Northern Crown explores for treasure in Sierra Madre

Subscribing to the adage that the best place to look for gold is where it has already been found, Northern Crown Mines (VSE) is exploring the bulk-tonnage potential of the historic producing Guadalupe de Los Reyes property in northern Sinaloa state, Mexico.

A minimum 10,000-metre, reverse-circulation (RC) drill program is under way, with the objective of defining 1.5 million ounces of heap-leachable gold. The current phase of exploration, budgeted at $2.5 million, is expected to be wrapped up by July, before the start of the rainy season.

The Vancouver-based junior is led by the management team of John Brock and Wayne Roberts, and is part of a stable of exploration companies that includes American Bullion Minerals and Columbia Gold Mines.

Northern Crown Mines turned its attention exclusively to Mexico in late 1990, forming an alliance with Canadian prospector Roy Martin, who has more than 25 years of exploration experience in the country. In 1992, Northern Crown, through its wholly owned Mexican subsidiary Minera Sierra Pacifico, began acquiring ground in the Guadalupe de Los Reyes gold mining district. Today, the company holds a 59-sq.-km land package centred on 13.7 km of host structure containing five major epithermal gold-bearing zones.

The Northern Miner recently visited Guadalupe de Los Reyes, which is nestled in the western foothills of the Sierra Madre, straddling the border between the states of Sinaloa and Durango.

Good access

The project is 100 km north of the coastal city of Mazatlan and is accessible by a 30-km gravel road from the town of Cosala, which has a population of 10,000 and serves as a regional centre for goods and services.

Local topography is moderate to steep, with elevations ranging from 350 to 1,000 metres above sea level. The Rio Elota River and its tributaries flow southwesterly through the northwestern corner of the property.

Gold-silver mineralization in the region was first discovered in late 1700s.

Between 1872 and 1938, the Guadalupe de Los Reyes mine produced 260,000 oz.

gold and 15 million oz. silver from 900,000 tonnes averaging 8.8 grams gold and 521 grams silver per tonne.

It was an extensive underground, narrow-vein operation, as revealed by detailed 1935 underground maps, which were recently acquired by Northern Crown geologist Robert Wasylyshyn. The maps indicate a number of veins were worked over a strike length of 2.5 km and to a depth of 350-400 metres. He coined the term “spaghetti mining” to describe the mining pattern.

Northern Crown’s target, however, is not the high-grade quartz veins, which occur along the footwall contact, but the low-grade envelope extending above the footwall. The hangingwall holds the potential to contain significant bulk-tonnage material susceptible to open-pit, heap-leach processing. The high-grade veins will act only as sweeteners, Wasylyshyn remarked.

The Guadalupe de Los Reyes district is underlain by weakly to moderately deformed, andesitic to dacite tuffs, flows and breccias of the Upper Cretaceous to Early Tertiary lower volcanic sequence. Regional faulting displaced the package of rocks and was followed by the intrusion of rhyolitic dykes, sills and stocks from Upper Cretaceous to Middle Tertiary time.

The mountain ridges surrounding the district are capped by an upper volcanic sequence of rhyolitic to dacite ash-flow tuffs, ignimbrites and air-fall tuffs of the Oligocene to Early Miocene age.

Mineralization is contained in quartz chalcedony vein-breccia zones in andesite and rhyolite, and hosted within a large, northwesterly-trending fault structure and parallel fractures zones. The aggregate strike length of the five main zones of host structure is 13.7 km.

The gold is fine-grained and disseminated with no associated sulphides.

Higher-grade mineralization (more than 5 grams gold) is marked by chlorite alteration, giving the rock a pale green color.

$2 million expended

Prior to the current phase of exploration, Northern Crown had spent $2 million acquiring and exploring the property. The company initially focused on the Zapote zone, which was discovered in the early 1900s. An underground operation, from 1935 to 1945, on the northern part of the zone recovered 170,000 tonnes grading 12 grams gold. It was worked to a depth of 250 metres.

