Ocampo, Mexico —
The Ocampo mining district, 230 km southwest of the city of Chihuahua, lies in the centre of a 60-km-wide caldera. Topography is characterized by high, un-deformed plateaus incised deeply by erosion, with elevations ranging from 1,600 to 2,200 metres above sea level.
Beginning in the late Cretaceous period and continuing throughout the Cenozoic era, the area was subjected to intense volcanic activity that produced a thick sequence of volcanic flows, tuffs and agglomerates of andesitic-to-rhyolitic composition, as well as related intrusive rock.
Volcanic rocks in the Sierra Madre Occidental are divided into two main stratigraphic groups: Lower Volcanic and Upper Volcanic. The former, which dominates the Ocampo project area, consists mostly of massive andesitic flows and tuffs, and hosts most of the gold-silver deposits in the region. The latter group, dated at 28 million years old, consists of felsic ignimbrites, tuffs, flows and volcaniclastics.
The Ocampo district displays classic epithermal gold-silver mineralization and can generally be classified as a low-sulphidation, adularia-sericite system. Hydrothermal mineralization was episodic and accompanied at least six deformation events. Quartz deposition accompanied all six phases of structural deformation, though gold and silver appear to have been deposited only during the last two events.
Ocampo’s gold and silver mineralization is mainly hosted by andesitic agglomerates that have been brecciated and cemented with quartz. These mineralized zones average 20 metres in true thickness and can extend several kilometres in length and hundreds of metres in vertical extent. A mineralized stockwork and argillized halo can often be found encompassing the breccia zones.
The gold-to-silver ratio varies throughout the district, but overall it is about 1-to-50, making the two metals of equal economic importance.
The Ocampo district can be broadly divided into three areas: Northeast (NE); Southern (or PGR, from the Plaza de Gallos-Refugio deposits); and Northwest.
The first two areas contain more than 20 deposits that have been mined, off and on, from 1804 to the present by English, French, American and Mexican interests, reportedly producing a total of at least 2 million gold-equivalent oz.
The NE area consists of a 2-km-long north-trending structure, Belen-San Jose, that is intersected by northwest-trending structures.
The PGR area is dominated by a large northwest-trending structure, totalling 7 km in length, that aligns with a larger northwest-trending structural fabric found throughout the Sierra Madre Occidental.
The Northwest area is a relatively unexplored, high-sulphidation quartz-enargite system made up of rhyolites and dacites that appear to be stratigraphically lower than the NE and PGR areas and may underlie them.
Modern mineral exploration began at Ocampo in 1997, after the Mexican government revised its mining laws to encourage foreign investment. During 1997-8, Australian junior Mogul Mining, in partnership with local Mexican company Minerales de Soyopa, completed district-scale mapping, as well as 59 reverse-circulation (RC) drill holes totalling 6,300 metres.
Based on those data, Australian-based Computer Aided Geoscience (CAG) completed a resource estimate of four deposits in the PGR area: Plaza de Gallos, Refugio, Conico and Picacho. At a cutoff grade of 1 gram gold-equivalent per tonne, resources were estimated to be: 1.6 million tonnes grading 2.46 grams gold and 99 grams silver at Plaza de Gallos; 1.9 million tonnes of 2.50 grams gold and 121 grams silver at Refugio; 1.6 million tonnes of 1.94 grams gold and 100 grams silver at Picacho; and 750,000 tonnes of 1.42 grams gold and 52 grams silver at Conico. Together, the four deposits were calculated to contain 410,000 oz. gold and 18.7 million oz. silver.
In 1999, another company, Augusta, tried to acquire Mogul’s interest in the project, but both companies failed to meet work commitments and relinquished their interest in the joint venture.
Despite that setback, two hard-working American field geologists from the Mogul-Augusta days, Greg Liller and Hall Stewart, who still believed in the Ocampo project, hooked up with Dartmouth, N.S.-based Gammon Lake. The company was then led by a board that was technically weak but skilled in promotion and money-raising. Gammon later moved to bridge the gap between head office and the field by appointing to its board veteran Toronto-based mining executive Dale Hendrick.
