LATIN AMERICA — Eloro warms to gold potential of Guatemala

An increasingly stable political climate and positive changes to mining and tax legislation are making Guatemala a more attractive destination for Canadian junior explorers.

The country’s 36-year civil war ended in 1996, and major revisions were made to the National Mining Code in July 1997.

According to Albert Karnath, a consultant with Core Consulting Associates of Meford, Mass., the amendment of the National Mining Code demonstrates that the present government has made mineral development a high priority. In addition, the government royalty on mining projects has been reduced to 1% of gross revenues from 6%, making it one of the lowest rates in Central America.

Exploration licences are issued at an annual cost of US50cents per hectare.

Licences are initially granted for three years, and they may be renewed twice, each renewal period being two years. However, any concession, which initially can be as large as 100 sq. km, must be reduced by 50% for each renewal granted. Exploration licences are granted for 25 years and can be extended twice for an additional 25 years each time.

At least ten companies have applied for exploration licences in recent months, including Mar-West Resources (msr-v), Intrepid Minerals (iau-a) and Tombstone Explorations (tso-v) and, most notably, Eloro Resources (elor-c).

This favorable climate for mineral exploration has enabled Elora to amass, through its wholly owned subsidiary, Mayan Minerals, a portfolio of 31 exploration licences and five reconnaissance licences totalling 300,000 ha.

The company has been exploring in Guatemala since August 1996.

Reconnaissance work, including Landsat imagery, regional geological mapping and grab sampling, has focused on a set of six contiguous plots covering 30,000 ha, collectively known as the Jocotan property, situated 200 km from Guatemala City. Preliminary fieldwork conducted by Eloro’s subsidiary has resulted in strong indications that economic quantities of gold are present at Jocotan.

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Fault system

Jocotan and several other properties held by Eloro lie along the Jocatan fault and its splays, within a tertiary volcanic belt in the eastern portion of the country. The region’s geological structures are associated with the Motagua transform fault system, which marks the contact between the North American and Central American tectonic plates.

Field reconnaissance carried out by Eloro at Jocotan and nearby properties has resulted in the discovery of several gold zones, including (west to east) Soledad, Dorita, Goliath, Horcones and Breccia Mapa. These zones are described by Eloro as sharing a “highly prospective” geological setting considered favorable for large-scale epithermal mineralization.

Epithermal hot-springs activity along the Jocatan fault appears to control mineralization, much like it does at several significant gold mines and advanced-stage projects controlled by Canadian companies in Honduras, El Salvador, Costa Rica and Nicaragua.

Only 30-40 km distant from Jocotan is Greenstone Resources’ San Andres mine in Honduras, which shares the same geological belt. San Andres, which holds a resource of 2.1 million oz. gold, also shares many of Jocotan’s lithological, structural and geochemical characteristics.

Five active hot springs have reportedly been sighted between the towns of Jocotan and Camotan, all within Eloro’s concession boundaries. Hot-spring activity at San Andres and at Mar-West’s San Martin deposit in Guatemala has proven to be a strong indicator of mineralization. Mar-West recently outlined a 750,000-oz. gold reserve at San Martin; the deposit is described as a young, well-preserved, high-level epithermal hot springs occurrence.

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Pathfinder elements

Sampling at one location within Jocotan outlined a gold anomaly 300 metres wide, consisting of 171 parts per billion (ppb) gold. Within this area, one segment showed gold concentrations as high as 700 ppb, and concentrations of the precious metal “pathfinder” elements arsenic, antimony and mercury were quite high in the area, and at two other locations on the Jocotan concessions.

Based on these findings, Eloro believes the Jocotan prospect has potential to host gold mineralization amenable to bulk-mining methods.

At the Goliath prospect, an anomalous area of pathfinder elements and gold has enabled geologists to outline a mineralized zone measuring 1,000 by 500 metres and open in all directions. Mineralization here is associated with a broad zone of argillic alteration and locally silicified zones with stibnite and pyrite hosted in a brecciated felsic tuff.

The Goliath prospect lies at the intersection of a regional east-west transform fault and a north-south-oriented graben structure, the latter being an important geologic feature recognized as a control for the location of gold mineralization in Central America. Through mapping and chip sampling in this area, company geologists have outlined a low-sulphidation epithermal system. Anomalous gold occurs in broad silica-flooded conglomerates with quartz-sericite argillic alteration assemblages over a strike length of 1.6 km in an active thermal spring field. Gold values as high as 2 grams per tonne, along with strong pathfinder-element anomalies, have been obtained during preliminary work.

Current exploration at Jocotan is focusing on mapping, infill sampling and an induced-polarization (IP) survey.

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Soledad

The Soledad prospect has been traced along surface for 1,200 metres and extends 300 metres in width. The zone, which remains open, consists of a broad area of argillic alteration with localized areas of pervasive silicification and epithermal quartz veining. Some of the better surface samples assayed 1.3, 2.8 and 1 gram gold per tonne. Also associated with the zone are anomalous concentrations of mercury, arsenic and antimony.

The gold prospect known as Dorita is associated with silicified breccia. The zone can be traced on surface for 1,000 metres, is up to 200 metres wide and remains open. Samples from this zone have returned values of 6.5, 2.8 and 1.8 grams gold.

El Horno and El Cerrou, two concessions that are contiguous with Jocotan, are of interest to Eloro because significant levels of antimony have been found in preliminary sampling, strongly indicating the presence of gold. El Horno is directly south of Jocotan, whereas El Cerrou is directly east.

Two other concessions, La Pava and Sonora, lie southwest of Jocotan near the border with El Salvador, and represent a continuation of the geological trends that run north from that country.

The company’s exploration efforts in Guatemala have recently shifted to a more property-scaled program, including induced-polarization surveys, sampling, trenching and mapping. Eloro’s objective is to evaluate the exploration potential of its concessions in preparation for drill-testing in the second quarter.