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History of the Cuale VMS District


Between 1804 and 1854, La Prieta and La Prietita of the Cuale VMS district were worked intermittently by the Hernandez family. In 1854, the lawyer settling the Hernandez estate, Lic. Jesús Camarena, acquired the concessions and formed the "Union en Cuale Co." Between 1865 and 1867, Lic. Camarena built the Jesús tunnel to access a block of the La Prieta orebody 84 m high. This block was mined until the Revolution of 1879 when Lic. Camarena had to leave Mexico. The mines continued to operate until 1884, but no further development was completed. In 1884, there was an underground fire, and the lowermost workings of the La Prieta orebody were flooded. Between 1879 and 1897, production was limited to near-surface workings.

Overall, between 1854 and 1897, 109 077 tons were mined from La Prieta, La Prietita and La Lumbrera (San Juan). A total of 5,538,063 ounces of silver were recovered (Ontiveros-Escobedo, 1980). The ores were treated in several small reduction plants on the Rio Cuale, and the ruins of several of these are still in existence today.

In 1899, under the direction of Sr. Geitz, the Union en Cuale Co. was re-organized, but legal problems with other concession owners occurred, and they blew up the access tunnel in 1900. Various attempts to repair the damage failed.

Between 1918 and 1922 the Esperanza Company tried to re-open the mines, but did not reach the orebody. Srs. Hoyle and Gardner, principals of the Company, were kidnapped by the Zamora criminal gang.

In the 1930's Minas del Oro in the Grandeza area were discovered, and some small gambusino operations were active there.

In 1930 and 1931, Mayor Douglas and Richard Hunt explored the area for a syndicate bankrolled by Kennecott, Phelps Dodge and Real del Monte. However, on their return trip they were assaulted in the town of Ameca, Jalisco and they lost all of their samples.

Between 1936 and 1942, Industrias Peñoles re-opened some of the old workings in the Cuale District and drilled some short diamond drill holes to explore for the down-dip extension of La Prieta and La Prietita. The campaign was unsuccessful and they released the mining claims back to the Government.

Eagle Picher de Mexico S.A. de C.V. acquired the ground in 1950. In 1958, a total of 322.4 m in three surface diamond drill holes were drilled into or near the Socorredora orebody (Holes EP-1, 3 and 4). Specifically: (i) hole EP-1 intercepted 13.72 m of 5.3% Zn, 0.7% Pb, 0.4 g/t Au and 7 g/t Ag, (ii) hole EP-2 was aborted due to drilling problems, (iii) hole EP-3 was unsuccessful, and (iv) hole EP-4 intercepted 4.57 m of 12.9% Zn, 0.5% Pb and 29 g/t Ag. Eagle Picher also drilled 845.5 m from underground to explore for the down-dip extension of La Prieta (Holes C1 to C5). Those holes all intercepted sub-economic, disseminated pyrite and sphalerite with low silver values. Because they did not get good silver results, they abandoned the Project.

In 1965, Compañia Fresñillo, S.A., under the name of Zimapan, S.A. de C.V., acquired the Cuale District (both of these companies are subsidiaries of Industrias Peñoles). In 1972, the Servicio Geologico Mexicano completed a TURAM EM survey that detected Coloradita, Chivos de Arriba and Chivos de Abajo. In 1977, Paul J. Wojdak wrote a geological report on the Cuale district for Teck.

By 1981, 11 038 m of diamond drilling in 215 holes outlined reserves of 1 471 000 tons of ore grading 1.15 g/t Au, 169 g/t Ag, 1.27% Pb, 4.89% Zn and 0.34% copper (SGM Monograph for Jalisco). In 1981, a 20 000 ton/month mill was commissioned, and between 1981 and 1993, 2 474 355 tonnes of ore averaging 0.83 g/t Au, 103 g/t Ag, 1.03% Pb, 3.22% Zn and 0.23% Cu were produced from more than 18 ore lenses in the Cuale mining camp (Hall and Gomez Torres, 2000).

