Comodoro Rivadavia, Argentina —
The 4,000-metre diamond drilling program follows 3,200 metres of trenching that began in mid-October. Crews have focused on gold and silver vein targets at a handful of parallel vein systems.
San Jose comprises the Huevos Verdes and Saavedra West gold and silver zones, as well as seven early-stage targets: El Pluma West, South, Huevos Verdes East, La Sorpresa, Eastern Windows, Roadside, West Portuguese, and La Rosalia.
These prospects are associated with four parallel, northwest-trending, resistivity and chargability anomalies that appear to represent vein systems. Only 10% of the anomaly has been drilled, and so far all of the holes have confirmed the presence of the vein system as outlined by geophysics.
The four structures are known as the Pluma South-Huevos Verdes trend (with a 6 km strike length), the Pluma South-Saavedra West trend (10 km strike length), the Pluma West-Huevos Verdes East trend (7 km strike length), and the La Sorpresa-West Portuguese trend (10 km strike length).
The property is 230 km southwest of the port city of Comodoro Rivadavia (itself about 1,750 km south of Buenos Aires) and is accessible by paved road. It is 300-700 metres above sea level, and the topography is characterized by gently rolling hills with a few deeply incised valleys. The region is considered semi-desert and is only vegetated with low scrub bushes and grasses.
This past year, Minera Andes carried out sampling and mapping at four specific areas: Pluma West, La Sorpresa, Saavedra West and Huevos Verdes
Although Minera Andes holds a 100% interest in San Jose, Mauricio Hochschild & Cia, a private Peruvian company, has an option to earn a 51% stake, according to the terms of a joint-venture and operating agreement signed in 2001. To do so, Hochschild would have to spend US$3 million on exploration over three years, and well as a minimum of US$100,000 on other targets in the land package, and pay Minera Andes US$400,000 per year.
Hochschild is currently acting as operator and is preparing to drill five targets: La Sorpresa, Saavedra West, Huevos Verdes East and West and Pluma.
Geologically, the property is in a sequence of Jurassic-aged volcanic rocks that are locally covered with Cretaceous sediments, as well as younger Tertiary to Quaternary basalts.
The mineralization is hosted within the Jurassic-aged volcanics, which are exposed on the property as erosional windows through the overlying sediments and basaltic volcanics. About 60% of the property is covered by 5-50 metres of post-mineralized Cretaceous-to-Quaternary rocks.
Minera Andes says the mineralization encountered in all of the prospects represents one large hydrothermal system that is controlled by major regional structures.
The most advanced zone, Huevos Verdes, which lies near the southern end of the Pluma South-Huevos Verdes trend, consists of a system of en echelon low-sulphidation epithermal quartz veins that trend to the northwest and dip 60-75 to the northeast.
The vein system ranges from 0.3 to 14 metres in width and averages 5 metres wide. It can be traced on surface and through drill holes over a total strike length of 2.2 km. It is further sub-divided into the Huevos Verdes North and South zones. The North zone measures 1.7 km and is separated from the South zone, which measures 0.55 km, by a weakly mineralized, west-northwest-trending dialation zone. Induced-polarization surveys have traced the Huevos Verdes vein system an additional 1.8 km to the north and 0.6 km south of its current drill-tested extent.
Sulphide mineralization is low, at less than 5%, with pyrite being the dominant sulphide mineral; there are lesser amounts of argentite and arsenopyrite. At depth, the base metal content increases with the addition of galena, sphalerite and chalcopyrite. To date, drilling has traced the North vein system to a vertical depth of about 240 metres. It remains open in all directions. The strongest gold and silver mineralization is found in shoots that measure 50-150 metres along strike and can be traced from surface to about 500 metres downdip. These shoots remain open at depth. The Huevos Verdes South vein system ranges from 0.3 to 0.6 metre in width and averages 2 metres. Mineralization is similar to Huevos Verdes North, and drilling has traced the vein to a vertical depth of 200 metres. It remains open at depth, as well as to the southeast.
