Guatemala City, Guatemala — Recognizing the country’s geological potential for major discoveries,
Having first invested $2 million to acquire a 11% equity stake in
Gold Fields can earn an initial 55% interest in the Tambor, Bella Vista and Tierra Blanca properties by spending US$5 million over 3.5 years. Once vested, Gold Fields can earn a further 15% interest by completing a bankable feasibility study, should Radius elect not to contribute its share of exploration costs. The joint venture is expanding its area of interest by acquiring a large neighbouring property block, which will extend its holding over a 50-km strike length.
In the two and a half years since Radius did its first deal in Guatemala, the junior has embarked on regional prospecting and geochemical sampling programs, turning up scores of gold occurrences in different geological settings. The management of Radius has focused its attention on a major regional left-lateral transcurrent suture zone that lies between the two plate boundaries and cuts across central Guatemala. The area of interest comprises the Motagua, Polochic and Jocotan faults.
“The geology of central Guatemala is complicated,” says Stephen Maynard, a consulting geologist for Gold Fields, who spoke with The Northern Miner on site. “It’s basically a strike-slip system that originated as an oblique subduction zone, forming a series of serpentinite belts, ophiolite sequences and high-grade metamorphic complexes.”
The mineralization appears to post-date penetrative deformation and the regional prograde metamorphism.
Owing to a 36-year civil war that ended only in 1996, Guatemala is underexplored with a scant mining history. “Most Guatemalans know little about mining, unlike in Mexico where everyone has an uncle or somebody that can mine,” says Maynard. Guatemala is the northernmost country in Central America, bordered by Mexico and Belize to the north, and Honduras and El Salvador to the south.
Both Radius and Gold Fields believe the geologic environment is ripe for the formation of large-tonnage gold deposits, with lots of plumbing over large areas. Geochemical soil and rock sampling has revealed gold-arsenic anomalies stretched out over 20-25 km of cumulative strike length within the area currently covered by the joint venture. “It seems remarkable that you could have such a widespread anomaly and not find it concentrated somewhere,” says Maynard. “We’re finding not just grammage grade but, locally, multi-ounce grades.”
The principles of Radius, President Simon Ridgway and Vice-President of Exploration Robert Wasylyshyn, are part of the same team that managed Mar-West Resources when it discovered the San Martin gold deposit in central Honduras in 1997 and the Cerro Blanco gold deposit in Guatemala in May 1998.
During the first quarter of 2002, San Martin produced 31,361 oz. at a cash cost of US$86 per oz. The mine is forecast to produce more than 120,000 oz. for the year at a total cash cost of US$125 per oz. At year-end 2001, proven and probable ore reserves stood at 34.9 million tonnes grading 0.86 gram gold per tonne, equivalent to 963,000 oz. A further 355,000 oz. are contained in a measured and indicated resource of 17 million tonnes grading 0.65 gram.
Open-pit resource
Glamis’s wholly owned Cerro Blanco project lies just 4 km off the Pan American Highway in southeastern Guatemala, not far from the town of Asuncion Mita. An in-house study, completed in November 2000 and based on preliminary drilling and metallurgical testwork, concluded Cerro Blanco needed either a US$300-per-oz. gold price or more reserves to justify the US$85 million in capital expenditures. The study outlined a potentially minable open-pit resource of 1.8 million oz. gold-equivalent in 21.7 million tonnes grading 2.3 grams gold and 16 grams silver. Metallurgical testing indicates milling will be required to generate adequate recoveries. Based on a yearly production of 170,000 oz. gold at a projected cash cost of US$146 per oz., Glamis anticipates Cerro Blanco could yield an unleveraged rate of return of 14.9% using a gold price of US$300 per oz.
Last year, the company’s geologists discovered a second strong gold soil anomaly only a few kilometres from the project. Glamis has begun a drilling program at Cerro Blanco as part of the first steps in moving the project forward to the feasibility stage. A number of outlying targets around the rim of a caldera structure will be drill-tested prior to drilling a dozen or so cores into the heart of the Main zone for resource confirmation purposes and further metallurgical sampling.
