With two previous discoveries under their belts in Central America, the principals of
President Simon Ridgway and Vice-President Robert Wasylyshyn played major roles in the discovery of the Cerro Blanco gold prospect in Guatemala, and the San Martin gold deposit in Honduras, while managing Mar-West Resources. Their junior was acquired by
Glamis has since advanced San Martin to the stage where it hosts proven and probable reserves containing 1.1 million oz. in 39.3 million tonnes grading 0.86 gram gold per tonne at the low stripping ratio of 0.4-to-1. The company began site preparation work for construction of an open-pit mine in January, and is now in the midst of building the leach pads, ponds and process facilities.
Glamis expects to begin mining in the third quarter, with initial production planned for the fourth quarter. At full production, San Martin is forecast to produce an average of 80,000 oz. gold per year over a 10-year mine life at a cash cost of US$149 per oz. and a total cost of US$210 per oz. Capital costs are projected to total US$27 million.
After a brief stint with Glamis, Ridgway and Wasylyshyn turned their attention to managing Radius and, last summer, staked a hot springs-style gold prospect called El Salitre. The prospect was discovered by the company’s reconnaissance prospecting crew, which was basing its efforts on data culled from the exploration of Mexican geothermal hot springs. Wasylyshyn tells The Northern Miner that the crew spent four months looking at 600 to 700 different hot springs.
They identified a series of auriferous silica sinters along a 3,500-metre portion of a 30-km-long, north-southerly trending graben fault. The sinters, which are related to both recent and extinct hot-spring activity, are anomalous in gold, with values ranging up to 1 gram in both chip and grab samples.
The degree of erosion is said to be negligible, and only a few metres of sub-sinter are exposed locally. A paleo-sinter at the southern end of the trend has yielded 2.1 grams across 1 metre in veins that cut both the sinter and the altered bedrock.
Management believes the anomalous sinter may represent a leakage anomaly from an epithermal system similar to historically mined deposits and that the current hot springs may be mobilizing gold from mineralized horizons at depth.
One of the sinters is extremely auriferous, says Wasylyshyn, and has yielded consistent values of 0.25 to 0.5 gram. “It’s a booming anomaly for sinter,” he says. “It means the boiling water has carried gold right to the surface.” (Sinter is a surface precipitate of the hot springs.)
El Salitre is crossed by two paved highways. The project occurs in the Trans Mexican Volcanic Arc (TMV), an east-west band of largely basaltic rocks that cuts across central Mexico. “It’s a plate pull-apart, with a lot of extensional structures,” Wasylyshyn says. “The interesting aspect is that some of the largest historical orebodies in Mexico are located there.”
The proceeds, totalling $2.1 million, must be spent on jointly approved exploration programs at El Salitre, with Radius as the operator. Barrick can elect to spend the next $2 million to earn a 50% interest and become the operator. Barrick will then have the right to earn a further 20% by carrying Radius to a production decision and arranging the necessary financing.
Says Wasylyshyn: “Barrick likes [El Salitre] because it is simple and straightforward. There’s no complex structure: a little bit of geochemistry, maybe a little bit of geophysics, and then march a drill in and poke some holes.
“It’s an interesting discovery,” he adds. “We took an existing database in an area where nobody had ever bothered to explore and found a virgin discovery just by following hot springs. To us, a couple of hundred parts per billion in a sinter is earth-shattering. We have seen enough sinters to know that multi-gram material may lie just below the surface.”
Radius hopes to be ready to drill El Salitre in the next three to four months.
Guatemala
In December 1999, Radius acquired the right to a 100% interest in the El Tambor gold prospect in central Guatemala. In return, the company agreed to pay a subsidiary of Tombstone Explorations $300,000 in cash and 200,000 shares over three years. Radius is obliged to maintain in good standing the agreement Tombstone held with the underlying property owner, which calls for cash payments totalling US$565,000 over four years and a 2.5% net smelter return royalty.
Radius has since applied to acquire several new concessions totalling more than 2,000 sq. km. The company has zeroed in on the Motagua fault, a major crustal shear zone that cuts across central Guatemala. This zone of crustal weakness is overlapped by a repeated heat flow (epithermal) event. There is a basement Paleozoic schist rock that has been tectonically “tortured.” The company’s land package covers 190 km of the strike length of the schists.
Situated 40 km north of Guatemala City, El Tambor is accessible by paved roads. The project covers a series of low-sulphidation, epithermal gold zones hosted by highly deformed Paleozoic schists.
After several months on the project, the company’s prospecting teams identified mineralized zones along a series of east-west trends in an area measuring roughly 5 by 4 km. As prospecting continues, Radius is also picking up other zones at right angles. “We think there is a combination of structural events related to the zone of crustal weakness,” says Wasylyshyn. To date, Radius has explored nine gold-mineralized zones that were identified by widespread, limited sampling.
The property covers a metamorphic basin of Paleozoic chlorite schists and hornfels that are thought to be marine andesites of greenschist facies. “It’s an apparent greenstone-looking rock,” says Wasylyshyn. In addition, there are a couple of onlapping, or crosscutting, volcanic and intrusive events.
A series of gold occurrences has been found in association with a central 4.5-km-long band of clay and silica alteration. At the Bridge zone, chip sampling along the banks of a small river yielded 3.89 grams over 75 metres. The samples were 5-metre continuous chips. Across the river, an old railway cut returned 2.6 grams over 65 metres. Quarter-gram mineralization extends outwards and gives the zone a width of several hundred metres. The zone is masked by a younger layer of ash.
At the eastern end of the alteration trend, Radius is trenching on the Lupita anomaly, the discovery of which was based on a 2.5-gram grab sample of float taken from a creek. Follow-up work revealed some multi-gram float and outcrop. Eight samples averaged 1.65 grams. The anomalous area is 300 metres long and 40-50 metres wide.
At the same time, Radius is hand-trenching the Planto anomaly. A 2-gram sample was initially picked from a small waterfall. The average grade of a total of nine samples was 1.97 grams.
The Scandalous anomaly, along the northern trend, occupies a 2,000-by-200-metre alteration area, with several multi-gram hits associated with a zone of weak silicification. The company recently completed some initial grid soil lines across the anomaly, which is at the infancy stage.
Along a southern anomalous trend, Radius completed four hand trenches in the Spikey
zone, returning discontinuous values ranging from fractions of a gram to multi-grams. Wasylyshyn says the zone probably averages 0.5 gram across an 80-by-300-metre area.
Prospecting and sampling led to the discovery of the Valery zone, which is about 150 metres wide and 300 metres long. The few trenches that have been completed to date average 1 to 1.5 grams across 50-60 metres. “We need to go in and trench across this entire thing,” states Wasylyshyn.
A further 2 km to the east, Radius is pulling some encouraging numbers from the Sastre prospect, where several old tunnels and exploration pits have been found. A grab sample of float material taken from one of the exploration pits ran 350 grams. Sampling from a tunnel driven on a low-angle breccia yielded 14.5 grams.
Drilling at El Tambor is expected to begin in 3-4 months.
A recent $1.6-million private placement financing of 2 million units priced at 80 each has boosted Radius’s treasury to about $2 million. The company has about 7.8 million shares outstanding, or 13 million fully diluted.
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