Brancote advances Esquel gold project in Argentina

A 20,000-metre drilling program aimed at upgrading the inferred resource of the Football Field zone at the Esquel gold project in southern Argentina is now more than 60% complete.

London-based Brancote Holdings is the operator and 60% owner of the project, which covers 1,400 sq. km in Chubut province, close to the Chilean border in the foothills of the Patagonia region. A private group holds the remaining 40%.

A resource study, updated in February by Denver-based Pincock, Allen & Holt, estimates a total near-surface resource of 14.7 million tonnes averaging 8 grams gold and 13 grams silver per tonne, based on a cutoff grade of 2 grams per tonne. The resource is equivalent to 3.8 million oz. gold and 6.1 million oz. silver. About 63% of the total resource, or 2.4 million oz. gold, is categorized as measured and indicated; this portion constitutes 8.6 million tonnes grading 8.67 grams gold and 15.2 grams silver.

The resource is contained in six epithermal vein systems within the core area of the project, which lies just 10 km north of the town of Esquel. These vein systems are known as Galadriel, Galadriel Sur, Elena Norte, Elena Sur, Julia and Antonia.

The Football Field zone is a 550-metre area that sits between the southern extension of Galadriel Sur and the northern end of Julia. It was estimated to contain an inferred resource of 4.2 million tonnes grading 7.69 grams gold and 10 grams silver, equal to 1 million oz. gold and 1.3 million oz. silver.

Recent drilling in the Football Field area has confirmed the presence of at least three high-grade quartz veins, linking the Galadriel, Galadriel Sur and Julia veins into one continuous epithermal system extending over 2.4 km of distance.

A shallow-angle vein under the central part of the Football Field has been tested by infill drilling on a 40-metre-strike-by-25-metre-downdip pattern. To date, the vein has been drilled 320 metres along strike and up to 150 metres downdip. Drilling has intersected vein widths of up to 28 metres, with bonanza grades developing near the upper contact (0.87 metres of 449 grams gold). This vein remains open at depth and to the south, and appears to be contiguous with Julia.

Immediately south of the Galadriel Sur vein system, in the northern part of Football Field, Brancote has extended a steeply dipping vein a further 120 metres southwards, giving this system a known strike length of 340 metres. The vein is becoming wider at depth and to the south. The mineralized envelope can be quite significant depending on the cutoff grade used. Hole 241 intersected 26.2 metres grading 12.2 grams, based on a 2-gram cutoff, or 142.5 metres averaging 3.4 grams at a 0.5-gram cutoff.

The third vein identified is a high-angle vein believed to be a northern extension of the Elena vein into the southern part of the Football Field.

To the end of April, Brancote had completed 12,700 of the planned 20,000 metres of drilling. The remainder is scheduled for completion by the end of May. A new resource estimate will then be updated.

Field exploration in the Cordon Leleque area, 60 km north of the Esquel project, has uncovered a broad zone, anomalous in gold and base metals, extending over a 10-sq.-km area. Several outcropping veins have been identified, including one that is more than 15 metres wide and 300 metres long. A first pass of grab sampling yielded values of up to 2 grams gold.

Pincock, Allen & Holt was awarded the contract to complete a prefeasibility study of the Esquel project by October. The firm has been involved with the project since early 2000 in the preparation of resource estimates and supervision of metallurgical and environmental base-line studies.

Highlights from the latest batch of drill results are shown in the accompanying table.

Hole Interval Width Gold
(m) (m) (g/t)
236 103.9-115.9 12.0 12.4
237 117.0-129.6 12.6 8.5
240 159.0-192.8 33.8 8.7
241 209.7-235.9 26.2 12.2
242 125.6-139.6 14.0 12.2
243 152.0-172.0 20.0 12.8
244 163.5-177.3 13.8 15.9
246 128.7-158.6 29.9 20.2
249 139.1-154.2 15.1 13.4
254 120.0-139.0 19.0 9.4
281 141.4-156.6 15.2 8.7
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