Focus hits and misses at Nueva California

VANCOUVER — The first set of results from Focus Ventures’ (FCV-V) second round of drilling at the Nueva California gold-silver project in northern Peru returned a few goods hits as well as some misses. And even though the news depressed the company’s share price by 32%, Focus is still certain this historic mine holds precious metal promise.

Focus is drilling a 100-metre grid at Nueva California to create a broad, deep geological profile of the entire property, which is home to a small, active underground mine run by a local landowner. Focus is earning into the property, which is near the town of Huaraz.

The mine, which has been active for 26 years, comprises a lower set of workings to the southwest and a higher set of workings up a hill to the northeast. Originally, backed by the elevation difference, Focus’ geologists thought the upper workings tapped into a higher portion of an epithermal system while the lower workings plugged into a lower segment of the system. The first results from the company’s 2010 effort, however, are forcing Focus to switch its theory.

Hole 12 was collared on the tailings that sit above the lower mine workings. The first 24.4 metres of drill core, from the tailings pile, returned 2.62 grams gold per tonne and 105 grams silver per tonne. Then, at 52 metres downhole, the drill hit the actual system and returned 46 metres of 2.03 grams gold and 95 grams silver.

Hole 9, collared just 100 metres to the northeast, showed similar strong hydrothermal alteration and rock type, but did not return any significant mineralization. Then hole 7, located another 100 metres to the northeast, hit a short, high-grade intercept: 2.25 metres grading 14.14 grams gold and 228 grams silver, from 34 metres depth.

The hit-and-miss pattern continued with holes 5 and 6, collared 100 metres apart on another northeast-trending line 100 metres to the north. Hole 5 cut just 2.7 metres grading 3.67 grams gold and 43 grams silver from 61 metres downhole, but hole 6 returned 53.6 metres carrying 1.63 grams gold and 19 grams silver from surface.

In the upper mine workings, several holes did not encounter precious metal mineralization. Others did, such as a 20-metre intercept in hole 13 grading 1.56 grams gold and 47 grams silver. Last year, Focus targeted its four-hole initial drill program on the upper mine workings area and returned several strong results, including 69.6 metres of 1.84 grams gold and 22 grams silver and 38.2 metres of 1.7 grams gold and 20 grams silver.

“It seems the lower mine is actually the upper part of the system and that’s where we’re drilling really good intervals of argillite and hydrothermal breccias,” says David Cass, president and CEO of Focus. “Hole 12 returned some of the best grades we’ve seen to date, including really high silver, so that alludes to that fact that we’re higher in the system. The upper workings are lower parts that have been upthrusted and eroded; up there we ended up drilling three or four holes right into footwall granodiorite.”

Cass is excited to see the assay results from hole 18, which tested the lower mine workings area 100 metres south of hole 12 and returned a sequence of altered and silicified argillites and hydrothermal breccias over 140 metres. Results from hole 18 are pending.

As for the hit-and-miss nature of the latest results, in particular the miss in hole 9 just 100 metres away from the hit in hole 12, Cass can only chuckle and blame complicated geology: “What it’s telling us is the mineralization is typically epithermal — it’s gold and it’s unpredictable.”

To help guide future drilling, Focus is extending its induced polarity survey to the south, to include more of the lower workings, and plans to reorganize its drill program somewhat to probe the lower area more.

Investors displeased with the spotty results pushed Focus’ share price down 31¢ in two days of trading to close March 31 at 67¢. The company, which listed on the Venture board in September, has seen its shares trade between 21.5¢ and $1.38. Focus has 29 million shares outstanding.

Focus added a second Peruvian project to its portfolio. In March, the company inked a deal with a private Peruvian company to earn into the Chucara gold-silver project, roughly 120 km north of Nueva California within the La Libertad gold mining district. Barrick Gold’s (ABX-T, ABX-N) Lagunas Norte gold mine sits 45 km to the northwest.

Chucara is home to an epithermal system hosted in sedimentary rocks, with gold and silver associated with veins and mantos. The project includes an old mine that produced 160,000 tonnes grading 137 grams silver and 6% lead in the late 1970s but never tested for gold.

Focus compiled over 1,000 surface and underground channel, panel, and grab samples from both vein and host rock showings, which produced an average grade of 2.1 grams gold; of those, samples taken from veins and mineralized structures produced an average grade of 6.1 grams gold and 330 grams silver.

The complex system of veins, structures, and mantos extends over 2 km of strike.

“We’ve been trying to get this property for two years,” says Cass. “It was optioned to another company and we were kind of waiting for them to drop the option, which they did. We’ve been there a couple times and really like it — we get a good run of samples right over the 2 km and the nice thing is they’re consistently high in both gold and silver.”

Cass says the immediate sediment- hosted target holds potential as a near-surface bulk target; in addition many of the structures have an intrusive structure as the footwall, which leads to a more conceptual intrusive-hosted porphyry feeder target as well.

“We took it because how often in Peru do you see a couple of kilometres of ground with high gold and silver values, right along trend from several big mines, and no drilling?” says Cass. “It’s a drill-ready property and we’re going to be drilling it in the latter half of this year.”