Pilagold heads to Nicaragua

An option to earn a majority interest has Pilagold (Pri-V) reassessing the historic San Ramon mining camp for its oxide potential.

Situated in south-central Nicaragua, San Ramon hosts numerous low-sulphidation epithermal quartz veins. Many were worked in the first half of the last century, some over strike lengths of 1.5 km.

Pilagold is focusing on the oxide potential of the wallrocks enclosing the veins, having obtained up to 13.6 grams per tonne over 1 to 2.5 metres of chipping. Samples were taken from each side of the veins, and a few grab samples of actual vein material and float are reported.

At La Leonesa, sampling alongside the main vein for 500 metres yielded up to 3.77 grams across 1.1 metres of footwall and up to 6.8 grams per tonne across 2 metres of hangingwall. The host rock is andesite, which is both oxidized and brecciated.

The La Leonesa vein system was mined between 1902 and 1919, over a strike length of roughly 1 km. The veins, which strike east and dip steeply to the south, have never been drill-tested or geophysically surveyed.

The Rosamond vein, about 15 km to the southeast, was mined over a strike length of 500 metres. Like La Leonesa, it strikes to the east, but its dip is to the north. Pilagold took chip samples along 150 metres of the vein’s strike, turning up 0.12-13.6 grams across 1.5-2.5 metres of footwall and 0.5-12.1 grams over 1-2 metres of hangingwall.

Also, to the west of there, two grab samples of outcropping quartz veins ran 6.67 and 10.63 grams. A second vein that is exposed by an adit some 300 metres to the north of Rosamond proper yielded up to 23.3 grams over 1 metre. Samples of wallrock enclosing the second vein returned anomalous values only. The depth extent of the Rosamond vein system remains unknown.

About 500 metres to the northeast, in the Canton area, footwall rocks enclosing the main vein failed to return any significant values. The hangingwall is topographically rugged, so sampling was impeded; however, resuls are reported for one sample — 6.07 grams.

Pilagold was able to clean and sample several old trenches in the hillside, obtaining 0.05-4.67 grams over 0.8-2.5 metres. A grab sample of vein material at the main tunnel’s entrance assayed 42.2 grams.

Also, Pilagold believes a narrower but higher-grading vein known as El Hule may represent the western extention of Canton. Samples of that vein ran up to 50 grams over half a metre, and float samples further to the west carried up to 11.7 grams, for a possible 500 metres of virtually untested strike.

The Canton vein system was mined over a strike length of 350 metres and along a vertical extent of 150 metres. Several of the veins were not worked, nor were areas in which quartz stockworking and jasperoids have been observed.

Sampling at the Cerro La Laguna area, some 500 metres east of La Leonesa’s known eastern limit yielded as much as 1.6 grams. Some samples were float material; however, all came from a ridge that encloses the vein and are likely near-source. The ridge extends for 1 km in a northeasterly direction and shows no signs of having been worked, expect for small pits and trenches. Most float samples carried grades higher than a gram.

To earn a 70% stake in the 100-sq.-km concession, Pilagold (which only recently changed its name from Pillar Resources) must pay US$350,000 and spend US$2 million on exploration over three years. The vendor retains the right to convert its working interest to a 4% net smelter return royalty, though Pilagold can buy half if it advances the property to commercial production. Trenching is to begin shortly, followed by drilling in early 2004.

Pilagold has arranged a non-brokered private placement of 3.5 million units at 90 apiece. A unit consists of a share and half a warrant, with a full warrant entitling the holder to buy a share for a year after the deal’s closing, at $1. Net proceeds are earmarked for projects in Nicaragua and Guatemala.