El Sauzal
Pending the closure of a proposed plan of arrangement with
Meanwhile, Glamis’s development team has been participating in the El Sauzal bankable feasibility process. Results of that study will be released soon after the closing of the merger. In addition, Glamis’s San Martin mine building group has been on the ground at Marlin preparing to launch a 12-month, $3-million drilling campaign once the Francisco merger closes.
The Marlin project lies 250 km northwest of Guatemala City, near the town of Huehuetenango. Discovered by Francisco, the deposit centres on a near-surface gold-silver-mineralized system estimated to contain a resource in excess of 1 million oz.
After a brief stint with Glamis, Ridgway and Wasylyshyn turned their attention to managing Radius. In December 1999, Radius acquired the right to a 100% interest in the El Tambor project in central Guatemala, 40 km northeast of the capital city. Due diligence sampling by Radius along the banks of a small river, near an active hot-springs centre, yielded 3.89 grams gold over 75 metres. Across the river, an old railway cut returned 2.6 grams across 65 metres.
During the next year and a half, field crews of Radius blanketed a 6-by-2.5-km area of the Tambor project, collecting more than 3,700 rock chip samples, 3,100 soils and 500 silts, while completing more than 50 hand trenches. This work revealed five significant areas of gold mineralization (Sastre, Bridge, Lupita, Valery and TBS-LJR) in metamorphic schists related to brecciated and hydrothermally altered shear zones.
Largely on the back of its promising surface sampling results, which indicated the potential for a large-tonnage oxide gold resource, Radius raised more than $4 million prior to beginning a first round of drilling at Tambor last summer. Gold Fields took down 1.9 million units of Radius at $1.05 apiece. Each unit consisted of one share and a warrant exercisable at $1.25 for one year.
Wider intercepts
The first pass of some
30 widely spaced reverse-circulation and core holes on the Bridge, Sastre and Lupita zones dashed market expectations for Radius by failing to match surface values. Although the results were considered disappointing, Radius cut wider intercepts of sulphide gold mineralization in the range of 0.8-2 grams at Lupita within a carbonaceous phyllite unit in association with strong multi-stage hydrothermal quartz veining containing disseminated pyrite and arsenopyrite. Results included 1.22 grams over 136 metres, 2.1 grams over 25.9 metres and 1.91 grams across 29 metres.
An amphibolite schist hosts the mineralized Sastre and TBS-LTR prospects. The host rock appears to be in a fault relationship with a lower-grade El Tambor sequence dominated by graphitic phyllite. The Lupita prospect occurs in the contact zone between the amphibolite schists and the graphitic phyllites. Other mineralized areas pending investigation include Escondida, Valery, Spikey and J-Hill.
Mineralization is dominated by faulting related to low-angle structures. The more specific controls, in the case of Sastre, turned out to be fairly steep northeast structures that appear somehow related to an overall package of low-angle structures.
The Bridge zone is hosted partly in graphitic phyllites and partly in volcanic ashes that are probably not more than 80,000 years old. “This is a system that is going on now, with an active hot spring right there,” says Maynard, who still considers Bridge to be an interesting prospect and worthy of follow-up. Previous drilling by Radius intersected a near-surface, 36.6-metre interval of hot-spring-related mineralization averaging 0.55 gram gold in altered volcanic ash immediately overlying the carbonaceous phyllite unit, which ran 0.56 gram gold over 110 metres.
Flat-lying
Gold Fields is considering drilling the TBS-LJR prospect. The mineralization and alteration are interpreted to be in the footwall of a flat-lying structure, ranging from 5 to 15 metres thick. Carbonate alteration dominates, with relic sulphides that appear to be pyrite and arsenopyrite. Hand trenching by Gold Fields has yielded 25 metres of 2 grams, 57 metres of 0.25 gram, 29 metres of 1.3 grams, 85 metres of 0.72 gram, 51.8 metres of 2.94 grams, 40 metres of 4.41 grams, 45 metres of 2.33 grams and 22 metres of 3.12 grams. With the limited potential for 250,000 oz., Maynard says this may not be a Gold Fields target.
