Discovery enhances Linear Gold’s Ixhuatan project

Early stage drilling at the Cerro La Mina target area of the Ixhuatan property in Chiapas, Mexico, is returning some encouraging results for Linear Gold (LRR-T, LGCFF-O).

The new results are from two recently completed holes that cut significant widths of precious and base metal mineralization. Cerro la Mina is a prominent hill situated some 1.4 km northeast of the Campamento deposit, where Linear has spent the last couple of years drilling off a 1.7-million-oz. gold resource.

Angled at minus 55 degrees to the southwest, hole CM5-06 intersected a near-surface 52 metres of oxidized mineralization averaging 0.8 gram gold and 5.1 grams silver per tonne starting 14 metres down-hole. Sitting below the base of oxidation is another 52.5 metres of primary sulphide mineralization grading 1.2 grams gold, 19 grams silver, 0.82% copper and 0.1% molybdenum, starting at 78 metres depth.

This latest hole was drilled 40 metres away and parallel to one of four reconnaissance holes drilled a year ago that intersected 72 metres of oxidized mineralization, starting from surface, averaging 0.9 gram gold and 2.7 grams silver. This was followed deeper down by 90 metres (starting at 114 metres depth) of primary mineralization grading 0.4 gram gold, 4.3 grams silver, 0.13% copper and 0.03% molybdenum, in hole CM2-05.

The second new hole, CM6-06 was collared 70 metres south-southwest of the 2005 hole, and turned to the south at an angle of minus 60 degrees.

The 126-metre-long hole intersected a 44-metre oxidized interval averaging 1.9 grams gold and 6.7 grams silver, plus 0.05% copper and 0.17% molybdenum starting 8 metres down-hole, followed immediately by 73.9 metres of primary mineralization grading 1.4 grams gold, 8.7 grams silver, 0.69% copper and 0.18% molybdenum.

Both of the new drill holes bottomed in mineralization. Deeper offset drilling is now under way in this new discovery area, with further results expected shortly.

The Cerro la Mina zone is defined by a broad, 750 by 450-metre, gold-in-soil anomaly on the western flank of the hill side facing Campamento. The area is marked by silicification, with local vuggy silica and strong clay alteration. The geometry of the zone is not yet known at this early stage in exploration.

Phil Pyle, Linear’s vice-president of exploration, believes the discovery of near-surface oxide gold mineralization at Cerro La Mina has the potential to add significant value to the development of the nearby Campamento deposit, which hosts measured and indicated resources of 17.6 million tonnes grading 1.8 grams gold and 7.8 grams silver, the equivalent of 1 million oz. gold and 4.4 million oz. silver at a cutoff grade of 0.5 gram gold.

The independent resource estimate for Campamento was prepared by Vancouver-based Giroux Consultants based on 94 diamond-drill holes completed between May 2004 and April 2006.

The resource estimate highlights a higher-grade core containing 609,000 oz. gold and 2.4 million oz. silver in 3.8 million tonnes grading 5 grams gold and 19.7 grams silver. Inferred resources carry an additional 703,000 oz. gold and 2.3 million oz. silver in 21.7 million tonnes averaging 1 gram gold and 3.2 grams silver.

Linear is proceeding with a scoping study on the Campamento deposit in order to determine the economic viability of the resource.

Two holes were recently completed for metallurgical testing, which is being done by Colorado-based Resource Development under the technical supervision of Pincock, Allan and Holt.

The scoping study is under the direction of Micon International of Toronto.

In addition, the company is aggressively exploring other areas of the Ixhuatan concession, aided by three drill rigs. Linear’s exploration crews have collected more than 2,000 stream-sediment, soil and rock-chip samples from the concession area.

Linear says this work has identified many new mineralized areas with elevated gold and silver values. The company has had some moderate drilling success at the Laguna Grande, Western and Caracol target areas, where new mineralized zones have been identified in the past year.

A new induced-polarization-chargeability geophysical survey is being conducted over the Caracol, Cacate, Western, Laguna Grande and Campamento systems.

The sort-term goal at Cerro La Mina is to locate oxide gold tonnage, which could serve to complement the oxide portion identified in the Campamento deposit.

“We are also pleased with the recognition of the strong disseminated sulphide mineralization below the oxide zones, which warrants additional deeper exploration in the area,” Pyle says.

Linear acquired Ixhuatan in October 2003 from Swiss mining house Xstrata (XTA-L, XSRAF-O) as part of a package of early stage exploration assets in southern Mexico and the Dominican Republic, formerly held by Australia’s MIM Holdings. Xstrata had bought out MIM earlier in 2003.

MIM was active in Chiapas for several years and was drawn to the Ixhuatan area by the presence of the past-producing Santa Fe gold-silver-copper mine. MIM believed that the Santa Fe mineralization was formed in a high-sulphidation environment and had the earmarks of a porphyry system at depth.

The 980-sq.-km Ixhuatan project is located immediately southwest of the historic producer in the northwestern part of Chiapas state. The project, easily reached by dirt road, 5 km east of Rayon, is 150 km south of Villahermosa, the state capital of Tabasco, a 2-hour drive along paved highway.

Access within the property is difficult due to the ruggedness of the terrain, which reaches a maximum elevation of 2,470 metres, but averages 1,400 to 1,600 metres above sea level.

Dense tropical vegetation, a thick soil cover, and the rugged topography, with deeply incised streams, makes travel difficult and outcrops hard to find, except along the streambeds.