Almaden, BHP Billiton kick-start JV

Junior Almaden Minerals (AMM-T) has staked two gold properties in Mexico’s southern state of Oxaca as part of a joint venture with BHP Billiton (BHP-N).

Under terms of the deal, inked a year ago, each company had to spend US$200,000 on acquiring gold-copper properties by the first anniversary. The major can now earn 51% stakes in the properties by spending US$1 million on each, after which the next US$1.5 million in expenditures is to be funded equally. The major can boost its stake in either property to 70% by completing a feasibility study and to 80% by financing development.

Described as an epithermal vein target, the Fuego property is the site of limited historic workings that have exposed at surface a 20-metre section of silicified volcanic rock characterized by banded quartz-adularia veining. The veins plunge at a shallow angle, are up to 5 metres wide, and have been traced for 1 km on surface.

Almaden took 16 grab samples of vein material or silicified wallrock. The veins ran up to 30 grams gold and 764 grams silver per tonne, and the altered volcanics returned as much as 2.4 grams gold and 953 grams silver. Some samples displayed visible gold.

Geological mapping and geochemical sampling of both rocks and soils are under way, as are geophysical surveys. Samples also have been sent out for fluid-inclusion analysis in order to determine the degree of erosion.

The Cerro Colorado property is considered prospective for high-sulphidation epithermal gold deposits. While flying overhead in a helicopter, crews noticed hydrothermal alteration patterns.

The property overlies hydrothermally altered volcanic rocks intruded by quartz-feldspar porphyries. The intrusions, which are exposed over an area of 2 sq. km, are acid-leached and oxidized. Vuggy silica textures are abundant, as is typical of highly acidic sulphide-fluid permeation, and so is argillite alteration.

Samples of outcroppings of vuggy quartz and argillite returned anomalous gold, silver, arsenic and antimony values. However, the paucity of metals is considered a reflection only on weathering.

Surface exploration, including mapping and geophysical surveys, is under way.

Almaden also has acquired an option to earn a 100% interest in the San Pablo property in Nayarit state, west-central Mexico. This brings to two the number of properties now being explored by the company in that state (the other being the Yago property).

In late 2002, Almaden sampled a prominent ridge along which were exposed outcroppings of epithermal veining. The veins are enclosed by a widespread zone of hydrothermal alteration, including a welded volcanic tuff unit that has been silicified. A series of chip samples taken across 21.8 metres of quartz-veining averaged 3 grams gold and 57 grams silver; at one end, 7.4 metres ran 7.4 grams gold and 62 grams silver.

To acquire a 100% stake, Almaden must pay US$25,000 over five years and US$75,000 in the following year. The vendors retain the right to mine the property at a rate of not more than 150 tonnes per day, though they will relinquish this right in return for a one-time payment of US$1.5 million.

Meanwhile, at Yago, Ascot Resources (AOT-V) recently bowed out after sinking six core holes in the La Sarda-San Juan vein. The vein parallels three other veins found in the northern part of the property and returned between 0.3 and 4.74 grams gold over 0.3-4.71 metres in drilling.

Each of the four veins at Yago is of the low-sulphidation, epithermal-type. They plunge to the southwest and are exposed at surface over an area of 1,500-by-1,200 metres.

Almaden notes that Ascot’s drilling extended the La Sarda-San Juan vein about 170 metres northwest of known workings. Also, an induced-polarization survey traced the vein’s signature beyond the area drilled, and subsequent prospecting about 550 metres to the northwest has led to the discovery of banded chalcedonic quartz veining.

Almaden is reviewing the data and plans to carry out fluid inclusion, petrographic and mineralogy studies on the drill core. The efforts should indicate the degree to which the holes penetrated into the hydrothermal system.

None of the holes were drilled in the southern part of the property, where similar quartz-adularia veins are known to carry gold and silver.

Ascot had the right to earn a 60% interest in Yago by issuing 300,000 treasury shares and spending US$1 million on exploration over two years.

Almaden has eight joint-venture projects under way in Mexico, including the one with BHP Billiton. The company also is exploring the Siwash gold property, in southern British Columbia and three base metal properties in the Yukon. In addition, it has a 40% stake in the ATW diamond property in the Northwest Territories, between the Diavik and Snap Lake deposits.