Earlier this year, Minera Andes hired Snowden Mining Industry Consultants to perform an independent resource estimate on the mineralization at Huevos Verdes and Saavedra West. Snowden calculated that Huevos Verdes hosts an indicated resource of 1.5 million tonnes averaging 211.8 grams silver and 2.6 grams gold per tonne. The inferred portion is pegged at 2.1 million tonnes of 251.8 grams silver and 2.8 grams gold. These calculations are based on a cutoff grade of 50 grams silver per tonne.
Several veins have been identified at Pluma South, and Minera Andes is preparing to drill-test the area, which is at the northern end of the Pluma South-Huevos Verdes trend. Drilling is also planned for the northern margin of the Pluma South-Saavedra West trend.
The Saavedra West prospect appears to be a synvolcanic graben that was infilled by pyroclastic and sedimentary rocks. Situated at the southern end of the Pluma South-Saavedra West trend, it is characterized by extensive alteration and anomalous metal values.
The prospect comprises four discrete targets: a hydrothermal breccia pipe dubbed Discovery Hill, graben bounding fault systems, high-sulphidation epithermal vein systems, and low-grade volcanoclastic disseminated gold and silver mineralization.
The gold and silver resource at Saavedra West includes a 200-metre section of epithermal quartz vein and an ovoid-shaped, 20-by-60-metre, high-grade breccia zone that is immediately adjacent to the vein.
At Saavedra West, the indicated resource stands at 382,000 tonnes grading 225 grams silver silver and 0.4 gram gold, based on a cutoff grade of 50 grams silver per tonne. Also calculated was an inferred resource of 579,000 tonnes grading 259.7 grams silver and 1.4 grams gold.
Mineralization within the breccia body consists of pyrite, galena, spahlerite, chalcopyrite and tetrahedrite and is found dominantly within the clasts of the breccia. Minera Andes believes that this breccia body was brought up from depth, and intends to drill a few deep holes under the body to test the theory.
In addition to Discovery Hill, the company will drill a vein system along the graben fault boundaries. Surface mapping and trenching have traced mineralization over a strike length of 150 metres and across widths ranging from six to 12 metres. Earlier drilling encountered gold and silver mineralization in this area, along with pyrite, sphalerite, galena, and traces of chalcopyrite. Most of the samples were anomalous in mercury, which suggests that the drills encountered the upper levels of the epithermal system. Minera Andes will step back and drill deeper holes into these structures to test for mineralization at depth.
Mapping at Pluma West has identified a quartz vein that measures up to 1 metre wide with a strike length of 500 metres. Geophysical anomalies in basalt-covered areas connect a Pluma West vein with vein outcrops at Huevos Verdes East.
Gold assays from 300 Pluma West samples ranged from nil to 40 grams gold per tonne. Silver values were generally low, ranging from nil to 154 grams silver. About 4 km on trend to the south at Huevos Verdes East, Hochschild collected 32 chip samples. Assays ranged from nil to 1,079 grams silver per tonne.
The La Sorpresa-West Portuguese trend is defined by intermittently exposed quartz veins in windows through the thin volcanic cover at the La Sorpresa prospect, as well as the Eastern Windows prospect, the Roadside prospect, and the West Portuguese prospect. This spans a distance of more than 10 km.
At La Sorpresa, the quartz vein is exposed intermittently over half a kilometre. Of the 123 samples chip samples taken in this area, gold and silver values ranged from nil to a high of 13.9 grams gold and 1,855 grams silver. A total of 12 samples contained more than 0.5 gram gold, and three samples returned high-grade gold and silver, including 13.9 grams gold plus 1,855 grams silver, 1.2 grams gold plus 1,170 grams silver, and 1 gram gold plus 759 grams silver.
Minera Andes has 43.6 million shares fully diluted and US$1.2 million in its coffers. Shares recently traded at 33.
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