Drilling is intensifying at the Veladero gold-silver property, which represents the crown jewel in
The project is 390 km northwest of the capital city of San Juan in the western province of the same name. In total, the Vancouver-based junior holds more than 560,000 ha of prospective ground in Argentina.
As The Northern Miner discovered on a recent swing through the region, finding the Veladero project is an adventure in its own right. After driving past the outskirts of San Juan city, one reaches a paved highway which meanders its way across a semi-arid desert towards the town of Pismanta. From there, dirt and gravel roads cut a narrow path up a mountain slope that crests at an elevation of 5,000 metres above sea level. The eternal snow-capped peaks of the Andes are everywhere in sight, as one gradually wends one’s way through a river valley toward the Veladero camp, which is set up at the base of a wind-swept escarpment. Access to the Veladero property from the camp is only 15-20 minutes by 4-wheel drive vehicle.
The Veladero lease covers about 13,000 ha in the Argentine extension of the El Indio gold belt and is a 60-40 joint venture between Argentina Gold and Barrick, respectively. The El Indio belt is dominantly composed of Tertiary-aged volcanic rock and hosts several major deposits, including the El Indio and Tambo mines.
The main target area at Veladero consists of a 4-by-4-km alteration zone coincident with a ridge named Cerro Pelado. Topographically, the dome complex is a triangular-shaped hill that is structurally bounded on all sides by fault systems.
Cerro Pelado has been interpreted as a tensional triangular zone in a geotectonic crustal thinning environment that gave way to intense explosive volcanic and intrusive activity. The Cerro Pelado ridge is host to two large diatreme systems, namely Cerro Pelado, at 44 ha, and Filo Federico, at 75 ha. The diatremes are composed of multiple-phase breccias and are structurally controlled along their margins.
Mapping and reverse-circulation drilling have identified a vertical zonation of alteration patterns in the diatremes. From the top of the dome structure down to the current limits of drilling, the following zonation patterns have been identified: residual silica (or what Argentina Gold calls “steam-heated”); opal-line silica; crystalline silica; vuggy silica; and quartz-alunite.
Gold and silver mineralization in the Filo Federico target and the NW target is associated with the phreatic breccias in the crystalline silica zone and is close to the contact with the opaline silica zone. Drilling has determined that the silver-rich zones rim the gold zones.
The Amable target is on the southeastern flank of the Cerro Pelado diatreme, about 2.5 km southeast of the Filo Federico diatreme and the NW target. It is defined by a resistivity geophysical anomaly and a coincident geochemical anomaly, both of which occur over an area measuring 800 by 300 metres. The target trends in a northwesterly direction and is on a steep scarp that descends to the east. As drilling moves towards the west (up slope), more overburden is being encountered.
Argentina Gold is currently drilling hole 89 at an elevation of 4,400 metres. The hole was collared 80 metres west of the previously reported hole 84 (126 metres averaging 2.26 grams gold and 22.77 grams silver per tonne). Hole 89 is designed to test the extension of mineralization in the quartz-alunite zone seen in hole 84.
The geophysical model indicates that resistive zones grade into semi-conductive zones. This has been interpreted to mean that strong silicification grades into quartz-alunite and then into a sulphide feeder system. To date, only holes 81 and 83 showed signs of sulphides.
Originally, the company thought silicification and mineralization went hand in hand, but holes 80, 84 and 85 have changed their perspective. Good gold and silver grades were encountered in quartz-alunite alteration below the silicified horizon.
“We think the Amable target represents a trans-tensional zone system between two major northwest-trending fault systems,” said Ricardo Martinez, exploration manager for Argentina Gold. He went on to say that the next step will be to drill-test eastern and western boundaries of the Amable target to determine if mineralization occurs outside of the defined geophysical anomaly.
So far, two controls of mineralization have been postulated: a structurally controlled trans-tensional system that might possibly repeat itself northwest of Amable; and a more ubiquitous, paleophreatic-induced mineralization.
