Ongoing surface sampling at the Luicho gold project in southern Peru is revealing an extensive and consistent multi-gram mineralized system with potential for hosting a large-tonnage, bulk-minable deposit.
Over the past six months, Vancouver-based
The Luicho project centres on 10 sq. km of optioned ground in the Parincochas province, 540 km southeast of Lima, between Arequipa and Nazca. It is accessible from the Pan American Highway by six hours of gravel road to within 7 km of the project. Luicho sits atop steep and rugged terrain at an elevation of 2,700 metres.
Pacific Rim has made an initial payment of US$200,000 and can earn a 100% interest by paying an additional US$400,000 in year one, US$1 million in year two and US$24.2 million in year three. The vendor retains a sliding-scale royalty of 2.5% to 3.5% on the first 1 million oz. produced and 3% on production thereafter. Pacific Rim added to its holdings by staking an additional 60 sq. km in the immediate area.
Luicho is an adularia-sericite, low-sulphidation epithermal prospect. The target area is related to a complex series of converging right-lateral strike-slip faults that have created a broad corridor of fracturing and brecciation. The major structural feature is the north-southerly striking Luicho fault, which bounds the western side of the corridor in the south and central areas. A secondary series of northeasterly trending faults has created a broad zone of fracturing and brecciation.
“As a group, we subscribe to the philosophy that the three most important factors of epithermal gold mineralization are structure, structure and structure,” said Pacific Rim’s CEO, Thomas Shrake, who spoke on behalf of geologists David Ernst and Peter Dilles at the Cordilleran Roundup in Vancouver in late January.
Based on the structural intensity of the rock and the degree of mineralization observed from surface sampling, Pacific Rim’s geologists have subdivided the structural corridor into three zones: northeast, central and south.
So far, a total of 948 samples in the northeast area averaged 1.19 grams; 1,812 samples in the central area averaged 3.27 grams; and 602 samples in the south area averaged 1.34 grams. These are all continuous chip samples measuring 2 to 3 metres long and are often strung together to produce continuous channel composites ranging in length from 10 to more than 100 metres. Gold grades tend to be highest in the Central zone, which is interpreted to be the guts of the mineralizing system. Surface mineralization occurs over a topographic range of 350 metres and a stratigraphic interval of 50 metres.
Selected results from the three zones out outlined below:
Northeast zone
80 samples averaging 1.67 grams gold over 112 metres
33 samples averaging 1.25 grams gold over 62 metres
94 samples averaging 1.23 grams gold over 135 metres
20 samples averaging 1.42 grams gold over 38 metres
45 samples averaging 2.1 grams gold over 60 metres
Central zone
30 samples averaging 4.37 grams gold over 63 metres
17 samples averaging 2.45 grams gold over 35 metres
15 samples averaging 0.65 gram gold over 30 metres
24 samples averaging 17.25 grams gold and 26.8 grams silver over 32 metres
27 samples averaging 0.85 gram gold over 52 metres
South zone
14 samples averaging 3.65 grams gold over 26 metres
26 samples averaging 1.52 grams gold over 48 metres;
Silver is a minor credit to gold, occurring at ratios of between 5-to-1 and 10-to-1.
Regionally, the area is underlain by a thick sequence of Tertiary-age volcanics that unconformably overlie Paleozoic-to-Mesozoic terrestrial sediments. The immediate Luicho area covers a stratigraphic sequence of rocks at, or just below, the unconformity. This sequence consists of Jurassic sandstones and shales overlain by a 250-metre-thick Cretaceous quartz sandstone unit capped by a series of thin, bedded shales.
The stratigraphy in the main target area consists of local “scabs” of eroded, non-mineralized shale underlain by a 15-to-20-metre-thick sequence of black, siliceous quartz sandstone, 60-70 metres of clean quartz sandstone and upwards of 200 metres of dirty sandstone. The three sandstone units are anomalous in gold, though most of the samples collected to date have come from the clean and black sandstone units.
A number of samples have been collected in the Luicho fault, north of where the structural corridor bends to the northeast. A sinuous, 322-metre-long string of 235 samples in this northern area averaged 1.1 gram across a 50-metre width. According to Pacific Rim, this mineralization occurs in the stratigraphic sandstone package 175 metres below its upper contact. This is deeper into the sandstone section than any other sampling and suggests that the epithermal system could have a significant vertical component. Most of the sampling has been restricted to a 50-metre interval near the upper contact in the corridor.
