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The best drill intercept returned 1.04 metres averaging 53.75 grams gold and 1,711.6 grams silver per tonne in hole 31. This intercept is part of a 12.5-metre interval that hosted numerous zones of high-grade gold and silver mineralization.
The new discovery is on a parallel vein trend at Huevos Verdes East, about 2 km northeast of the Huevos Verdes resource.
The Huevos Verdes East target is a 6-km-long vein trend that has a 3-km-long geophysical anomaly in the north. Intermittent quartz veining and high-grade gold and silver mineralization have been identified in areas not covered by overburden in the south. These characteristics are similar to those found at the Huevoes Verdes vein.
“The discovery zone remains totally open and is in the middle of the 3-km-long anomaly,” says Minera Andes President Allen Ambrose.
The San Jose property comprises the Huevos Verdes and Saavedra West gold and silver zones, as well as seven early-stage targets: El Pluma West, South, Huevos Verdes East, La Sorpresa, Eastern Windows, Roadside, West Portuguese, and La Rosalia.
These prospects are associated with four parallel, northwest-trending, resistivity and chargeability anomalies, which appear to represent vein systems.
The Huevos Verdes vein system hosts an indicated resource of 1.5 million tonnes averaging 211.8 grams silver and 2.6 grams gold per tonne. The inferred portion is pegged at 2.1 million tonnes of 251.8 grams silver and 2.8 grams gold. These calculations are based on a cutoff grade of 50 grams silver per tonne. The resource has been estimated on 2.2 km of the known 5 km of strike length for the Huevos Verdes vein.
At Saavedra West, the indicated resource stands at 382,000 tonnes grading 225 grams silver and 0.4 gram gold, based on the same cutoff grade. Also calculated was an inferred resource of 579,000 tonnes grading 259.7 grams silver and 1.4 grams gold.
Gold- and silver-equivalent ounces are based on gold and silver prices of US$300 and US$5 per oz., respectively, or a 1:60 gold-to-silver ratio, which does not take into account differences in metal recovery.
The Huevos Verdes East discovery holes were collared at the south-central portion of the 3-km-long geophysical anomaly. Drill hole 32 is 100 metres north of 31, and hole 21 is 50 metres southwest of hole 31. Highlights of the drill results are as follows:
n Hole 21 cut 1.95 metres averaging 12.6 grams gold and 579 grams silver starting at a down-hole depth of 86.75 metres. This was followed by a 1.25-metre interval that averaged 1.5 grams gold and 136 grams silver starting at 155.05 metres down-hole.
n Hole 31 cut numerous mineralized intervals starting at 188.1 metres down-hole. These include: 0.43 metre of 2.5 grams gold and 100 grams silver; 0.2 metre of 12.4 grams gold and 1,882 grams silver; 0.7 metre of 4.19 grams gold and 461 grams silver; 0.5 metre of 1.57 grams gold and 145 grams silver; and 1.04 metres of 53.75 grams gold and 1,711.6 grams silver.
n Hole 32 cut 1.05 metres averaging 2.36 grams gold and 231.2 grams silver starting at 91.8 metres down-hole. This was followed by a 2.75-metre interval of 1.77 grams gold and 301.90 grams silver starting at 123.30 metres down-hole.
Final assays are pending from hole 15, which was drilled at the Pluma South target and revealed intermittent mineralization over 2.7 metres with silver values ranging from 31 to 207 grams per tonne. Other holes drilled at Pluma South and West returned insignificant assay results.
Minera Andes says the highlighted results prove that the San Jose project has district-scale potential. The company’s joint-venture partner, Mauricio Hochschild, a private Peruvian company, completed the 15-hole, 2,572-metre reconnaissance drilling campaign in February. The program targeted several different vein trends on the property, between 1 and 6 km from the Huevos Verdes resource.
Pluma West
Late last year, the company drill-tested the Pluma West target, 5 km north of Huevos Verdes, on a separate parallel vein trend. Assays from this area were consistent with a typical low-sulphidation epithermal vein system in which base metals exist below the precious metals horizon or laterally away from the centre of the system. The precious metal horizon may have been eroded away in this northern zone.
Highlights include hole 4, which cut 6.95 grams gold and 209 grams silver over 0.9 metre, and hole 7, which cut 1.3 grams gold and 163 grams silver. Holes 1, 2, 3, 5, 6 and 8 -12 contained insignificant precious metal values except for one short interval that averaged 12.51 grams gold and 385 grams silver.
A large portion of the known 32 km of vein trends remain open for exploration, as half of the project area consists of post mineral cover, which masks the prospective ground.
Meanwhile, predevelopment at San Jose continues. Construction of a 27-km all-weather road is under way, and a topographic survey has been completed. This survey will provide controls for construction and development planning.
Permits secured
Permits have been secured for underground exploration. Mauricio Hochschild plans to go underground at Huevos Verdes during the first quarter. The company aims to sink two angled decline shafts, and excavate horizontal workings on four levels for underground sampling in order to upgrade the resource to a minable gold and silver reserve. Hothschild will also assess the depth and lateral potential of the deposit.
Preliminary metallurgical tests indicate recoveries of 94% gold and 92.1% silver, though further refinement may increase these figures. A total of 485 kg of ore samples have been taken from the drill cuttings of 17 reverse-circulation holes from the Huevos Verdes vein.
Mauricio Hochschild has an option to earn a 51% stake in the San Jose property. According to the terms of a joint-venture and operating agreement signed in 2001, Hochschild must spend US$3 million on exploration over three years, and well as at least US$100,000 on other targets in the land package, and pay Minera Andes US$400,000 per year.
Minera Andes controls 12 projects that cover 1,630 sq. km of mineral exploration land in Argentina.
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