Mar-West eyes hot spring payoff

Asuncion Mita, Guatemala — Canadian junior Mar-West Resources (MSR-V) has made a potentially significant gold discovery at the Cerro Blanco hot spring gold prospect in southeastern Guatemala.

Based on surface evidence of underlying gold mineralization, the Vancouver-based company recently launched an initial 1,000- to 1,500-metre program of reverse-circulation (RC) drilling. The first two holes cut a wide interval of gold mineralization associated with a thick sequence of sinter and breccia diatreme.

Hole CB-1 intersected 73.2 metres averaging 0.75 gram gold per tonne, from a downhole depth of 25.9-99.1 metres. The second hole, CB-2, stepped back 35 metres and undercut the first hole to a depth of 132.6 metres, returning 111.3 metres averaging 1.48 grams between a downhole depth of 21.3 and 132.6 metres. The gold grades in hole 2 increase significantly with depth and include a 50.3-metre interval averaging 2.57 grams, from 82.3 to 132.6 metres.

Both of the holes terminated in strong gold mineralization. Mar-West says the distribution of the gold is uniform in the mineralized zones, and the average grades are not related to narrow zones of high grade.

The Cerro Blanco prospect, which lies just 4 km off the Pan-American highway near Asuncion Mita (population: 10,000), forms part of the 3,900-ha Jutiapa II concession. Jutiapa II is the first exploration licence to have been granted by the Guatemalan government since it revised the national mining law in July 1997.

The project area covers a series of low rounded hills along the western boundary of the Ipala graben fault structure. The hills are capped with a thick zone of silica-rich sinter and flanked by active hot springs along the southeastern base. The Cerro Blanco prospect rises 100 metres above the valley floor to sit at an elevation of 620 metres above sea level.

Mar-West has been active in Guatemala since early 1997. It was company president Simon Ridgway who first recognized the mineral potential of a large, underexplored Tertiary volcanic belt in the southern part of the country. The belt extends into Honduras, El Salvador and Nicaragua.

Shortly after Mar-West began a country-wide program of regional evaluation, the Guatemalan government ratified the new mining law, offering a 1% net smelter return royalty and a 30% corporate tax rate. The law also reformed regulations relating to land ownership, mineral tenure and access to land.

Despite some small-scale placer gold mining operations, which have operated intermittently since 1915 in eastern Guatemala, little gold exploration has been carried out in the country over the past 20 years. Gold-bearing quartz veins in Late Cretaceous granitic intrusions have been found at the prospect known as El Pato, 15 km west of Chiquimula in the eastern part of the country. Up to 2 million tonnes averaging 7 grams gold are estimated to constitute one section of the deposit.

During a recent tour of the Jutiapa II concession, The Northern Miner met with Robert Wasylyshyn, Mar-West’s vice-president of exploration, who explained how the Cerro Blanco prospect had been found:

“We were doing some regional evaluation in the area when we were told about the hot springs. Our geologists investigated and recognized similarities with the San Martin deposit [a near-surface, epithermal, hot spring gold deposit discovered last year by Mar-West in central Honduras, which, based on 73 drill holes, contains an estimated gold resource of 600,000 oz. in 18.5 million tonnes grading 1 gram gold]. A couple of samples were taken, returning low gold, arsenic and mercury.”

Follow-up sampling continued to indicate the presence of gold in sinter boulders, which lay scattered across the hillside.

A 40-km line grid was cut, followed by mapping, geochemical rock and soil sampling, and induced-polarization (IP) surveys. The work identified two large silicified sinter caps trending in a north-southerly direction. The two blocks are separated by some sort of break, which shifts the northern half some 500 metres to the west. There has either been post-sinter faulting, or the sinter emplacement has followed an existing fault structure.

The southern half, described as the main sinter block, trends along a strong linear feature and is exposed in the cliff face, with outcrops of up to 20 metres thick. The silicified sinter sheet extends over a length of more than 1,100 metres and a width of 450 metres.

The northern block has been less easy to interpret, as it is covered by a boulder field of sinter, with little outcrop. Hand trenching has exposed the sinter cap under as little as 1.7 metres of overburden. The northern block extends over a length of 1,000 metres, and it was in this portion that the best trench was dug by hand — on line 8700, returning 1.37 grams gold across 45 metres of highly deformed sinter.

A coinciding gold and arsenic anomaly is associated with the southern and northern blocks. The structure, measuring 2,000 by 350 metres, was defined through 1,200 grid soil samples. Rock sampling in the sinter cap has returned highly anomalous gold values, with multi-gram hits recorded in highly deformed sinter.

Wasylyshyn said he is encouraged by the appreciable amount of gold that exists at surface, especially given that, in a hot spring deposit, grades usually increase with depth away from the sinter cap.

The term “hot spring” denotes gold deposits that form at, or directly beneath, the paleo-surface. Carl Nelson, a Denver-based minerals consultant and noted authority on such deposits, describes them as “silicified breccias and vein stockworks that contain microcrystalline quartz, minor adularia, several volume percent pyrite-marcasite and native gold.”