Underground workings have also been discovered on the southern part of the Zapote zone and the neighboring Tahonitas zone.

In the late 1980s, an attempt was made at heap leaching 31,000 tonnes grading 5.8 grams, taken from an open cut in the Zapote South zone. The “oversized” crushed material, observed during our site visit, apparently explains the operation’s 50% gold recovery.

Northern Crown has previously drilled 65 holes along the Zapote vein-structure to outline an open-pit resource estimated at 5.1 million tonnes grading 1.51 grams gold for a contained 250,000 oz. The deposit is defined over a strike length of 1 km, a depth of 100 metres and has an average thickness of 22 metres. It dips parallel to topography, meaning a favorable stripping ratio, and preliminary metallurgical testwork suggests a 70% gold recovery.

The Zapote zone remains open for expansion, particularly along its northern and southern strike extensions. The southern end of Zapote is marked by what Wasylyshyn terms a “flucture” in the structure. Subsequent, grid-controlled, geochemical, soil and rock sampling has defined an additional open-ended 1,000 metres of target zone, adjacent to Zapote, at Tahonitas.

Rock sampling on the southern end of the Tahonitas anomaly has returned values of 3 grams gold and 50 grams silver over 7.5 metres, while the northern end has yielded 2.3 grams gold and 25 grams silver over 10 metres.

Zapote North

Northern Crown has recently drilled its third hole at about the centre of the Tahonitas structure. Since then, the company has brought in a second rig, which is carrying out infill drilling on Zapote North. At least 11 holes have been completed to date.

Northern Crown hopes to prove up an additional 50,000 oz. gold in Zapote North, as well as define an additional 50,000 oz. gold by expanding the southern strike of Zapote. At Tahonitas, a minimum of 30 holes are planned.

In the Guadalupe area, geochemical sampling has defined an open-ended, 1.5-km gold anomaly overlying the historic underground workings. The anomaly varies from 50 to 80 metres in width. At the moment, the grid line is being extended and geological mapping and sampling are continuing. An initial 20 holes are planned.

Previously drilled

The Noche Buena zone was previously drilled by Northern Crown with four holes spaced along a 100-metre strike length. The holes averaged a grade of 1.41 grams gold over a thickness of 12 metres. Surface sampling at the northern end of the 1,000-metre target returned 4.4 grams gold and 83 grams silver over 11 metres, while sampling at the southern end yielded 1.16 grams gold over 33 metres. A further 10 holes are planned.

The newly acquired Mariposa claims cover an additional 1.5-km extension of the Noche Buena zone, known as the Chiripa-San Miguel zone. Follow-up ground work will determine sites for the preliminary drilling of at least six holes.

The Mariposa claims also cover an additional 2 km of structure north of the Zapote zone.

El Orito

While Northern Crown holds a 100% interest in the key and central portion of the Guadalupe de Los Reyes district, which covers the 13.7-km host structure, the company is earning a 50% interest in the surrounding 30-sq.-km El Orito area, where work is targeting a 5-km long trend in the northern sector.

Grid sampling has been completed over the southern 2 km of the Orito structure and has, to date, defined an 800-metre-long drill target. A minimum of five holes are planned.

The company plans to develop the Guadalupe project to the prefeasibility stage and find a buyer, or an experienced, well-financed operator, to take the project through to production at no further cost to Northern Crown.

Farther north, in Sonora state, the company has completed a preliminary 17-hole reverse-circulation
drill program at its Mesa Galindo project.

The exploratory drilling tested nine separate targets resulting in a 26-metre intersection grading 358 grams silver and 0.47 gram gold from the Blanca zone. Highly anomalous gold-silver values were encountered in four other zones.

The company is well-financed with $4 million in its treasury. It has 12.4 million shares outstanding, or 16 million fully diluted. Contingent on results from the current phase of exploration, Northern Crown is contemplating ongoing reserve definition drilling and preliminary feasibility through the months of August to December. A major funding of $7-10 million is expected to be carried out in the fall.