Although the initial results from the first-ever drilling on the Navidad silver grassroots discovery were not as spectacular as the market was anticipating, the grades would nonetheless seem to indicate potential for a large bulk-tonnage silver deposit. The property is in the Patagonia region of southern Argentina.
At Navidad Hill, the drilling of eight holes was designed to undercut a series of exposed, bonanza-grade, controlled structures that averaged 5,546 grams per tonne silver (or 162 oz. per ton), 9.8% lead and 3.8% copper in 119 selected surface chip samples. These structurally controlled zones are hosted by felsic-flow dome rocks and are intermittently exposed along the crest of Navidad Hill in a northwest-trending corridor measuring 475 metres long and 60-140 metres wide. The exposed structures, often obscured by a thin slope cover, range in thickness from 0.2 to 3.3 metres. At least 18 separate structures were mapped by IMA’s geologists over a cumulative strike length of 636 metres.
The first hole was drilled on the southeastern flank of Navidad Hill at minus 45 to a down-hole depth of 109.5 metres. With results pending for the bottom 48 metres, the upper part of the hole averaged 58.4 metres of 111.1 grams (3.2 oz.) silver, 0.22% copper and 0.06% lead from 3.05-61.45 metres down-hole. The hole intersected a narrow, discrete bonanza-grade section grading 2,678 grams (78 oz.) silver, 3.07% copper and 0.3% lead across 0.8 metre at 15.7 metres down-hole.
The second hole was spotted on the same section, 34 metres away from the first hole, and completed to a total length of 154.5 metres. Starting almost at surface, the minus 45 angle hole averaged 97.8 grams (2.9 oz.) silver, 0.15% copper and 0.06% lead across the top 48 metres, including 1.05 metres of 1,320 grams (38.5 oz.) silver, 0.82% copper and 0.28% lead at 40.4 metres down-hole.
Preliminary drill results suggest that the mineralization on Navidad Hill occurs predominantly as broad areas of stockwork and breccia, rather than as narrow bonanza-grade structures as originally thought. IMA had also previously touted another style of high-grade mineralization, interpreted as “carapace breccia,” which was mapped in limiting amounts on the southeastern flank and western end of Navidad Hill. Based on preliminary surface sampling, the malachite-bearing carapace breccia averaged 3,785 grams (110 oz.) silver, 3.7% copper and 2%lead for 50 selected chip samples.
The Navidad project comprises one individual claim, or cateo, covering 100 sq. km in the Gastre department of the north-central part of the Chubut province. The Navidad discovery occurs less than 1 km off a main gravel road in a tree-less, semi-arid part of the province, at an elevation of about 1,200 metres. The closest town is Gastre, 35 km to the northwest, which has a population of roughly 500.
The nearest railhead is 125 km to the northwest at Ingenerio Jacobacci in the province of Rio Negro, about a 2-hour drive away. From Ingenerio Jacobacci, it is another three and half hours to Bariloche, a city with multiple daily flights and a centre for tourism. The city of Esquel is a 4-hour drive to the southwest by gravel road. The Atlantic coast is a 7-hour drive away, on gravel roads. A high-voltage power line connecting a hydroelectric dam at Futaleufu to an aluminum smelter at the deep sea port of Puerto Madryn passes roughly 50 km south of the Navidad project.
In December 2002, IMA’s geologists discovered outcropping, copper-stained mineralization at Navidad Hill while conducting regional reconnaissance exploration in the Chubut area. There is no evidence that Navidad has ever been explored to any degree.
“A prospecting discovery of this type seems unthinkable in the exploration industry in this day and age, especially within a few hundred metres of a provincial highway, until the lack of mining and prospecting tradition in the Patagonia is accepted,” said consulting geologist Paul Lhotka in a technical report. “Proof of this lack of mining tradition is that posts of the fence line that passes through the central part of the outcropping high-grade mineralization had been propped up with blocks of rock containing obvious green copper oxides.”
IMA completed a grid soil sampling survey that outlined elevated levels of silver-lead-copper over the entire 6-km-long survey length, including spectacular values of up to 531 grams silver, 2.39% lead and 574 parts per million (ppm) copper from areas outside of Navidad Hill. In total, 959 samples were collected at 50-metre spacing on lines set 100 metres apart, or 50 metres apart in key areas. A strong soil anomaly measuring 1,700 by 300 metres covers the Navidad Hill and Galena Hill areas. It is defined by greater than 2 grams silver and generally greater than 100 ppm copper. Two other significant soil anomalies were outlined at Barite and Calcite Hills.