In early December 2001, Gold Fields assumed management of the Tambor, Bella Vista and Tierra Blanca properties after entering into an option agreement with Radius. This has given Radius the freedom to begin exploring its eastern Guatemalan holdings covering some 2,690 sq. km. A 6-man crew is identifying and following-up on several new epithermal gold-silver occurrences in a highly prospective belt of Cretaceous carbonates overlain by Tertiary volcanic rocks in a 75-by-50-km area of interest. Radius has about $2 million in its treasury.
In the meantime, Gold Fields has begun drilling the Tierra Blanca prospect. An initial eight holes totalling 1,500 metres will test for disseminated replacement-style gold mineralization hosted by solution-brecciated and strongly silicified metamorphosed limestone and calcareous siltstone, adjacent to northeast-striking high-angle faults. “The idea is that it resembles a Carlin-style system,” explained Maynard.
Situated 20 km north of Guatemala City, the Tierra Blanca project centres on a strong gold geochemical anomaly within flat-lying calcareous limestones and phyllites of the uppermost part of the Tambor Group of platform carbonates. The zone has been traced along a strong north-northeast trend by widely spaced chip sampling. The mineralization has an epithermal signature, differing from the mesothermal mineralization found at Bella Vista and Tambor.
“The overall trend [of the joint-venture properties] is characterized by a gold-arsenic geochemical signature that is concentrated on fractures and other structures,” says Maynard. Tierra Blanca is a different story, though it also contains antimony, mercury and a bit of bismuth.
Gold Fields has cut select areas of the Tierra Blanca prospect with a total of five hand-dug trenches. “The results overall have been somewhat spotty,” cautions Maynard. Trench 1 yielded better intervals of 13 grams gold across 2.7 metres plus 9.1 grams over 3.2 metres. Highlights from trench 2 included nearly 3 metres of 0.9 gram, 3 metres of 1.8 grams and 3 metres 1.2 grams. The third trench returned some splashier grades, including 5.2 metres of 3.2 grams.
Gold Fields is also in the final phase of drill target definition work on the Laguna North and Laguna South prospects at the Bella Vista property, 7 km south of Tierra Blanca. “We’re talking first-round here,” says Maynard, “that is, taking our best shot and seeing what we can come up with.”
Nine targets
The Bella Vista property is underlain by foliated greenstone basalts, a black and silty package of phyllites and a group of upper phyllites, along with some partly serpentinized ultramafic rocks. Radius discovered the prospect in 2001 and completed a grid soil survey, taking 3,958 soils and more than 1,400 rock samples from a 11-sq.-km area. Based on the database, Gold Fields has identified nine anomalous targets, with an abundance of plus 300 parts per billion values in soils. One prospect, Cerro Alto, yielded a multi-ounce grab sample running 197 grams.
Mineralization at Laguna North exists in foliated greenstones, whereas Laguna South is hosted by a foliated granitoid. Another prospect, JNL, which yielded hand-trenching values of 5.42 grams across 13.9 metres and 9.72 grams across 19.9 metres, is hosted in silty phyllites.
Separate bodies
The Laguna North and Laguna South are separate bodies running in a northeasterly fashion. The soil anomaly of Laguna North measures 600 by 200-400 metres. Hand trenching has returned gold values of 2.91 grams across 14 metres, 2.57 grams over 35.2 metres, 2.74 grams over 9.9 metres and 6.16 grams across 44 metres. Several quartz vein bodies cut across Laguna North.
The Laguna South anomaly is 600 by 300 metres. The original discovery outcrop ran about 12 metres of 2.5 grams. Follow-up hand trenching yielded 28 metres of 1.84 grams. Gold Fields has returned and completed mapping and sampling, extending the original creek bed trench both to the northwest and to the south. Maynard noted some silicification and iron oxide weathering while sampling but was not especially impressed until three samples came back with values of 32, 33 and 8 grams for an average of 20 grams over 11 metres. Additional results include 29 metres of 3.4 grams, plus 18 metres of 1.4 grams.
“The picture emerging at Laguna South is that of a deeply weathered foliated granitoid containing locally high-grade gold mineralization in association with somewhat subtle zones of silicification, along with a lot of oxide material running 1 to 1.5 grams over significant widths,” says Maynard.
Radius has 17.9 million shares outstanding and trades around 55 in a 52-week range of $1.20-20.
Goldfields has budgeted C$2 million for exploration this year at the joint-venture project.
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