Said Shrake: “Of course, every system has its own unique plumbing, and there are no guarantees, but, given the steep fault controls of the mineralization, we remain optimistic we will see a significant vertical component to this particular system.”
Western potential
Barbara Henderson, a spokesperson for Pacific Rim, told The Northern Miner that the area west of the Luicho fault holds some potential. “[The Luicho fault] doesn’t necessarily form the boundary of the mineralization, but it does form the boundary of the corridor as we can map it right now.”
The sampling pattern to date has been controlled by access. Pacific Rim is often limited to sampling the base of cliffs, whereas the cliff faces remain largely untested. In a mid-January market commentary, James Mustard of Haywood Securities notes that “sampling has not been grid-based; it is spaced not regularly, but mostly along a series of lines, depending largely on access and outcrop location.” Pacific Rim has hired a technical climbing team, which is currently sampling some of the steeper areas, and results will appear in the company’s next news release.
In mid-March, the company reported the balance of sampling results from 16 separate underground tunnels, which have yielded an average grade of 7.35 grams gold over a total combined length of 258 metres. The tunnels, which range from 5 to 30 metres in length, were driven some 50 years ago, probably in search of higher-grade gold mineralization. They now provide a sub-surface sampling medium to compare with the surface sampling. The tunnels are often sinuous and are not oriented systematically; moreover, there appears to be no surface enrichment. “This is no surprise to us, given the semi-arid climate and the rapid erosion rate,” said Shrake.
Consistency
Mustard, in a report from mid-March, notes that “the locations of the tunnels at various elevations provide a degree of confirmation for the consistency of grade in the third dimension, as well as suggesting that surface enrichment is perhaps limited.”
Select results from the underground sampling include:
21 metres grading 6.74 grams gold per tonne;
20 metres of 3.1 grams gold;
31 metres of 9.3 grams gold;
10 metres of 4.19 grams gold;
5 metres of 17.45 grams gold;
18 metres of 8.5 grams gold;
and 6 metres of 7.99 grams gold.
Also, 17 samples averaged 10.03 grams gold and 147.5 grams silver over 27 metres.
Bottle-roll tests and cyanide assays indicate that the mineralization is amenable to cyanidation. All surface samples have been re-assayed using cyanide, wheras ratios of the cyanide to fire assays are routinely plotted to see the variation in cyanide recoveries geographically.
A 500-kg sample was collected from
the underground tunnels for further tests, to be carried out by McLelland Labs in Reno, Nev. Initial work will include bottle-roll tests to narrow down an optimal crush size range. A second, larger bulk sample will be collected for column-leach tests.
“Our goal in initiating metallurgical testing early is to have preliminary column-leach tests completed around the same time as we receive our initial drill results,” said Shrake.
Silicification is the dominant type of hydrothermal alteration at Luicho. Detrital quartz grains in the sandstone have early-stage overgrowths of locally chalcedonic quartz, creating a competent rock. Later crosscutting fractures are filled with quartz, pyrite, gold and local clay blebs. The pyrite is largely oxidized, though some remnant sulphides are not uncommon.
Low sulphide content
Also present are propyllitic alteration of the andesite dykes and local argillization, or bleaching, of the shales.
The mineralization consists of fine-grained, free gold deposited in late crosscutting fractures, along with quartz and pyrite. Based on sulphur speciation analysis of seven composites, the sulphur content averages about 0.3%, explained Shrake, which indicates that Luicho has a low sulphide content and should be metallurgically beneficial. The gold commonly occurs between fracture-filling quartz grains, usually in open spaces and often with jarosite. Shrake stated that the gold has never been seen encapsulated and that, so far, there is no evidence of a nugget effect.
Data from a geological mapping program are being compiled. The information will be used to assist in the design of the drill pattern for a 12,000-metre reverse-circulation program, scheduled for late May. Core drilling will likely follow.
Construction of a 6.5-km access road is well under way and should be completed by late April. It will take a further 4-6 weeks to construct a road across the target area and complete the drill site pads.
“We consider Luicho to be rapidly approaching a high-impact project status, one that major gold-mining companies will focus on quickly, once drilling starts, if they have not done so to date,” states Mustard, who continues to recommend Pacific Rim as a strong speculative buy with a target price of $7.
Shrake says Pacific Rim intends to take as much technical risk out of the prospect as quickly as possible, the objective being to shorten the assessment period for any potential takeover bids.
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