The paleophreatic model suggests that gold-bearing fluids from a magmatic source encountered the paleo-water table near the surface and precipitated the gold as a result of changes in temperature and pH (measure of hydrogen ion concentration).
Since mineralization is encountered at basically the same elevation (4,300 metres above sea level) at both Amable and Filo Federico, future drilling will determine if the paleophreatic-induced mineralization extends between the two targets.
“There is no basic geological difference between what we drilled last year and what we are drilling now,” said Ricardo Martinez. “It’s all part of the same large system.”
Diamond drilling is scheduled to begin in the first week of December in an attempt to confirm grades at past drill sites and help refine the geologic model. A reverse-circulation rig will eventually be added to the program. The company has budgeted US$4.2 million this season for a drill program that is expected to span 10,000 metres, more than half of which will focus on Amable.
Preliminary metallurgical results from hole 76, the first hole drilled into the Amable target, returned recovery values of 76.4% gold and 11.9% silver from minus-30 mesh material which was leached for a 48-hour period. Many more tests must be carried out before definitive values can be reported.
According to J.P. Jones, president of Argentina Gold: “The silver would be treated on a completely different recovery system — something like La Coipa, where silver is in a different circuit.” He went on to say that only about 40% of the property has been explored and that it is too early to talk about metallurgy.
The mill at the La Coipa mine in Chile, which is owned equally by Placer Dome and TVX Gold, consists of circuits for semi-autogenous grinding, crusher grinding, leaching and filtering as well as a Merrill-Crowe plant and refinery. Recoveries averaged 80.4% gold and 65% silver last year.
To date, Argentina Gold has spent US$11 million on the Veladero property. The company acquired the property in September 1994 and joint-ventured it to Lac Minerals, which was subsequently absorbed by Barrick Gold.
The first sniffs of mineralization were reported during prospecting of the Agostina Breccia pipe on the eastern flank of Cerro Pelado in March 1995. Breccia Agostina was drilled the following year and, according to company estimates, a resource containing about 126,000 oz. gold and 2.1 million oz. silver was delineated.
At this time, talus sampling had traced a large geochemical anomaly to silicified outcrops west of Breccia Agostina. Gold and silver mineralization was found associated with fault-controlled intersections and corridors. Results prompted chip sampling, trenching and a large geochemical survey over the entire dome area. The survey outlined a large arcuate anomaly measuring 3 by 2 km.
A 70-line-km geophysical survey found a link between geochemical gold and silver anomalies with high-to-intermediate resistivity feeders at depth and silicified breccias on the surface. These feeders were found to be controlled by the same fault corridors and intersecti
ons as at Breccia Agostina. Drilling began in the summer of 1996 (December through March in Argentina), and it was then that the NW target and Filo Federico were discovered. Argentina Gold considers drill hole 55 (168 metres grading 2.7 grams gold per tonne) to be the Filo Federico discovery hole.
The company outlined a resource at Filo Federico of 40.8 million tonnes grading 0.79 gram gold and 25.68 grams silver per tonne, equivalent to a contained resource of 1.04 million oz. gold and 33.7 million oz. silver. The inferred portion of the resource has been pegged at 42 million tonnes grading 0.71 gram gold and 26.59 grams silver, equivalent to a contained resource of 963,800 oz. gold and 36 million oz. silver (this resource was calculated from 15 reverse-circulation holes)
The NW Target zone, defined by 10 drill holes, has an indicated resource of 4.6 million tonnes averaging 1.47 grams gold and 20.95 grams silver, equivalent to a contained resource of 217,400 oz. gold and 3.1 million oz. silver. The inferred portion is estimated at 3.4 million tonnes grading 1.5 grams gold and 20.96 grams silver, equivalent to a contained resource of 164,200 oz. gold and 2.3 million oz. silver.
All estimates were calculated using a cutoff grade of 0.5 gram gold and included drill hole data to a depth of 300-350 metres.