Gammon has grown up along with the Ocampo project, jumping in February from trading over-the-counter on the Canadian Dealing Network market to a listing on the Toronto Stock Exchange. Today, the company is followed closely by a large group of investors in the Maritimes, with more than 600 people turning out for a recent investors’ information night in Halifax.
Since becoming involved at Ocampo in January 1999, Gammon has raised in excess of $10 million and, with five rigs now in operation, has turned the district into one of the most active exploration camps in Mexico.
Already, Gammon has carried out a district-wide program of underground and surface mapping and sampling and has completed 25,000 metres of core and RC drilling in 240 holes.
Most drilling has focussed on the Plaza de Gallos and Refugio deposits, where the company aims to extend and better define the extent of gold and silver mineralization. CAG will use the data in a new resource study, with the Plaza de Gallos-Refugio portion of the revised estimate due to be completed by December.
Since completing this phase of drilling, the program has been expanded to test undrilled targets and better define the grade and continuity of other drilled targets.
Gammon has also sought help from several more consultants, including Denver-based Pincock Allen & Holt, which, after completing two reviews of Gammon’s exploration program, gave it the thumbs-up. Meanwhile, Montana-based Mining Millennium Associates (MMA) analyzed the district’s structures and stated that there is a “high potential” for the discovery of additional deposits amenable to large-scale bulk mining. Toronto-based structural-geology consultant Derek McBride carried out additional structural work.
MMA’s work documented the six deformation periods that were produced by a combination of an emplacement of a postulated intrusive beneath the district and extensional regional tectonics. Stereonet analysis shows that dip-slip and strike-slip movement accompanied each phase of structural deformation.
The local dip of the shear structures at Ocampo can vary from vertical to 55 degrees, with dilation zones appearing to form where changes in dip occur. These dilation zones can result in increased grades and thicknesses of the gold and silver mineralization. Grades and thicknesses also increase at the intersections of structural features.
Preliminary metallurgical tests demonstrated that Ocampo’s gold-silver mineralization is amenable to cyanide extraction, and bottle-roll tests indicate that excellent gold and silver recoveries, with low reagent consumption, can be achieved by standard milling and processing.
Additional metallurgical tests are under way, and bulk-sampling, obtained by core drilling, is nearing completion. Reno, Nev.-based Kappes Cassiday & Associates will evaluate the possibility of using heap-leach recovery techniques on low-grade ores from the Plaza de Gallos-Refugio deposits.
The topography at Ocampo will allow for relatively straightforward open-cut mining, with several advantages: relatively low stripping ratios; valleys that can be filled with waste rock; and a flat canyon floor that can be used to locate a mill, leach pads and tailings compounds.
There’s plenty of blue-sky potential at Ocampo, considering that past production exploited only mineralized zones that outcropped at surface. As well, past production has
made use of relatively crude mining methods, with development being limited in depth to areas at, or slightly below, the water table.
In August, Gammon raised an additional $4.5 million for work at Ocampo by privately placing 1 million special warrants priced at $5 apiece.
With a new set of agreements negotiated in August, Gammon’s project area now covers 41 mining titles encompassing 3,499 ha. Gammon has gained control of almost all the known mineralization in the entire Ocampo district through its agreements with Minera Fuerte Mayo and Minerales de Soyopa, both of which are based in Mexico.
Ownership of the Ocampo district is complicated, but Gammon apparently has: a 60% interest (currently being bought from Fuerte for 2 million Gammon shares and US$1 million cash) in a 477-ha property and an option to buy the remaining 40% interest at a price of US$5 per oz. of proven gold and gold-equivalent reserves; an option to acquire from Soyopa (for specific work commitments and US$5 million cash) a 49% interest in an additional 17 mining titles covering an 2,064-ha area, and an option to buy 100% of the shares of Soyopa (for US$12 million cash); and a 100% ownership in another 10 mining titles.
Gammon paid out, in shares, the following amount as consulting fees to a Chihuahua-based arm’s-length company named Compania Minera Global on the above agreements: $625,000 to renegotiate the Fuerte joint venture; $2.1 million to negotiate the Soyopa joint-venture agreement; and $4.1 million to negotiate the Soyopa buyout agreement. These fees were capitalized as Ocampo project expenditures on Gammon’s balance sheet.
Be the first to comment on "Exploration; Gammon Lake takes shine to Ocampo’s gold-silver potential"