The end of a 36-year-old civil war, combined with favourable revisions to the national mining code, has paved the way for junior explorers to evaluate the untapped mineral potential of Guatemala.
Among the first exploration companies to venture into the country, after a degree of political stability was restored following the December 1996 peace accord, was Mar West Resources. The Vancouver-based junior recognized that the underexplored Tertiary volcanic belt in the southern part of the country held particular promise, and so in 1997 it sought, and was granted, the first concession under the new mining code.
The 39-sq.-km Jutiapa II property covers a series of low rounded hills along the western boundary of the Ipala graben fault structure, near the border with El Salvador. The hills are capped with a thick zone of silica-rich sinter and flanked by an active hot springs along the southern base. The junior quickly outlined a 2.1-km-by-350 metre gold-in-soil anomaly, known as Cerro Blanco. Mar West drilled nine holes into the prospect cutting significant gold mineralization hosted in tuffs and volcaniclastics.
In 1998, the prospect was acquired by
The Reno-based company reports that the preliminary open-pit resource at Cerro Blanco stands at 28.9 million tonnes grading 1.32 grams gold and 18.63 grams silver per tonne. The calculation is based on 56 widely spaced drill holes totalling 8,429 metres, and on a cutoff grade of 0.5 gram gold per tonne. An open-pit design is proposed, and Glamis says it has outlined a high-grade zone of 10.2 million tonnes grading 2.47 grams gold and 30.1 grams silver, as well as a lower-grade portion consisting of 18.7 million tonnes grading 0.7 gram gold and 12.4 grams silver.
Metallurgical tests indicate that, with milling, the higher-grade portion could achieve recovery rates of 85% gold and 78% silver. Glamis believes the lower-grade portion may be amenable to dump-leaching, at a low recovery rate. More metallurgical tests are planned.
The scoping study indicates a modest internal rate of return of 10.4% at gold and silver prices of US$300 and US$5.25 per oz., respectively. Capital costs are estimated at US$70 million; total cash costs, at under US$200 per oz. gold-equivalent.
Glamis says the resource must be expanded before the deposit can be advanced to the feasibility stage, and, toward this end, drilling is under way.
After a brief stint with Glamis, the principals of Mar West turned their attention to managing
In December 1999, the Simon Ridgeway-led company acquired the right to a 100% interest in the 12-sq.-km El Tambor gold prospect in central Guatemala. In return, the company agreed to pay a subsidiary of
Situated 40 km north of Guatemala City, El Tambor is accessible by paved roads. The project covers a series of low-sulphidation, epithermal gold zones hosted by highly deformed Paleozoic schists.
A program of prospecting and chip sampling rapidly identified several mineralized zones along a series of east-west trends in an area measuring roughly 5 by 4 km.
The most promising prospect is the Bridge zone, where chip sampling along the banks of a small river yielded 3.89 grams gold over 75 metres. Across the river, an old railway cut returned 2.6 grams over 65 metres.
Lupita target
At the eastern end of the alteration trend, Radius is evaluating the Lupita anomaly, which measures 300 metres long by 40-50 metres wide. The discovery of this anomaly was based on a 2.5-gram grab sample of float taken from a creek.
Along the northern trend is the so-called Scandalous anomaly, which occupies a 2-km-by-200-metre area of alteration, with several multi-gram hits associated with a zone of weak silicification. And along a southern anomalous trend, the Spikey zone has returned discontinuous values ranging from fractions of a gram to multi-grams.
The most recent program has also led to the discovery of the Valery zone, which is roughly 150 metres wide and 300 metres long. The few trenches that have been completed to date average 1-1.5 grams across 50-60 metres.
A further 2 km to the east, the Sastre prospect is defined by several old tunnels and exploration pits. A grab sample of float material taken from one of the exploration pits ran 350 grams gold. Sampling from a tunnel driven on a low-angle breccia yielded 14.5 grams gold.
Targeting the Motagua fault (a crustal shear zone that cuts across central Guatemala, separating the younger volcanic belt to the south from older basement rocks in the north), Radius has applied for more than 2,000 sq. km of new concessions adjacent to El Tambor.
The junior hopes to have drill targets ready for early next year.
Francisco active
Situated 30 km west of Huehuetenango, the Marlin property has the potential to host a large, low-sulphidation, epithermal gold system. It was discovered in 1998 by Montana Gold, a private Canadian company, and is know to host gold-silver mineralization in three zones over a 1.5-km strike length.
The Main zone has been outlined over a 350-by-200-metre area, with trench samples returning up to 13.34 grams gold and 232 grams silver over 118 metres. From the zone were collected 305 chip samples that returned an average grade of 6.06 grams gold and 71 grams silver.
Some 600 metres to the west, at the Los Cochis zone, 82 chip samples were collected, and these returned an average grade of 1.15 grams gold and 12 grams silver.