Only a limited number of metallurgical tests were performed on the Filo Federico and NW Target zones. Early results produced average recoveries of 82% gold and 23% silver.
Stripping ratios are estimated to be 4.3-to-1 for Filo Federico and 1.3-to-1 for the NW Target. Mineralization remains open in all directions at Filo Federico, as well as at depth.
In May of this year, Argentina Gold drilled its last hole of the season, hole 76. It was collared on the southeastern flank of the Cerro Pelado diatreme and intersected 193 metres grading 1.49 grams gold and 55.09 grams silver. This hole represents the first hole drilled into the Amable target.
Argentina Gold has other prospective targets in its portfolio. Directly south of the Veladero property is the Rio Frio property, which comprises 65,000 ha and which is bordered, on its western limit, by Chile. Most of the prospective anomalies on this property have been identified via satellite imagery. Color anomalies, which represent alteration zones, are being prospected and sampled.
- The Rio Frio property features eight regionally coincident geophysical and geochemical anomalies: Rio Frio, Deidad, Banitos, Chezanco, Regalit, Guanaco, Zonzo and Fabina.
The property was joint-ventured last year to Australian-based Western Mining, which subsequently dropped it after having drilled 14 reverse-circulation holes, or about 3,100 metres, into the Chezanco prospect. Argentina Gold states that about 300,000 oz. gold were found in vein systems at Chezanco. The company is currently showing the property to other interested majors.
- The 10,300-ha Del Carmin property is at the southern end of the Valle del Cura volcanic region in the El Indio belt. Barrick held a 60% interest in the property and drilled 33 holes on the Cerro Amarillo prospect before dropping the property. Geologically the prospect is a silicified breccia zone with an alteration rim containing silica, alunite and pyrite. Several areas of alteration occur on the property, and Argentina Gold believes further exploration is warranted.
- The Precordillera project is in the Precordillera belt of San Juan province and covers 168,442 ha in 17 claims. Known mineralization includes copper-gold skarns and gold-silver dissemination in sedimentary environments. The project covers ground near Viceroy Resource’s Gualcamayo property.
- The Pancho Arias (a.k.a. Santa Rosa) property is 600 km northeast of the Veladero property and comprises 2,140 ha. Geologically, Pancho Arias is described as a typical porphyry copper-gold prospect with strong quartz-sericite alteration.
Mansfield Minerals (MDR-V) is the operator and stands to earn a half-interest in the property by spending US$500,000 over a 3-year period. - The wholly owned Guasapampa property, in the province of Cordoba, is host to mesothermal and epithermal gold, silver, tin and nickel mineralization associated with regional shear fracture zones in upper Tertiary-aged volcanics.
- The El Morro project is a precious metal target hosted in a large caldera measuring 4 km in diameter. Strong argillic alteration can be seen in volcanic breccias.
- The Vicuna Pampa property comprises 27,000 ha in Catamarca province. A caldera-type volcanic centre faulted by thrusting of basement rocks is a possible gold-copper porphyry prospect. Geophysical anomalies and coincident low-grade gold geochemistry have yet to be evaluated by drilling.
- The Acay property, situated in the province of Salta, is host to breccia- and skarn-associated copper-gold porphyry systems. Low-grade metamorphic and sedimentary sequences are intruded by a series of granitic and sub-volcanic intrusives. The main alteration zones are linked to fracture intersections by north-south and northwest-southeast systems.
- The Toldios property, also in Salta, is host to quartz vein systems with gold and base metals. The prospective geology consists of dacitic intrusions in Precambrian-aged sedimentary units.
- Salta is also home of the Chipas property, which is described as both epithermal gold-silver target and a breccia- and skarn-associated porphyry target. Property geology consists of low-grade metamorphic and sedimentary sequences intruded by granitic and sub-volcanic intrusives. An andesitic strato-volcano system can be found at the intersection of two large structural features.
Argentina Gold has a working capital of 4.5 million and 36.4 million shares fully diluted.
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