Waslala, Nicaragua — Using good old-fashioned prospecting, Simon Ridgway and his exploration team at newly merged
Quartz vein mineralization exposed in a series of some 40 hand-dug trenches has returned consistent multi-gram gold values over the combined 5 km of interpreted strike length on the main Pavon vein zone. Significant gold values generally fall in the 1-to-12-gram-per-tonne range over widths of 2-25 metres, and there are reports of local high-grade values of up to 58 grams across 6 metres. “It’s a sweet structure, carrying gold and running for a long way,” says Jock Slater, Radius’s vice-president of exploration.
This new discovery, wholly owned by Radius, is in the central part of the country, a 5-hour drive from the capital city of Managua and about an hour from Waslala, the nearest sizable town (population 10,000-15,000). The project is cut by the main road, and access to much of the area, a hilly agricultural region, is possible by either foot or on horseback.
El Pavon is a classic, quartz- adularia, low-sulphidation, epithermal vein system hosted by a series of felsic-to-intermediate volcanics, ignimbrites and tuffs. The initial discovery was made by Radius’s field crew in mid-2003 while investigating an old report of quartz float in the area. “The guys found quartz float in a creek and followed it up,” says Ralph Rushton, vice-president of corporate development. As part of the reconnaissance work, prospecting crews are panning the rivers and creeks for signs of gold mineralization.
Outcrop in the Pavon area is “extremely poor,” and trenching or pitting through extensive soil cover was used to locate the source of the quartz float and trace the quartz veins. Initially, around a dozen or so trenches were dug by hand and chip-sampled. Trench 2, excavated on the southern end of the Pavon Central vein, returned the best result: 8.4 metres of 21.7 grams, including 34.7 grams across 4.9 metres. The significance of the discovery is illustrated by an early trench on the Pavon North vein, which yielded 16 metres of 7.1 grams, including 12.1 grams across 8 metres, some 3.3 km north of the discovery area.
“I’m amazed that, given Nicaragua’s mining history, we can find a vein like this that has never been explored,” says Radius President Simon Ridgway. Several old adits in the discovery area provide evidence of limited historic exploration. Trench 17 cut across a 10-metre-deep adit and returned 5.4 metres of 4.6 grams, including 9.5 grams across 1.7 metres.
At the northern end of Pavon Central, 800 metres northwest of the discovery trench, the vein outcrops along the main road. “We didn’t realize it at first, but when we started cleaning off the road bank, we found a lot of vein float material,” says Rushton. The road cut returned 9.8 metres of 9.1 grams, including 17.4 grams across 3.6 metres in rubbley, low-sulphidation, epithermal banded material.
As part of the ongoing exploration at El Pavon, Radius re-sampled several of the original trenches earlier this summer, using a rock-saw to take continuous channel samples across the veins. Most of the check sampling is generally comparable to the original chip sampling. Duplicate sampling from Pavon North exhibited results that are consistently 10-30% higher than the first-pass chip sampling, whereas results from Pavon Central are mixed.
Rock-saw check sampling nearly doubled the average grade in the discovery trench to 40.7 grams over 8.4 metres.
Highly encouraged by the initial trenching results, Radius applied for a number of mineral concessions covering what it believed to be the major controlling structures in the area. This subsequently took more than seven months, but by mid-March 2004, the Ministry for Promotion of Industry and Commerce granted three key concessions totalling 914 sq. km around the Pavon discovery.
Mining law
In 2001, Nicaragua adopted a new mining law, which Radius says rectifies some of the more negative aspects of the previous mining code and integrates some of the more modern basic points from other Latin American countries. A new concessions system was established, based on the concept of only a single concession for all mining activities including exploration and exploitation. This differs from the old mining code, according to which exploration and exploitation rights were granted under separate concessions. There is no formal limit to the amount of ground one company can hold; however, each concession is subject to surface land payments or taxes, payable in advance every six months.
Radius holds more than 10,000 sq. km of granted or under-application mineral concessions in Nicaragua, following a recent merger with sister company PilaGold. The new Radius, with 50.6 million shares outstanding (or 62.1 million on a fully diluted basis), has roughly $20 million in cash and an extensive portfolio of projects in Guatemala.
During the past year, the company has shifted its exploration emphasis from Guatemala to Nicaragua. “We’re getting a bigger bang for the buck [as a result],” explained Ridgway. “We’ve been exploring in Central America since 1993 and have found more [prospects] in Nicaragua in the past six months.”
Brent Cook, a consulting geologist, concurs: “Nicaragua is the place to be; geologically everything is happening and it seems as if no one has been here.”
In the mid-to-late 1990s, a number of mining companies were active in Nicaragua, including Greenstone Resources, Triton Mining, and WMC of Australia, which was exploring a large regional package in a joint venture with Delgratia Mining. “In the last gold cycle, there was not a square inch of Nicaragua that was open for staking,” says Ridgway. WMC alone had 40% of the country under application.
New anomolies
Radius has since acquired WMC’s extensive sampling database. “It’s something like 25,000 samples, and consists of reconnaissance stream sediments and rock grabs — the result of three years and $7 million worth of work,” says Rushton. “We are now starting to chase up anomalies we are detecting from these data. We expect, in the next six months, to be adding anywhere from three to four projects to our portfolio in Nicaragua.
“We have an extremely experienced team working in what we believe is an under-explored, highly prospective regio. For us, Nicaragua is a golden opportunity.”
Since making the Pavon discovery, the company’s geologists have identified at least half a dozen major veins or quartz float trends in an area covering at least 10 by 4 km, all of which suggests that the company has uncovered a potential new gold camp. “We are picking up additional veins there all the time,” says Rushton.
Most of the work to date has focused on the poorly exposed, northwest-striking (160*) Pavon North and Central veins, which exhibit classic characteristics of a low-sulphidation epithermal style of gold deposit. Recent reconnaissance trenching on two other vein systems, Astrid and Brisas, yielded 9 metres grading 9 grams gold and 6 metres grading 6.2 grams gold, respectively.
Pavon North can be walked for 1,200-1,300 metres along a ridge top. Toward its southern end, the vein splits and branches off to the southeast. This 120-oriented splay can be traced for more than 500 metres, where it has yielded select trench values of 4.8 metres grading 8.9 grams gold. Pavon Central is at least 1 km long.
Chalcedony
According to Richard Sillitoe, a renowned expert on epithermal gold systems, the Pavon North vein is dominated by chalcedony and, in part, displays crustification. Late-stage hydrothermal brecciation resulting in a loose fragmental texture is evident in the highest outcropping part of the structure. In contrast, the Pavon Central vein contains abundant saccharoidal quartz and chalcedony, suggesting that the erosion level may be somewhat deeper. Both veins are characterized by colloform kaolinite after adularia, as well as extremely low total sulphide, base metal and silver contents. The gold values corre
late with low levels of arsenic. Manganese oxides after manganese-bearing carbonate appear to be more abundant at Pavon Central than North.
Illite is the main alteration mineral in and proximal to the veins, though a lesser amount of smectite at Pavon North also suggests a shallower-level, lower-temperature position. Based on the quartz texture, clay and alteration mineralogy, along with the geological features observed at Pavon that suggest shallow erosion, Radius believes it is close to the top of the system, giving appreciable potential at depth. “We are seeing low-temperature clays; all the quartz textures are telling us we are high up in the system,” says Rushton, “and we have excellent depth potential.”
Radius has spent the rainy summer season carrying out regional prospecting and mapping in preparation for a 10,000-to-20,000-metre drilling campaign. “It is an extremely large system and we have many kilometres of vein,” says Rushton. “Testing this thing is going to be a long process.”
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