Signs of a hot spring origin can include: silica sinter, deposited originally as amorphous silica in pools and terraces; hydrothermal eruption debris deposits that thicken and coarsen toward the vent; and geyserite, or accretionary silica that has tumbled into the throats of geysers and periodically erupted on to the surface. (Hot spring gold deposits are recognizable fossil analogues of active hot spring systems, Nelson points out.)

Last autumn, Nelson spent two days on Cerro Blanco and drew the following conclusion:

“There are few hot spring systems in Central America with such strong evidence at the surface for underlying gold mineralization. That evidence includes: an unusually thick sinter (at least 30 metres); the large areal extent of the sinter (over 2 sq. km); the inversion of opaline silica to chalcedony; the presence of crosscutting chalcedonic silica veins; and the presence of gold values in the sinter.”

Wasylyshyn estimated that there is about 15-20 million tonnes of sinter in the southern block, as well as an undetermined amount in the northern end.

The thick sinter cap has prevented Mar-West’s geologists from seeing what lies beneath, but mapping suggests the sinter overlies a quartz-pebble conglomerate. To the northeast, an intensely silicified jasperoidal limestone has been mapped, along with a siltstone unit cut by rhyolite dykes.

IP work has resulted in a strong geophysical response in the south end, Wasylyshyn said. At a resistivity of n=2, which represents a depth of 25 metres below surface, the response corresponds to the sinter, as mapped on surface, along with what appear to be three north-southerly trending linear structures.

At n=4, representing a 50-metre vertical depth, the sinter becomes smaller and appears to funnel inwards. At n=6, down to 75 metres, there appears to be evidence of rooting, possibly representing some sort of feeders along the structure. It is these vents, or conduits, that Mar-West has targeted for follow-up exploration, for it is here that the potential for higher-gold grades exists.

Grid line 7100 is especially encouraging: it is the strongest and the deepest, and could represent one of the roots of the system. The first two holes of the RC drilling were drilled to test this target. At surface, a brecciated and slightly pyritic sinter returned gold grades of up to 5.3 grams across 2 metres.

The firs
t hole was drilled to the east at an angle of minus 45 and completed to a downhole depth of 99.1 metres before shutting down as a result of drilling problems. The logging of rock chips indicates the hole cut a 50-to-60-metre (true width) sequence of interbedded fluvial sinter and sediment, with lots of veining. The hole stopped in hydrothermal mineralization.

The second hole stepped back 35 metres and undercut the first hole to a depth of 132.6 metres. The last 60 metres of the hole appear to have intersected a silicified unit with some chalcedonic veining.

The third hole was collared 300 metres to the north on grid line 7400, where geophysics suggests another root system and what Wasylyshyn describes as a “whopping silica high.” The hole cut through interbedded sinter and silicified clastic units, with veining increasing with depth, before passing into an altered clay unit near the bottom. The hole was shut down at a depth of 175 metres.

According to geologist Rudy Machorro, who is logging the drill chips, the alteration assemblage encountered is different from holes 1 and 2, but nonetheless encouraging.

Wasylyshyn said the first three holes stayed within a flat-lying fluvial package of interbedded chalcedonic sinter and silicified sediments, in a structural corridor that appears to be vertically controlled. The structural corridor, if vertical, has a minimum width of 100 metres on section 7100.

At surface, the corridor has recorded multi-gram gold hits in deformed sinter, which is marked by cross-cutting chalcedonic veins and veinlets, and hydrothermal and hydrofractured breccia dykes. Drilling has cut this same deformation package to depth.

A thin veneer of unmineralized younger rock masks the corridor on surface and makes the size of the zone difficult to determine. The veneer is 15-20 metres thick and consists of some sort of clastic rock, possibly siltstone or an eruption apron breccia.

The fourth hole of the program was collared in the northern block, 1,600 metres north of holes 1 and 2. The hole was set up on line 8700 to undercut a highly deformed sinter cap that was exposed in surface trenching and averaged 1.37 grams over 45 metres.

The hand trenching was carried out after dirt-bagging outlined a strong gold anomaly on the hillside of line 8700. Trenching revealed a

laminated-to-brecciated sinter with cross-cutting features. The deformed sinter unit is in contact with a deeply weathered and oxidized siltstone at the crest of the hill, where gold values drop off dramatically. Downhill to the west, a thickening of the overburden has limited the trenching, and the gold-enriched sinter remains open.

At the time of our visit, drilling of hole 4 had just begun. A fifth hole is being drilled in the southern block on line 7600, a 200-metre stepout north of hole 3. Mar-West intends to drill several more RC holes and then switch to diamond drilling. The core holes will allow Mar-West’s geologist to read the rock a little better. Wasylyshyn said logging the rock chips has proved frustrating: “You can’t tell the difference between chalcedony veining and sinter.”