dark-iron enrichment, and it was getting stronger at depth as we approached the favourable contact.”

Meanwhile, the company remains stumped by Hornfels Hills’ geological controls. Drilling failed to intercept a cause for thermal metamorphic alteration seen at the surface. But the target intrigues Guerrero because it holds granodiorite-diorite intrusions with jasperoid-type alteration, and the large hornfels alteration zone correlates to a geophysical anomaly.

And Weidner is itching to get to work on his 2015 drill program. Efforts will again focus on Punto Rojo and Hornfels Hills, though a third area — named East Ridge — also warrants attention. The target covers a 10 sq. km quadrant hosting jasperoid bodies that follow the Morelos-Mezcala contact, and a strong dipole magnetic anomaly trend suggesting a skarn zone at a depth.

“We’re willing to go to depth to find that favourable contact because I believe once you have that nailed down you can pontificate where you need to go after that and where the blue sky might be located. I can’t stress enough the importance of the intrusions, you want to be in the hybrid granodiorite-diorite phase and hopefully in similar source rocks to what you have at Los Filos,” Weidner adds. “I’m not worried about depth, because if you look at my history, I’ve always been associated with large deposits where you have to hit for the fences.”

The other positive for Guerrero is that its exploration spending this year at Biricu should cap off its earn-in requirements from property owner Alamos Gold (TSX: AGI; NYSE: AGI), which picked up Biricu though its purchase of Esperanza Resources in August 2013. 

Guerrero Ventures took on the option agreement at Biricu — first struck in December 2011 — when it acquired Citation Resources in July 2014. The option requires the holder to spend $4 million on exploration by the end of 2015 to earn a 100% interest. Guerrero Ventures has only $1 million left to spend before the property is fully under its control.

“David Jones is pretty much the top expert in the GGB, and he’s a firm believer in drilling. On this property that’s exactly what we need to do. We don’t have favourable contacts, like you see at Los Filos and Media Luna, for example,” Weidner says. “We have the right rocks, alterations and skarn development, and we have gold mineralization in massive sulphide veins as well as disseminated mineralization. So we’re really excited for our next phase.”

Guerrero reported working capital of US$2.7 million at the end of the third quarter, and has 52 million shares outstanding for a $3.9-million press-time market capitalization. The company traded within a 52-week window of 4¢ to 34¢, and last closed at 7.5¢ per share.