LATIN AMERICA — Argentine exploration tied to Chilean gold trends

Mineral exploration in Argentina continues to focus on extensions of Chilean gold belts, including El Indio and Maricunga.

The success of Argentina Gold’s Veladero project, in the northwestern province of San Juan, testifies to the potential of large gold-bearing systems along the Andean Cordillera. Argentina Gold was acquired by Homestake Mining (HM-N) for US$300 million following its discovery of a deposit estimated to contain 5.8 million oz. gold and 72.2 million oz. silver.

Another hot spot is Patagonia, in the country’s southern tip. The 50,000 sq. km region, also known as Deseado Massif, has excellent potential for hosting large gold-silver low-sulphidation epithermal deposits. A thin cover of basaltic volcanics masks a large portion of Patagonia, and so little of it has been explored.

Among the juniors planning to launch exploration programs in Argentina in the next few months is Minera Andes (MAI-A). The company will perform surface work and reconnaissance drilling in an attempt to outline a disseminated silver-gold target on its Saavedra West prospect in the Santa Cruz province.

Saavedra West is one of nine geologic targets in the northern portion of Minera Andes’ wholly owned El Pluma and Cerro Saavedra properties, which together comprise 228,000 acres.

A large geophysical target was identified beneath an area in which previous drilling intersected values as high as 61.53 grams gold and 1,647 grams silver per tonne over 25 ft. The high-grade intercepts were encountered in several discontinuous breccia pipes at the Discovery Hill prospect, as well as on the nearby Sinter Flats prospect. The deepest hole bottomed at 100 metres.

Follow-up mapping and geophysical surveys outlined four geophysical targets beneath the previously drilled high-grade mineralization.

The proposed program for the coming season at Saavedra West includes diamond drilling to test the new targets at Discovery Hill and Sinter Flats.

At the same time, diamond and reverse-circulation drilling will be performed on the nearby Huevos Verdes vein system. Huevos Verdes is 5 km north of the Saavedra West target. Earlier this year, a shallow 6-hole program encountered high-grade gold and silver mineralization in a vein structure. The best hole, No. 39, cut 7 metres grading 9.74 grams gold and 630.3 grams silver.

Another company focused on Santa Cruz province is Abacus Minerals (AMC-V), which stands to acquire six properties from Barrick Gold (ABX-T). To do so, Abacus must spend US$2.7 million on exploration and issue 600,000 shares to Barrick over four years, with the major retaining a 50% back-in right.

The most advanced of these properties is La Manchuria, where drilling to date (14 diamond drill holes in 1998 and eight RC holes this year, totalling 3,100 metres) has outlined a 450-metre-long system containing anomalous-to-high-grade epithermal gold mineralization. The deposit remains open in all directions and is characterized by quartz vein swarms and quartz stockworks. The mineralization is associated with intense silica-clay-hematite alteration.

During the last round of drilling, Abacus identified a target area 2 km southeast of the primary target. Geochemical data point to a well-defined, continuous mercury soil anomaly with values of up to 2,400 parts per billion gold. Abacus believes this new South Grid target area may represent a mineralized epithermal system close to the paleo-surface. (Low precious metal values and highly anomalous mercury values can be characteristics of the upper part of an epithermal system.)

Lukas Lundin-led Tenke Mining (TNK-T) has followed in the footsteps of its sister company, Argentina Gold, by inking a deal to acquire the Los Caballos claims of Cameco (CCO-T) and Westward Explorations (WWE-V), as well as surrounding ground held by Cyprus Amax Minerals (CYM-N).

These concessions, dubbed the Vicuna property, are 75 km north of Veladero in an unexplored region of San Juan, between the Maricunga belt to the north and the Indio belt to the south. Vicuna comprises a series of northwesterly-trending structures in a caldera setting within a Miocene-aged dacite volcanic complex. Tenke reports that a large hydrothermal system with a high sulphidation alteration assemblage has been traced over 20 km in a north-northeasterly direction. The system is 1 to 2.5 km wide.

To earn its interest Tenke must spend US$4 million on exploration and issue 2.4 million shares over four years. An aggressive program of geological mapping, sampling and geophysics is to begin in October, followed by drilling late in the season.

Meanwhile, Orko Gold (OK-V) has an option to earn a 60% stake in TNR Resources‘ (TRR-V) 54-sq.-km Ortiga project, also in San Juan. In return, Orko is required to pay US$340,000 and issue 600,000 shares before Nov. 25, 2001.

In April, Orku wrapped a 6-hole, 1,366-metre RC program that targeted the Breccia zone. Each of the holes intersected favourable altered and anomalously mineralized volcanics, confirming the presence of an epithermal gold system. Follow-up drilling is planned.

The Breccia zone is characterized by evidence of several explosive events represented by phreatomagmatic breccias, bedded hydrothermal breccias, pebble dykes and a magmatic-hydrothermal breccia pipe measuring up to 100 metres in diameter. The breccias are hosted in strongly altered felsic pyroclastic rocks. Quartz-alunite alteration has been observed over a 1-sq.-km area in a larger envelope of advanced argillization.

Another drill target on the Ortiga property is the Silicified zone, which, as its name suggests, exhibits structurally controlled silicification over an area measuring 12.-by-1.8 km. In addition, an east-westerly trending brecciated fault zone cuts across the prospect.

Elsewhere in northwestern Argentina, IMA Exploration (IMR-V) is planning to delineate drill targets in the area known as Valle del Cura.

According to a financing-option agreement with Barrick, IMA will spend $1.25 million exploring Valle del Cura region over the next year. Barrick is providing $1.5 million in financing and has the option to select one of two properties: Rio de las Taguas or Portrerillos. The former borders Pascua-Lama to the west and Homestake to the south, and is near Barrick’s existing discoveries. IMA’s reconnaissance teams have discovered widespread alteration and three breccias enriched in gold and arsenic. Potrerillos is bordered by Barrick’s ground to the north and southeast, and is near the Veladero discoveries. Prospecting has outlined a zone of silicification, as well as mineralized float from a sulphide-bearing quartz vein. To earn a half-interest in either property, Barrick must pay US$250,000 and spend US$5 million on exploration over five years. It can boost its interest to 75% by providing production financing.

Farther north, in Jujuy province, Pacific Rim Mining (PFG-T) is encouraged by results from a first phase of drilling at its San Francisco property.

The project represents a low-sulphidation-type epithermal prospect marked by highly anomalous trace-element geochemistry, as well as elevated precious and base metal values. The best hole intersected 21 metres averaging 3.3% zinc, 1.2% lead, plus 44.8 grams silver and 0.28 gram gold per tonne. The company says additional drilling is warranted.

Pacific Rim also owns 70% of the Diablillos project, in the adjacent province of Salta, with the remainder held by Barrick.

Comprising 3,600 ha, the property features a silver-gold epithermal deposit that occurs along a northeasterly striking fault. The most recent resource estimate indicates an inferred resource of 30 million tonnes grading 93 grams silver and 0.6 gram gold. If Barrick is to maintain its interest, it must spend US$4 million annually on exploration until a positive production decision is reached.

Diablillos has been inactive since October 199
8, when the major completed a 13-hole RC program on the northeastern portion of the Oculto zone, though follow-up drilling is planned for upcoming months.