Vancouver – The polymetallic San Agustin deposit in Durango, Mexico, continues to demonstrate its growth potential for Geologix Exploration (GIX-V) in advance of a resource estimate due out next month.
The Main zone and Zone 2, contiguous deposits along a northeast trend, have now been outlined for 550 metres along strike and from 250 to 550 metres in width, still open at depth. Hole 138, collared near the centre of the southern edge of the zone, returned 121.5 metres grading 0.55 gram gold per tonne, 25.96 grams silver per tonne, 0.12% lead, and 0.55% zinc, from 120 metres depth.
Along the same section, 100 metres to the northwest, hole 140 intercepted 103.5 metres grading 0.43 gram gold, 22.48 grams silver, 0.08% lead, and 0.56% zinc, from 126 metres depth. And 200 metres along strike hole 141 cut 99 metres grading 0.55 gram gold, 4.94 grams silver, and 0.52% zinc from 58 metres depth, followed by 59 metres grading 1.9 grams gold, 7.44 grams silver, and 0.12% zinc from 180 metres downhole.
Other results from the Main zone and Zone 2 include hole 130, which returned 240 metres from surface grading 0.43 gram gold, 38.05 grams silver, 0.16% lead, and 0.45% zinc, and hole 133, which returned 323 metres from surface grading 0.45 gram gold, 23.25 grams silver, 0.2% lead, and 0.94% zinc. The hole ended in strong mineralization: the bottom 216 metres of the hole averaged 0.61 gram gold, 30.45 grams silver, 0.29% lead, and 1.34% zinc.
Results from another 54 drill holes are pending. Geologix is focusing on the Main zone and Zone 2 because of the design of the property option agreement. Geologix signed the agreement with Silver Standard (SSO-T, SSRI-Q) in 2006, handing over 1 million shares and agreeing to spend $2 million and complete 15,000 metres of drilling within two years.
By May Geologix has to prepare a resource estimate for the parts of San Agustin considered prospective when the agreement was signed primarily the Main zone and Zone 2 and then pay Silver Standard, on a sliding scale, for each ounce of gold and silver in the resource estimate. Based on current metal prices, Geologix would pay US$15 per oz. gold and US$1 per oz. silver for measured, indicated and inferred resources within the estimate. By confining the resource estimate to a smaller area, the payout will be less than it would be if Geologix were aggressively pursuing expansion drilling.
If all obligations are met, Geologix will hold San Agustin outright and plans to start exploring the Main and Zone 2 extensions, which lie to the north and southwest, as well as new zones identified in prospecting. Silver Standard will retain a 2.5% net smelter royalty, capped at 2 million oz. gold equivalent.
The polymetallic project already hosts a historical resource of 11.2 million tonnes averaging 0.96 grams gold per tonne and 12.86 grams silver per tonne in the Main zone. Along trend to the northeast work has uncovered high-grade gold-silver structures.
The 576-hectare San Agustin property lies 85 km north of the state capital city Durango via paved road, and national power lines are 6 km east of the property. The Peoles zinc smelter is a 4-hour drive to the east.
Geologix gained 15 on the latest drill results to close at $2.25 in Mar. 13 trading. The company has a 52-week trading range of 90 to $3.20 and has 41.5 million shares issued.
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