Toronto-based
Intrepid has extended the zone by more than 25% to 900 metres in strike length and sampled, for the first time, an intersection between the Inca and Aztec veins.
This vein intersection is a steep rock face that has returned trenching values of 4.5 metres (true width) grading 32.2 grams gold and 245 grams silver per tonne. This area will soon be targeted by follow-up drilling.
The latest trenching on the main Aztec vein returned 21 grams gold and 174 grams silver over 4.5 metres (true width).
As well, a newly defined vein system parallel to Aztec, known as the Aztec Footwall AF vein, has returned an interval of 12.4 grams and 18.1 grams silver over 3 metres, prompting the company to declare that the system “holds promise for additional ounces to be added within the proposed confines of the open pit.”
Along with the trenching, Intrepid is carrying out drilling in the Mercado, Panzon and Kamila zones. Results are pending, and will be incorporated into a revised resource, to be followed by infill and reconnaissance drilling.
Situated in San Juan province, the Casposo was discovered in 1998 by Battle Mountain Gold (now part of Newmont Mining). Battle Mountain acquired a mining lease in 2000, then, in May 2002, transferred it to Eduardo Antonio Machuca.
In July 2002, Intrepid signed a deal with Antonio Machuca and his partners — specifically a “rental agreement with an option to purchase” a 100% interest in the property. The agreement calls for:
— option payments totalling US$300,000 over two years;
— reserve-royalty payments of US$1 per ounce of gold-equivalent, up to a maximum of US$450,000, to be paid before July 2, 2005; and
— an additional advance production royalty of US$150,000 per year due July 2006 and thereafter until such time as a total of US$450,000 is paid or the property attains commercial production.
In mid-November, Intrepid raised up to $3.2 million by privately placing 2.5 million units on a bought-deal basis and up to 2.5 million units on a best-efforts basis at 65 per unit. A unit comprises one share and half a warrant, with a each full warrant exercisable into another share within 18 months for 80.
Canaccord Capital acted as lead agent and will receive a 7% commission, as well as warrants equal to 12% of the number of units placed, plus other fees.
In September, Intrepid signed a preliminary agreement with MIM Argentina Exploraciones (the exploration arm of Xstrata Copper Americas) that allows Intrepid a 5-year, non-exclusive right to use Xstrata’s Patagonia database to explore for gold, silver, lead and zinc.
The database includes geological, geophysical, geochemical and remotely sensed data for the three Argentine provinces of Rio Negro, Chubut and Santa Cruz.
In return, Intrepid has agreed to spend US$250,000 over three years. Once that sum has been spent, Intrepid will be entitled to a 100% undivided interest in any mining or exploration tenement that is staked or acquired as a result of using the Patagonia database.
Xstrata will retain a back-in right to acquire a half-interest in any such property by paying Intrepid three times its expenditures or spending this amount on further exploration and/or feasibility studies.
This back-in can be triggered once Intrepid has defined a geological resource containing two or more million ounces of gold (or equivalent) in indicated and measured categories.
Xstrata may earn a further 15% interest by completing a bankable feasibility.
If Xstrata chooses not to back-in, the company will be granted a 1% net smelter return royalty, which can be bought by Intrepid for US$1 million.
Intrepid is exploring four other properties for precious metals: Aldea Zapote and San Cristobal in El Salvador, and Circum-Superior and Grenville in Ontario.
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