EXPLORATION 1997 — Golden Hemlock seeks treasure of Sierra Madre

Banking on the old adage that the best place to find a new mine is near an old one, Golden Hemlock Resources (GHE-V) is looking for treasure in the Sierra Madre mountains surrounding this Mexican village.

The San Jose de Gracia gold property, situated in Sinaloa state, comprises 3,500 ha and is marked with 67 old adits and shafts. A 250-tonne-per-day flotation mill began production in April.

“It’s really a mining district, rather than a single property,” Golden Hemlock Chairman Robin Forshaw told The Northern Miner during a recent visit.

The terrain is mountainous, rocky and covered with low trees and scrub vegetation. The climate is semi-tropical, with the dry season stretching from July to mid-November.

The Miner landed at a 4,000-ft.-long gravel air strip near the town in a narrow valley, though the area is also accessible by a 78-km-long, winding, gravel road from the municipal capital of Sinaloa de Leyva.

The Vancouver-based company acquired the property in July, when it bought Minera Finisterre, a private Mexican company which held the concession.

Finisterre gained control of most of the sprawling district in 1977, and until Golden Hemlock stepped in, there had been no co-ordinated effort to define reserves.

Golden Hemlock can earn a 100% interest in San Jose de Gracia, while West Coast Mines has a 24.9% net profits interest, over which Golden Hemlock holds a right of first refusal.

The region is underlain by a Paleozoic sequence of marine sediments, including argillites, quartzites and limestones. In the San Jose de Gracia camp, these were overlain by an extrusive package of andesites and brecciated tuffs, which were subsequently intruded by stocks.

Geologically, the property is characterized by extensive veining, stockworks and brecciation, and by secondary quartz and carbonate carrying pyrite with minor chalcopyrite and base metals. The gold appears to follow the sulphides.

Most of the area’s residents earn their living from agriculture, though San Jose de Gracia (which, for a brief time, was the state capital) has a long history of mining.

The first prospectors were the Spanish conquistadores, who arrived in 1630.

But the fierce resistance of local Indians prevented gold from being discovered until 1828, when a group of passing friars noticed that the fences of a local goat pen had been built with quartz laced with visible gold. From that moment, the rush was on. More than 1 million oz. gold were extracted by means of underground mining of high-grade hydrothermal veins from 1828 to 1910, the year the Mexican Revolution broke out.

Now Golden Hemlock is trying to prove there is enough left for an economic gold mine.

The area of interest, measuring 6 by 2 km, is marked by extensive limonite alteration from oxidized sulphides and possibly altered mafic minerals in the host rocks.

Four targets

Exploration has focused on four areas: Tres Amigos and La Union (both of which are envisaged as possibly high-grade underground or open-pit targets), and the Gossan Cap zone and La Prieta (which have bulk-tonnage potential).

n Tres Amigos — The Tres Amigos vein strikes northeast and dips 65 northwest.

On the northeastern side of the Rosario Creek ravine, the vein has been developed by three adits, 8-10 metres apart, along a strike length of 50-70 metres. The vein near the lower adit is strongly brecciated and silicified.

“We thought it was about 2-3 metres wide, but we’re finding it’s more like 10-12 metres,” said Forshaw.

Ronald Tammekand, a Golden Hemlock director who works out of Minera Finistre’s offices in the nearby resort of Mazatlan, is just as upbeat. “One day Robin and I climbed to the top, and everything fell into place. This whole mountain is one geochemical anomaly, but we still don’t know what to do with it.”

Proven and probable reserves at the target are estimated at 96,300 tons grading 0.132 oz. gold and 0.78% copper, on a fully diluted basis. Golden Hemlock hopes to expand that estimate by means of ongoing exploration. Last fall, the company raised $1.5 million in a private placement, most of which will be applied to Tres Amigos, as well as La Union and the Gossan Cap.

In February, a 14-hole program of diamond drilling was completed at Tres Amigos over a length of 350 metres and to a depth exceeding 100 metres.

Assays from six holes include: 3 metres grading 7.8 grams gold and 83.5 grams silver per tonne, plus 2.35% copper, in hole 1; 9 metres of 4.12 grams gold, 22.78 grams silver and 0.6% copper, and 2 metres of 12.23 grams gold and 11.9 grams silver in hole 2; 4 metres of 4.12 grams gold and 2 metres of 2.72 grams gold in hole 3; and 18 metres of 2.73 grams gold and 2.3 metres of 2.58 grams gold in hole 7. Hole 4 was stopped in mineralization due to mechanical problems, and returned 4 metres of 2.17 grams.

* La Union — The mine at La Union, to the southwest, was developed on two levels, and shows a high-grade, but possibly erratic, vein trending north and dipping flatly to the west. The vein appears to be a semi-dip slope, which may allow surface extraction with tolerable stripping ratios.

Chip samples returned grades ranging from 6.5 to 208.9 grams gold. The average depth from surface to the top of the vein is 5-15 metres. The drill is being moved to La Union following the just-completed 14-hole program at the Gossan Cap. Assays are pending.

* Gossan Cap — The Gossan Cap zone, near the tiny village of Rosarito, seems to overlie the old Mina Grande workings, which produced between 1828 and 1852.

The area is characterized by intense limonite staining of the volcanic rocks, with extensive stockwork zones, as well as zones of silicification and minor secondary copper minerals. Chip samples returned values of 1-10 grams gold.

The area’s exact size is still unknown, but Golden Hemlock’s preliminary estimate is 300 by 300 metres, with a depth of up to 30 metres.

* La Prieta — La Prieta, east of the Gossan Cap, was one of the property’s larger producers, with 215,000 oz. gold having been mined between 1887 and 1920. There are several adits totalling 70 to 1,000 metres, and stoping areas measuring up to 2 metres wide.

Unlike most of the other old mines, La Prieta occurs in an apparent inlier of the earlier sedimentary rocks which have been highly fractured, altered and rehealed with extensive stockwork and veining.

In early 1996 Teck (TEK-T) sampled some of the waste dump material, and found values averaging 1.72 grams gold per tonne.