Cacamuya back on First Point’s radar screen (April 15, 2002)

Vancouver — Early signs of a potential gold rally have prompted First Point Minerals (FPX-V) to shift its focus from platinum-palladium exploration in Ontario back to the Cacamuya epithermal project in Honduras.

The junior recently completed a 1.2-km program of mechanical trenching over the gold-silver property. The most impressive results came from the D5 target, where a 19.4-metre section averaged 8.1 grams gold and 23 grams silver per tonne.

“It is a big system, with both high-grade veins and disseminated bulk-tonnage gold targets,” says First Point President Peter Bradshaw. “There are only 23 drill holes on the property, so the exploration challenge is to test the best prospects first.”

Situated 200 metres north of the previously drilled Cerro Chachagua structure, the D5 zone comprises strongly altered volcanics with localized quartz veining over a strike length of 400 metres. At the southern end of the target, trenches returned 0.73 gram gold over 22 metres and 0.36 gram gold over 69.4 metres. A 1996 drill hole on the southeastern margin of the prospect returned 1.2 grams gold over 7.6 metres.

Eighty 80 metres to the northeast at the D5 prospect, a 64-metre long trench hit a quartz vein that returned 15.7 grams gold over half a metre, while at the East zone, some 200 metres east of the D4 target, 166 metres of trenching failed to exposed any significant mineralization.

In total, 644 metres of mechanical and 88 metres of hand trenching were completed on the Filo Lapa bulk-tonnage target. Based on a cutoff grade of 0.5 gram gold per tonne, the northeast-trending zone is estimated to have an average grade of 0.9 gram gold over a length of 300 metres, with widths ranging from 20 to 80 metres.

“Filo Lapa is higher topographically and stratigraphically than the bonanza targets,” says Ronald Britten, First Point’s vice-president of exploration. “The mineralization occurs on the western side of a flow dome complex, and on the eastern side is a sinter.”

Three samples collected northeast of the northern end of the Filo Lapa target returned up to 3.4 grams gold.

Moving 1.8 km north-northeast of Filo Lapa, at the Hilo Libre zone, hand trenching returned up to 8.5 grams gold over 1.3 metres. First Point discovered Hilo Libre late last year, when trench sampling of the quartz-breccia vein returned 12.5 grams gold over a true width of 2.9 metres. The vein is exposed at the crest of a ridge and obscured by overburden to the north and south. This northerly vein trend runs parallel to and beneath the Filo Lapa zone.

Filo Lapa and Hilo Libre are hosted in a 3-km-long, north-south trend of soil geochemical anomalies and alteration, and neither zone has been drill-tested.

Bradshaw compares the style of mineralization and the prospectivity of the Cacamuya project to Meridian Gold‘s (MDG-N) El Peon mine in northern Chile. Meridian’s first round of drilling over the lucrative property saw only six of the 13 holes cut intercepts grading greater than 3 grams gold. Its second round intersected the Quebrada Orito deposit, with holes yielding up to 10.9 grams gold and 123.4 grams silver over 100 metres. This zone eventually was extended over 3 km along a continuous vein system. Meridian then went on to identify a north-south structure within a drainage east of Quebrada Orito. Surface samples returned low-grade gold values, but the first hole drilled into the structure cut 34 grams gold over 12 metres, resulting in the discovery of the Quebrada Colorada deposit. At the end of 2000, the El Peon property held a resource of about 1.1 million tonnes grading 28.1 grams gold and 470.5 grams silver.

“When Meridian completed 27 holes at El Peon, it did not have as dramatic results as we have on surface,” says Bradshaw.

Sliding-scale NSR

First Point initially acquired a 60% stake in the Cacamuya property from Battle Mountain Gold (which has since merged with Newmont Mining) by issuing 700,000 shares and agreeing to spend US$1 million on exploration over five years. Battle Mountain retains a 0.6% net smelter return royalty (NSR) on the property. The company also has an option to earn the remaining 40% interest in the property from Breakwater Resources (BWR-T). Under this deal, First Point must issue 500,000 shares once the Honduran government implements a new mining code and converts title to the property. Breakwater retains a sliding-scale NSR of 0.4% at a gold price of US$325 per oz. and a silver price of US$5.25 per oz. The maximum royalty of 1.2% kicks in at US$400 and US$7 per oz., respectively.

Comprising 140 sq. km, Cacamuya occupies the northern extension of the large graben feature known as the Nicaraguan Depression. To date, exploration has defined a large mineralizing system measuring 4 by 2 km.

In the mid-1990s, the Battle Mountain-Breakwater joint venture drilled 14 holes over the anomaly, which measured 1.2 km long and ranged in width from 60 to 250 metres, hoping to outline a deposit minable by open-pit methods. The program failed to outline a bulk-minable zone. However, five of the holes cut a high-grade, gold-bearing structure over a 600-metre strike length to a vertical depth of 75 metres at Cerro Chachagua.

In 2000, First Point drill-tested the Cerro Chachagua structure, where previous drilling yielded up to 104.7 grams gold and 743 grams silver over 6.2 metres. Three of the six holes returned values greater than 1 gram gold.

With a $750,000 financing in hand and the prospect of adding up to $870,000 through the exerci5

sing of June 1 warrants at 50 apiece, First Point aims to complete another round of mechanical trenching followed by a 20-to-30 hole drill program.