Having estabished its exploration prowess at the Golden Hills property in Mongolia,
QGX, which recently attracted the attention of
Discovered during a summer reconnaissance program, the pipe has returned upwards of 1.75% copper plus 0.11 gram gold and 220 grams silver per tonne. Also, recent geophysical surveys have outlined coincident chargeability and magnetic anomalies.
At surface, the pipe measures 50 by 30 metres, though quartz-sericite-ilmenite veins have been mapped as far was 200 metres away. An associated alteration halo in the Paleozoic-aged granitic pops out of the blanketing Quartenary cover for a strike length of 250 metres, and quartz-vein floats have been found as far as 1 km to the west.
Results from the pipe are limited to six samples, with copper varying from 0.53% to 1.75% and gold, from 0.02 to 0.11 gram. Four of the samples also yielded 51-220 grams silver.
Copper is held in malachite, azurite and wad (a hydrated oxide of manganese and copper), reflecting post-mineralizing oxidation. These, together with ilmenite, fill in vugs and fractures in the pipe’s quartz-rich matrix.
Anomalous copper was pulled from the sericite-ilmenite-altered granite, varying from 12 to 941 parts per million (ppm). Beyond the alteration halo, samples of granite carried 7-141 pmm of the red metal.
Meanwhile, a separate and stronger chargeability anomaly has been outlined 2.5 km southwest of Chuluut, and a third was detected about 3 km north of the similar but larger Erdene Tolgoi prospect. That prospect, discovered in late 2002, when the property was staked, is 5.5 km southeast of Chuluut and has returned upwards of 5.25% copper and 2.64 grams gold in sampling.
“Our ability to identify porphyry targets rapidly at Chuluut supports our initial interpretation of this area as being prospective for porphyry-style mineralization and [possibly representative of] the faulted extension of the South Gob, copper-gold belt,” says Chief Geologist Patrick Redmond. “The current drilling will not only evaluate the Chuluut prospect; [it] will also provide a better understanding of the potential within our entire Erden Tolgoi licence.”
The South Gobi region is best known for the massive Turquoise Hill deposits, where, over the past three years,
Recent drilling near the largest deposit, Hugo Dummett, intersected a high-grade core up to 350 metres to the north. The results, which include 244 metres grading 2.9% copper and 1.13 grams, are being incorporated in a resource update (T.N.M., Oct. 17/03).
Erden Tolgoi is a few hundred kilometres northeast of Turquoise Hill and covers 10,000 sq. km in all.
Golden Hills
Meanwhile, QGX is sending a reverse-circulation drill rig to its Golden Hills massive sulphide property. The rig will focus on gold-enriched oxides, while exploration of primary targets at depth continues.
Golden Hills now has a combined strike length of 2.2 km. The North, South and East zones were discovered in the summer, whereas the more-explored Central zone was found a year earlier.
Mineralization is held in massive sulphide bodies that strike east-west and dip to the north, giving the North, Central and South zones a stacked appearance and suggesting the East zone is a mineralized extension along strike. All show up well in electromagnetic surveying, particularly North, where the massive sulphides are thickest (T.N.M., Sept. 8/03).
Results are now available for eight new holes, all but one of which intersected significant mineralization. (Hole 46, which was collared in the Central zone, pulled up barren massive sulphides, namely pyrite.)
Holes 41 and 45, drilled from the same station but 125 metres north of hole 46, also targeted the Central zone. Only the former, which was the flatter of the two, yielded any values of significance, in particular 1.23% copper and 0.22 gram gold per tonne over 5 metres (starting at 135 metres) and 1.08% copper and 0.17 gram gold over 6.3 metres (starting at 168 metres).
The low grades are consistent with previous drilling results.
Farther up-hole, both intersected gold-bearing oxides in the North zone. The former averaged 4.35 grams over 15.7 metres (from 57 metres) and the latter, 1.75 grams over 8.3 metres (from 68 metres).
Collared 50 metres east and 20 metres north of 41, hole 42 also intersected both the North and Central zones. Starting at 26 metres, a 3.85-metre interval of Northern sulphides ran 0.72 gram gold and at 202 metres; a 12.95-metre interval (from 202 metres) of Southern sulphides ran 1.37 grams gold.
Third style
QGX notes that the Central interval is hosted by sulphide-bearing schist and breccia, which sit in the footwall of the massive sulphide body. Hole 40 pulled up similar material beneath the North massive sulphide lens, suggesting both reflect a third style of mineralization at Golden Hills — gold-only feeder zones.
Holes 43 and 44 were stepped out 30 and 130 metres, respectively, north of hole 40 to test the downdip projection of its massive sulphide lens. Results suggest the copper zone thickens downdip (the upper 31.5 metres ran 3.4% copper, 0.8 gram gold and 20.1 grams silver and included 11.5 metres at 6% copper, 1 gram gold and 32.9 grams silver).
In hole 43, 53 metres (from 134 metres) averaged 1.61% copper, 0.52 gram gold and 7.8 grams silver, including 28.5 metres at 2.23% copper, 0.57 gram gold and 11.6 grams silver. Results from hole 44 include 1.5 metres (from 260 metres) grading 0.66% copper, 23.3 grams gold and 29.1 grams silver, immediately followed by 62.5 metres running 1.42% copper, 0.37 gram gold and 7.9 grams silver. The deeper interval contains a sub-zone 22 metres in core-thickness and carrying 2.08% copper, 0.27 gram gold and 11.8 grams silver.
Hole 47, which was collared 100 metres west of hole 43, pulled up both oxides and massive sulphides. A 15.7-metre (from 92 metres) slice of gossanous material graded 4.35 grams gold and 30.8 grams silver, while two 7.5-metre intervals (from 100 and 115 metres) of a 76-metre section of massive sulphides carried more than 1% copper, less than half a gram gold per tonne, and a few grams of silver.
Collared on the same section but 30 metres south of hole 47, hole 48 intersected 19.25 metres (from 69 metres) of oxides grading 3.87 grams gold and 25.1 grams silver. Farther downhole (from 127 metres), 4.2 metres of a 42-metre interval of massive sulphides graded 15.25 grams gold and 22.1 grams silver.
Results from holes 47 and 48 are consistent with those of holes 40, 43 and 44; that is, a general thickening of the massive sulphide body at depth. However, they also show that the body and its mineralized portions pinch and swell along strike.
Drilling in the North zone continues.
QGX can earn an 80% interest in Golden Hills by spending US$450,000 by 2005. The remaining stake can be purchased for US$1 million.
Barrick recently bought 3 million shares of QGX at $4 apiece, giving it a 9.5% equity stake. The investment beefed up the junior’s till to the tune of $20 million.
As part of the deal, Barrick cannot sell its shares for a year and must vote them as directed by QGX management. However, the major can participate in any future financings in order to maintain its stake at the current level, and it retains a right of first refusal on any joint ventures or property sales, excluding Golden Hills, Erden Tolgoi and Uhaa Hudag.
QGX holds 93 licences in Mongolia, covering 30,000 sq. km.
At presstime, QGX’s shares were trading at $7, nearly nine times their 52-week low. The company has 28.6 million shares outstanding.
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