Radius, Barrick step up drilling at El Salitre

Partners Barrick Gold (ABX-T) and Radius Explorations (RDU-V) have launched a 2,000-metre program of reverse-circulation drilling on the El Salitre property in Mexico’s Guanajuato state.

Discovered by Radius last year, the hot springs-style gold prospect hosts a series of auriferous silica sinters along a 3,500-metre portion of a 30-km-long, north-south-trending graben fault. The sinters, which are related to both recent and extinct hot-springs activity, are anomalous in gold, with values ranging up to 1 gram in both chip and grab samples.

The central, 6-km portion of the fault has been the subject of both geophysical and geochemical surveys and is believed to host the gold-mineralizing system. There is a 1.5-km overburdened gap in the middle. Radius has divided this major zone of mineralization into two distinct zones dubbed Salitre and Bart. The gap between the two zones is covered in overburden, and attempts are under way to determine whether the two mineralized zones are connected. Radius also reports that exposure to the Salitre and Bart zones terminates in heavy soil and ash cover to the north and south, which suggests that the mineralized system may possibly extend beyond the current target area.

Surface work over the past three months has included geologic mapping, the collection of 600 rock and soil samples, and a program of geophysical surveys. The data identified coincidental geophysical and geochemical anomalies associated with the structural zone over widths ranging from 100 to 350 metres. The company says the anomalous sinter may represent a leakage anomaly from an epithermal system similar to historically mined deposits and that the hot springs may be mobilizing gold from mineralized horizons at depth. The junior expects to test the zone with 8-10 holes.

Barrick is funding the program through its financing and option deal with Radius. The major subscribed to 400,000 units of Radius at $1.25 per unit for initial proceeds of $500,000. Each unit consists of one share and two piggyback share-purchase warrants — one exercisable at $1.50 for six months, and the other exercisable at $2.50 for 12 months. The warrants must be exercised to keep the agreement in good standing and will provide an additional $1.6 million in proceeds.

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 half-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.