QGX shut out at Shuteen, misses the mark at Golden Hills

A nine-hole drill campaign on the Shuteen copper-gold prospect in Mongolia has come up dry for QGX (QGX-T). In all, eight holes tested the Black Hills prospect, with a single hole collared on the Southwest Breccias target.

The 5-sq.-km Black Hills prospect contains at least five areas of hydrothermal alteration and mineralization characterized by gradient-array chargeability and resistivity highs. Previous drilling by Czech and Mongolian operators returned up to 0.6% copper; none of those holes tested the chargeability and resistivity anomalies.

Previous trenching by Ivanhoe Mines (IVN-T) in the Southwest Breccia area yielded anomalous copper, gold, arsenic, zinc, and molybdenum. The mineralization is hosted by hydrothermal tourmaline breccia and tourmaline-replaced andesite and volcaniclastic sedimentary rocks.

“While we are disappointed in the results from our initial drill program at Shuteen, we believe that the property continues to hold potential for significant porphyry copper-gold and epithermal-gold mineralization,” said QGX CEO David Anderson.

Anderson added that a number of prospective targets remain untested on the 220-sq.-km license, and the company is assessing continued exploration on the property.

Shuteen is centred on a large, high-sulphidation lithocap and breccia pipe complex. The property’s alteration zone is characterized by its size, intensity of leaching, secondary enrichment possibilities and a strong molybdenum geochemical signature in leached hydrothermal breccias suggesting underlying porphyry mineralization.

QGX has an 80% stake in Shuteen, with Genghis Holding Co. owing a 20% carried interest. Genghis Holding is jointly owned by Ivanhoe and Jinshan Gold Mines (JIN-V). The property is situated 120 km north-northeast of Ivanhoe’s Oyu Tolgoi project.

Golden Hills

Meanwhile, drilling on the Central Valley zone at the Golden Hills project generally failed to match the results of earlier drilling on the high-grade quartz-telluride vein zones. Grades encountered by the latest holes generally run 0.7-13.8 grams gold and 1.4-66 grams silver per tonne over widths of 1-14 metres. Two of the holes either missed their mark completely or suffered poor core recovery.

One exception was hole 118, which returned 7.5 metres (beginning 133 metres below surface) of 101.3 grams gold and 153.7 grams silver, including a 1-metre section of 684 grams gold and 1,051 grams silver.

The highest assay from earlier results was 127 grams gold and 234 grams silver over half a metre.

QGX says that most of the latest holes encountered challenging changes in the geometry of the massive-sulphide contact where the high-grade vein zones occur. Still, the company says the results confirm the down-dip continuity of the veins.

The holes represent the final batch of results from a drill program that ended in the spring.

Better drill results were seen in the overlying gold-silver-bearing oxide material, with hole 114 returning 13.5 metres of 7 grams gold and 67 grams silver, and hole 115 yielding 20.6 metres of 329.7 grams gold. The company says that the results from hole 115 are the best yet from oxide material, but are untrustworthy as they reflect only 56% core recovery.

Looking to improve on core recovery, the company sank two PQ-size (8.5-cm diameter) trial holes; recovery proved extremely poor and the program was terminated.

The Central Valley zone contains three types of mineralization: a gold-silver-bearing oxide overlying copper-gold-silver massive sulphides, and sulphide-bearing gold-silver quartz-carbonate veins.

The massive sulphides are estimated to contain a measured and indicated resource totalling 10.2 million tonnes grading 1.7% copper, 0.4 gram gold and 5.4 grams silver per tonne. Another 9.5 million tonnes running 1.3% copper, 0.3 gram gold, and 4.5 grams silver are classified as inferred resources. The estimates employ a cutoff grade of 0.8% copper.

Measured and indicated resources in the oxide (or gossan) zone are pegged at 3.1 million tonnes of 2.8 grams gold and 18.9 grams silver. Inferred resources run 1.75 million tonnes at 2.7 grams gold and 19.5 grams silver, based on a cutoff grade of 1 gram gold.

Finally, the high-grade quartz veins are estimated to contain inferred resources of 696,000 tonnes running 19.6 grams gold and 35 grams silver, based on a cutoff of 3 grams gold.

The National Instrument 43-101-compliant resource estimates were independently prepared by Denver-based Chlumsky Armbrust & Meyer. The figures are based on 109 diamond drill holes spaced 50-100 metres apart, and employ metal prices of US$430 per oz. gold, US$6.37 per oz. silver, and US$1.39 per lb. copper.

QGX owns an 80% interest in Golden Hills, and the company can buy the remaining 20% for US$1 million.