At the Don Pancho-Don Tello zone, 200 metres south of the Main zone, 111 chip samples collected over an area measuring 900 metres long by 10-50 metres wide. The average grade, in this case, was 3.47 grams gold and 183 grams silver.
To confirm Montana’s assay results, the junior implemented a due diligence program of mechanized trenching and sampling at Marlin. Francisco then hired an independent engineering firm to verify the results from both programs. A comparison of the assay results of rock channel samples showed reasonably good correlation for both silver and gold grades.
New trenching at the periphery of the Main zone, along the Don Pancho-Don Tello structural corridor, returned:
16 metres grading 1.06 grams gold and 3.1 gram silver;
30 metres averaging 0.71 gram gold and 16.2 grams silver; and
18 metres grading 0.55 gram gold and 7.5 grams silver.
Francisco plans to determine the extent of the low-grade mineralization later this year.
The due-diligence program has also identified a new mineralized target, 1.5 km southwest of the Main zone. The prospect lies along strike from its principal target and covers a 600-by-200-metre area. Initial grab samples returned up to 1.85 grams gold and 15 grams silver.
Hosted in stockworks and breccias, the mineralization is controlled by two regional structures that coalesce around a volcanic plug. All four zones remain open along strike.
The surrounding Guatemalan properties that Francisco also picked up host three additional gold-silver targets: La Cienega, Roundstone and El Salitre. The most advanced target, La Cienega, has been identified over a 1.4-km-by-250-metre area. A total of 215 chip samples collected from the silicified zone returned an average grade of 15 grams silver and up to 3.5 grams gold.
In August, the junior launched a 1,500-metre drill program aimed at testing the vertical and lateral extent of high-grade mineralization in the Marlin Main zone. Assay results are pending.
Francisco obtained the extensive land position in Guatemala, as well as a joint-venture interest in El Salvador, through the acquisition Montana Gold. The privately held company was acquired in return for the issuance of 600,000 shares. In addition, Francisco will issue one share for each additional minable ounce of gold-equivalent (above 600,000 oz.) discovered on the Marlin property. On the additional properties, Francisco will issue one share for each minable ounce of gold-equivalent if a minimum 250,000 oz. gold-equivalent is discovered.
In the same area, some 30 km northwest of Huehuetenango,
The first five holes in the new program were collared on the Anabella East anomaly. Covering a 1-km-by-175-metre area, the geochemical anomaly lies along strike of the Anabella mine workings and is defined by strong arsenic and antimony soil values, along with elevated gold values. Grab samples returned up to 67.9 grams gold, whereas channel samples yielded 5.45 grams gold over 14 metres.
The holes cut interbedded carbonaceous siltstones and shales with weak quartz and quartz-ankerite veinlets containing weakly anomalous gold values. Based on the low-grade results from the drilling, Aquest now feels that the Anabella deposit does not extend east-southeast, as was suggested by the soil geochemistry.
To the southeast, the remaining four holes tested the Mango-Tacana Ridge anomaly, which is defined by anomalous arsenic-in-soil values over an area measuring 1.5 km by 200 metres. Gold-in-soil values generally mirror the arsenic values; antinomy-in-soil values are highly elevated over the Mango zone and weakly anomalous over the Tacana Ridge zone. Float samples collected over the Mango zone returned up to 3.2 grams gold, whereas chip samples returned up to 1.1 gram gold over 4.5 metres at the Tacana Ridge adit. All four holes intercepted quartzites with interbedded carbonaceous siltstones and shales that host weak-to-moderate quartz-ankerite veining. The veins were found to contain no significant gold mineralization.
Last year, Aquest evaluated the property by means of underground sampling and the drilling of 19 holes on surface. The results indicate a possible resource of about 4.5 million tonnes grading 2.6 grams gold per tonne gold and 0.5% antimony at the Anabella mine, and 1.75 million tonnes grading 5.4 grams gold and 2.3% antimony at the LC mine.
The property, which Aquest acquired from a privately held Guatemalan company, covers a 5-km-long trend of gold-antimony mineralization, plus a mine, mill and smelter.
The acquisition price was US$4 million in cash and US$6 million in Aquest convertible debentures. The agreement also calls for prepaid royalties of 5% of the recoverable metal value of the first 1 million tonnes of ore and 3% on the remaining reserve. Total payments are capped at US$25 million.
The deal was subject to a 9-month due diligence, but, based on the evaluation, Aquest decided to extend this period to April 2002.
In December 1999, South African-based
In early August, Aquest added an additional 600 sq. km of real estate to its Guatemalan portfolio. Situated along the prospective Jocotan fault, some 50 km northwest of Glamis’s Cerro Blanco project, the exploration licence is considered prospective for gold and silver mineralization associated with epithermal hot springs systems.
Once the licence is awarded by the Guatemalan Ministry of Mines and transferred to Aquest, the junior will issue 700,000 shares to the vendor. A one-time payment of US$15,000, payable in shares, is also required within 30 days of the commencement of drilling. The vendor will retain a 0.5% net smelter return royalty.
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