MEXICO AND CENTRAL AMERICA — High River leads foray into Central America

Central America was the home of the Mayans, who were known for their love of gold. Spain’s conquistadors showed the same enthusiasm for the yellow metal and made the region a major source of the gold that travelled the Spanish Main. It stands to follow, then, that an effective exploration strategy in these countries is to investigate areas of historic production.

At the same time, long periods of political trouble have kept much of Central America off the path of modern-day exploration departments. As a result, many countries have not been fully explored and evaluated using modern techniques. However, the situation is improving steadily, with relative economic and political stability throughout the region attracting more and more exploration companies.

A group of companies led by High River Gold (HRG-T) is combining both approaches to mineral exploration. With Focal Resources (FCJ-A), High River is evaluating areas with known gold production, while Focal and Intrepid Minerals (IAU-A) are outlining grassroots exploration targets by means of modern-day exploration modelling.

High River Gold has kept to a strategy of taking on advanced exploration and development projects. In Central America, that meant acquiring 50% interests in properties held by Focal Resources in Nicaragua, Honduras and El Salvador.

High River has also taken a 20% equity position in Focal, so that its net interest in the joint-venture properties is now 60%.

Intrepid, formed in August through the reverse-takeover of Alberta-listed Lucro Capital, was set up as the group’s window on grassroots exploration, with High River holding a 27% interest. Under current plans, that holding will be diluted to just over 16% by equity financings.

In keeping with the two companies’ division of labor, High River has spun off the early-stage exploration properties to Intrepid, which will be exploring in joint venture with Focal on the Honduran and Salvadoran properties, and on several properties in Nicaragua.

Intrepid is concentrating its efforts on what its president, long-time consulting geologist Laurie Curtis, describes as “aggressive conceptual plays” — drawing its exploration targets from a broad tectonic-metallogenic model for the string of volcanic crust linking the two Americas.

The model suggests that, near the Pacific coast, gold deposits are mainly epithermal veins in volcanic rocks. Those in the central “spine” of volcanic ranges are often in and around subvolcanic dome or diatreme structures, which have provided both a heat source and the tectonic version of a sucker punch, intruding forcibly and creating ring fractures for fluids to circulate.

Approaching the Caribbean side of Central America to the north and east, the polymetallic skarns and replacement deposits begin to become evident.

Epithermal model

Most of the properties in El Salvador fit the epithermal model. For example, the Barrios-San Carlos concession takes in three former gold mines around a volcanic caldera complex. On this concession, the Loma de Caballo prospect has a 24-sq.-km area of hydrothermally altered volcanic rocks with gold-silver veins; old adits from the 1930s have been found to have gold grades in the range of 7 to 23 grams per tonne, with silver ranging from 170 to 350 grams. Around the veins is a stockwork with grades of 2-3 grams gold.

In northwestern El Salvador and southwestern Honduras, Intrepid has diatreme-type targets, whereas in northeastern Nicaragua, the 459-sq.-km Columbus and 790-sq.-km Rio Coco concessions have gold, silver, copper and zinc prospects around subvolcanic intrusive rocks. The nearby Bonanza property, held by Greenstone Resources (GRE-T), features polymetallic skarn occurrences as well.

High River and Focal also hold the nearby Waspuk-Wawa project, which comprises 1,440 sq. km between Rio Coco to the northeast and Greenstone’s Bonanza concession to the south. The area is a volcanic terrain with multiple subvolcanic domes intruding the volcanics. Ring structures lie along a northeast-trending corridor from southwest of Bonanza into the southeastern part of the joint venture’s concession, including the past-producing Bolivia mine.

Greenstone’s success at the Cerro Mojon deposit in central Nicaragua, which it is developing into an 88,000-oz.-per-year gold mine, has led High River and Focal to step up work at their Rio Siquia concession, immediately to the north. It is also set to acquire an interest in the Santo Domingo concession, a small (6.5-sq.-km) property held by a local co-operative.

Under their agreement with the co-op, the joint venture can earn a 75% interest in the mining lease by direct payments to the co-op, completing an exploration program, and providing a portable mill for the co-op’s use. “It’s not a bad thing to deal with the co-ops,” says Intrepid’s Curtis. “There’s some resistance at first, as if you’re taking their birthright, but they can see that part of a large operation is better for them than 100% of 5 tonnes per day.”

The program will make it possible for the co-op miners to forego mercury amalgamation as an extractive technique — a move that is expected to benefit the natural environment.

High River and Focal expect to drill targets on Santo Domingo in November, after the rainy season ends.