Analysts keen on Radius’s Tambor

Vancouver-based Radius Explorations (RDU-V) has revised the terms of a previously announced non-brokered private placement and will now conduct two placements to raise up to $2.4 million.

Insiders of the company will be offered just over 1 million units priced at $1.05 each, which will generate $1.1 million in proceeds. Each unit will consist of one share and a half-warrant. A further 1.2 million units will be sold at the same price to non-insiders for proceeds of $1.3 million. Each of these units will consist of one share and a whole warrant. For both financings, a full warrant will entitle the holder to buy one additional share at $1.25.

Radius has also revised its consulting agreement with Endeavour Financial, whereby Endeavour will now be granted warrants to buy up to 500,000 shares of the company, rather than 244,000 as previously announced. Endeavour will provide financial consulting services to Radius in consideration of a monthly fee for an initial term of six months.

Radius is cashing-up as it prepares to begin a first phase of drilling on its wholly owned Tambor gold project in central Guatemala. The junior remains a favourite of a number of analysts, including James Mustard of Haywood Securities. He recently visited Tambor and continues to recommend Radius as a speculative buy for risk-tolerant accounts. “We remain optimistic for the project, as we still consider it to be a superior grassroots exploration bet,” states Mustard. Shares in the company trade at 99-85 in a 52-week range of $1.30-48. There are 12 million shares outstanding, or 17.1 million fully diluted.

Since acquiring the right to a 100% interest in the 66-sq.-km Tambor property in late 1999, Radius has conducted regional geochemical sampling and follow-up trenching in an area that has seen intense structural deformation but little historical gold exploration.

Tambor is 50 km northeast of Guatemala City and is accessible by paved roads. About 5 km to the north is the Motagua fault, a major regional crustal shear zone. Radius has since applied for concessions covering more than 200 km of strike length adjacent to the Motagua fault, comprising an intrafault wedge of deformed Paleozoic metasediments and amphibolites. This package has been intruded by Cretaceous-aged plutons and subsequently covered, in places, by younger volcanic ash.

At the Tambor project, Radius has outlined at least five shear-hosted, low-angle oxide gold zones in an area measuring 6 by 2.5 km. The zones of mineralization are related to the Tambor thrust fault, which strikes east-west and dips gently to the north. Each of these zones contains finely disseminated, micron-sized gold (1/50 mm to 1/5 mm) in association with hematite and arsenic, or mercury.

Regional rock and stream sediment sampling has uncovered similar anomalous prospects in the Bella Vista area, west of Tambor. “A strike length of 24 km now defines the belt where gold occurs largely hosted by El Tambor Formation metasediments consisting of amphibolite-chlorite schist and phyllite,” notes Mustard.

“Mineralization is associated with limonite-sericite altered phyllite that, in many locations, is not at all obvious to the untrained eye. In certain localities, silica has a higher presence and carbonates are present.”

A 2,500-metre program of reverse-circulation drilling, consisting of 20-25 holes, will soon begin. The Sastre, Lupita-Chorro and Bridge prospects will be tested by six to eight holes apiece.

The Sastre zone has returned the highest grades from the property so far. Subcrops of mineralization have been traced by a series of hand trenches and pits for 600 metres of strike length along the northeastern face of a gentle ridge. Radius initially tested an area where several old adits had been found. Two hand trenches returned 14.2 metres of 5.54 grams gold per tonne and 11.25 metres of 4.09 grams. Work then shifted 300-500 metres to the north to Sastre Norte, where hand-trenching along a 230-metre strike length yielded the following results:

– 29.4 metres of 11.5 grams gold in trench 1;

– 24 metres of 2.09 grams in trench 4;

– 20 metres of 10.52 grams in trench 5;

– 54.5 metres of 6.41 grams in trench 7;

– 40.9 metres of 10.06 grams in trench 8;

– 14.2 metres of 4.83 grams in trench 9; and

– 12.4 metres of 4.74 grams trench 10.

Trench 10 was cut to test the footwall extension to the mineralization in trench 1. The two trenches, combined, returned 44.8 metres of 8.28 grams gold.

The interpretation was that the zone dips to the southwest at about 30; however, recent excavator trenching suggests that it is “crudely inclined” to the northeast.

This recent trench was dug to a depth of up to 10 metres, adjacent to hand trench 1. The re-interpretation lowers the tonnage potential of the high-grade Sastre Norte zone. Still, the overall geometry of the zone remains uncertain, owing to the gradational wallrock contacts and complex internal structure observed in the trench.

“We observed nothing substantive in the numerous trenches and road cuts to suggest that a south-dipping interpretation was wrong,” states Mustard. “However, we do accept that a north dip is likely the best explanation, given the pattern of mineralized zones.”

Robert Wasylyshyn, vice-president of Radius, says they were initially fooled by the foliation, which is the dominant fabric on the property, striking east-west and dipping to the south. Sastre is a subtly mineralized gold body that is an alteration front. “It doesn’t look to be a fault, though it must be some sort of fracture pattern,” says Wasylyshyn. The body is 5-15 metres thick and averages somewhere around 7-8 grams.

The mechanized trenching was designed primarily to check for any indication of surface enrichment. Although sampling results have yet to be disclosed, Wasylyshyn describes initial results are “absolutely stunning.”

He adds: “[The trenching] demonstrated the geometry model that we’re working to now, and it dispelled any fear of supergene enrichment. You see intense alteration, mineralization and grades down at the bottom [of the trench], and these are better than those up at the top.”

Radius will also drill-test the Lupita-Chorro zone, west of Sastre. Lupita is potentially a half-million-ounce target, which averages 1.5-2 grams gold and dips into the hill. Drilling will finish off on the Bridge zone at the western end of the mineralized trend. The Bridge zone has been expanded to cover a strike length of 600 metres. A layer of unconsolidated ash cover masks any further extensions of the zone. Initial chip sampling along the banks of a small river yielded 3.59 grams across 85 metres. Across the river, an old railway cut, some 10-15 metres above the riverbank exposure, returned 65 metres of 2.58 grams. A vertical trench, starting at river elevation and ending below the railway cut, assayed 2.43 grams over 10.7 metres.

The Bridge zone is the only zone at Tambor with related hot-springs activity. Mustard notes that the host rock appears to be a graphitic phyllite.

Radius is engaged in a program of reconnaissance sampling and mapping that has led to the discovery of anomalous zones 12-15 km west of Tambor, in the Bella Vista area. Crews have identified several zones, with surface samples returning gold values well in excess of 1 gram, and will soon begin a follow-up program of grid soil sampling.

States Mustard: “Given that there is now a 20-km-long belt of favourable rocks hosting several gold occurrences that will see substantial exploration in the coming months, we remain optimistic.”