IMA’s geological team has mapped large areas of consistent, replacement-style galena matrix breccia within the elevated metal soil anomaly. At Galena Hill, 101 chip samples collected from an area of 475 by 90 metres averaged 147 grams (4.3 oz.) silver and 7.69% lead. Farther to the southeast, galena matrix breccia was identified in several zones at Barite Bill, where 67 chip samples averaged 109 grams (3.2 oz.) silver and 4.73% lead.
An induced-polarization (IP) survey over the grid area revealed a large chargeability anomaly with a surface footprint of 1.6 by 1.3 km that starts near the surface in areas of exposed mineralization and extends more than 1 km into the valley under an area completely obscured by soil cover. A more precise, time-domain pole-dipole IP survey was performed in the area, producing a slightly different-shaped anomaly that broadly correlates well with the chargeability of the gradient IP anomaly.
Gravity and magnetic surveys outlined multiple anomalies at Navidad Hill and Galena Hill, and these showed good correlation with portions of the IP anomaly.
During the first pass of drilling, IMA tested the Galena Hill target with three holes. The holes on Galena Hill were targeted in accordance with pole-dipole chargeability, says Keith Patterson, IMA’s exploration manager. He says the results clearly demonstrate that the large IP chargeability anomaly is caused by sulphide mineralization, principally galena, with silver mineralization and local pyrite.
The first hole into Galena Hill encountered sulphide breccia mineralization averaging 26 grams (0.76 oz.) silver and 1.35% lead over its entire 175-metre length. Collared at minus 45, the hole returned higher-grade sections of:
— 10.8 metres of 42.1 grams (1.2 oz.) silver and 1.16% lead from 18.6-29.4 metres down-hole;
— 6.6 metres of 55.6 grams (1.6 oz.) silver and 4.42% lead at 72.5-79.1 metres;
— 9.2 metres of 76.8 grams (2.2 oz.) silver and 5.43% lead at 86.2-95.4 metres; and
— 6.1 metres of 53.3 grams (1.6 oz.) and 3.46% lead at 101.4-107.5 metres down-hole.
The rig was then pointed in the opposite direction and collared 10 metres away at minus 45. In hole 4, 267 metres of sulphide breccia were intersected to a vertical depth of 180 metres. With assay results pending for the bottom 207 metres of the hole, the top 78.3 metres averaged 111 grams (3.2 oz.) silver and 2.54% lead, including 16.1 metres of 223 grams (6.5 oz.) silver and 3.35% lead at the bottom of this interval.
The Navidad project area has been mapped by government geologists as part of the Upper Jurassic Canadon Asfalto Formation. The mineralized area is underlain by a sequence of mainly limestone, mixed fine tuffaceous and calcareous sediments that are host to both large exposed flow domes and smaller ones within the belt. An important unit is a heterolithic breccia comprising volcanic clasts from the flow domes, as well as lesser clasts of other types, in sedimentary matrix. This breccia is transitional to a mineralized breccia of similar character in which galena is present in the matrix and less frequently as massive sulphide clasts, or veinlets accompanied in some cases by abundant barite.
Patterson says the Navidad mineralized system “is bit of a mixed bag.” Although it does not have many if any obvious analogues elsewhere in the world, he is convinced it is an epithermal system of some sort; however, it would appear to differ considerably from the standard low-sulphidation systems in the Patagonia region.
The mineralization at Navidad Hill and Galena Hill is broadly similar in that they are both breccias. “Navidad Hill is a little different in that the breccia appears to have strong structural control,” says Patterson. “It’s also different geochemically in that Navidad Hill has the highly anomalous copper, whereas Galena Hill is lead and silver.” The differences are obvious in the drill core.
Final results from the first phase of drilling are expected in early 2004, when assays from all the remaining holes have been received from the lab. IMA has 35.5 million shares outstanding, or 45.5 million fully diluted, and about $4 million in cash. The company recently retained Endeavour Financial as an advisor.
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