The Company's concessions cover MS mineralization in the past producers Naricero, San Nicolas, Refugio and Jesus Maria as well as the unexploited MS mineralization occurrences of Patrocinio, San Juan and San Rafael.
Figure 8. Cuale Area geology map. Zinco concession boundaries in blue and third part concessions in magenta.
Mineralization is fine grained, banded and structural fragmented. Dimension of the exploited bodies range in width from 1 to 10 m and length of 50 to 400 m. In 1982 Industrias Peñoles plant operated at 1,000 tonnes per day with grades of 6% zinc (Zn), 180 g/t silver (Ag), 1.8% lead (Pb), 0.3% copper (Cu) and 0.63 g/t gold (Au). Three km north of Cuale is a fault hosted 0.5 m hydrothermal pyrite-quartz vein with zinc, silver, lead, copper and gold
Previous operators had completed 12,513.8 m of surface and underground diamond drilling in 189 holes mainly in the area of known MS mineralization. From evaluation of the historic drill results combined with the Company's data 12 locations at San Juan, 12 locations at Jesus Maria/Patrocinio, six locations at Naricero/San Nicolas/Refugio and 2 locations at Grandeza were selected for drilling. SAN JUAN RC DRILLING
The San Juan zone mineralization occurs right at the contact between flow-banded, flow-dome spherulitic rhyolites and interbedded tuffs, lapilli tuffs with minor black argillite. The contact has been interpreted as a fault. There are several short adits and open cuts within a 0.3 km2 area. A high silver soil anomaly (up to 48.9 g/t) with base metals extends up to 100 m beyond the area of workings. Channel chip returned high silver (average 139.2 g/t) with anomalous gold, zinc and lead.
The Footwall rocks have disseminated pyrite. The host rocks carry elevated barium values. High grade silver was intersected in the upper part of the holes in carapace breccias with sericitic alteration and anomalous antimony. Stockwork MS mineralization is intersected lower in the holes in sericite altered rhyolite. Zinc-lead MS mineralization is generally associated with anomalous arsenic and copper. High grade silver is locally coincident with the MS mineralization. Peripheral alteration is chlorite, pyrite and silica.
Table 6; Significant San Juan RC drilling intersections.
Locally the drilling intersected anomalous tungsten suggesting the presence of scheelite and a third, separate mineralization event. JESUS MARIA/PATROCINIO RC DRILLING
The zone covers a sequence of acid lavas that are cut by the Grandeza Patrocinio fault. The host rocks have lower barium values than in the San Juan zone reflecting a difference in geological environment.
Figure. 10: Jesus Maria/Patricinio zone geology with drill hole location. Zinco concession boundaries in blue and third part concessions in magenta.
The MS mineralization is zinc-lead with low grade copper and drilling identified multiple intersections in individual holes. Trace element signature of the MS mineralization is cadmium with lesser arsenic which differs significantly from the San Juan zone. Silver mineralization is limited and of significantly lower grade than intersected in the San Juan zone.
Drilling did intersect some anomalous tungsten suggesting the presence of scheelite and the third separate mineralization event.
Table 7; Significant Jesus Maria/Patrocinio RC drilling intersections.
The 1977 drilling near the Patrocinio adit intersected high grade silver-gold in four holes (average 1,603 g/t Ag and 7.46 g/t Au with anomalous zinc and lead over 3.8 m). Average results from a deeper MS mineralization are 4.45% Zn, 1.74% Pb,with 101.8 g/t Ag over 7.7 m with anomalous gold and copper. NARICERO/SAN NICOLAS/REFUGIO RC DRILLING
The zone covers three historic operations and the zone is underlain be a sequence of volcanoclastics, pillow lava and black argillite intruded by a porphyritic intrusion and diorite along the Naricero fault. The Refugio and San Nicolas historic operations are located along a north-south splay of the fault.
Mineralization characteristics are similar to San Juan with zinc-lead MS with anomalous arsenic and copper while the high grade silver is associated with antimony. The drilling also encountered a couple of tungsten intersections.
A couple of holes intersected historic workings.
Table 8; Significant Naricero/San Nicolas/Refugio RC drilling intersections.
The zone is located on the southern part of the Grandeza Patricinio fault in a volcano-sedimentary sequence. Both holes intersected the fault with minor zinc-lead mineralization.
Table 9; Significant Grandeza RC drilling intersections.
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