American Gold gains Metates

Vancouver-based American Gold Capital (AAU-V) has acquired the Metates gold-silver project in the Mexican state of Durango.

The company issued 12 million shares for the acquisition, as required under the terms of the letter agreement signed with the vendors last fall.

Metates is a large, low-grade, disseminated gold-silver project last explored by Cambior (CBJ-T) in the 1990s. It was viewed as uneconomic at that time, in part because of low metal prices but also because the mineralization was refractory and therefore not amenable to good recoveries.

The project also had high costs, owing to its rugged and remote location and the need to contain the acid-generating nature of the mineralized and waste rocks.

American Gold intends to carry out a work program aimed at enhancing the economics of the project. A key component of this work would be testing to examine alternative methods of oxidation so as to boost recoveries and lower operating costs.

Metates has a known resource, though it does not meet disclosure requirements under National Instrument 43-101.

Precious metal mineralization is associated with a quartz monzonite intrusion in a sequence of sedimentary rocks that are partially overlain by Tertiary volcanic rocks. Mineralization consists mostly of veinlets, pods and stockworks of various sulphide minerals.