In 1986, the Servicio Geologico Mexicano completed a dipole-dipole IP survey in western and eastern areas of the Cuale VMS camp. The survey identified 12 IP anomalies, and 2000 m of follow-up diamond drilling in 14 holes were recommended (Hernandez-Perez, 1986).

Historic production figures for past producing mines on the Company's concessions in the Cuale VMS District (Hall and Gomez-Torres, 2000). Other mines, including La Prieta, La Prietita, La Coloradita, Los Chivos de Arriba, Los Chivos de Abajo and Socorredora are on the internal "La Prieta" concession, which is still owned and operated by Industrias Peñoles.

MINE TONNES Au g/t Ag g/t Pb % Zn % Cu %
GRANDEZA 756,661 1.89 22 1.41 2.35 0.20
LAS TALPAS 141,425 0.34 24 0.65 1.91 0.24
EL CALDERO 13,004 0.90 140 0.09 0.20 0.01
EL ROSARIO 473 1.25 84 0.19 0.15 0.06
SAN RAFAEL 608 0.29 255 1.10 1.32 0.16
NARICERO 782,544 0.34 157 1.05 2.85 0.06
SAN NICOLAS 79,965 0.19 121 1.57 3.18 0.13
JESUS MARIA 46,751 0.06 109 1.85 3.31 0.09
PATROCINIO 2,453 0.08 129 1.30 2.80 0.08
EL REFUGIO 34,569 0.14 156 0.89 1.95 0.10


The Company acquired the JICA-MMAJ-SGM exploration data from the SGM in 1998, shortly after staking the El Maple concession. Based on these historic results, areas of the Property were selected for detailed stream sediment and prospecting. Noranda did this work in 1999 as part of their due diligence of the El Maple Property. They elected not to do any further work, and in 2001, the Company (at that time International Croesus Ventures Corp.) signed on as a participant in the on-going VMS research program with the Mineral Deposits Research Unit of British Columbia. Post-doctorate fellow Dr. Thomas Bissig was assigned to the Cuale District. Between 2002 and 2003 he completed 1:5000 scale mapping, lithogeochemical sampling and 206Pb/238U radiometric age dating of several samples from the District. Results of MDRU's research were published in Economic Geology (Bissig et al., 2008).

One of the major conclusions of Bissig's work was that the volcanic rocks hosting the Cuale District were Late Jurassic based on radiometric 206Pb/238U age dates from zircons, not Cretaceous as had been previously supposed based on limited fossil evidence. From the base upwards, the Late Jurassic Cuale Volcanic Sequence consists of: (i) rhyolite ignimbrite, (ii) rhyolite flows and cryptodomes, (iii) black argillite with volcanogenic massive sulfide intercalated with rhyolitic volcaniclastic rocks (the ore horizon), and (iV) rhyolitic QFP dikes and cryptodomes, and (v) rather aphyric rhyolite flows and breccias that cap the sedimentary rocks of the ore horizon. These rocks grade upwards into a thick pile of marine sedimentary turbidite deposits that the author of this report suspects correlates to the Latest Jurassic-Early Cretaceous Alberca Formation.

In early 2006, the Company completed an 1859 line kilometre helicopter airborne electromagnetic, radiometric and magnetic survey to systematically evaluate its entire land package for bedrock conductors potentially related to massive sulfide mineralization.

In the second quarter of 2006, the Company started a soil geochemistry campaign to help prioritize some of the most promising geophysical and stream sediment geochemical anomalies for drill testing in 2008.

In the final quarter of 2007, and first quarter of 2008, inversion and 3-D modeling of the airborne magnetic and resistivity data by SJ Geophysics of Vancouver was completed. The interpretation implies that the Cuale District is underlain by a pipe-like magnetic anomaly (possibly an intrusion) centered below Descubriadora Mountain. This possible intrusion might represent the heat engine that circulated mineralizing fluids in the surrounding subaqueous black shale basin where the lead and zinc rich massive sulfides occur.

In early 2008, Company activities were mainly centered on permitting, field verification of selected soil geochemical and geophysical anomalies, and construction of a semi-permanent camp at Patrocinio. In April of 2008, the author of this Report completed a field review of Industrias Peñoles' "La Prieta" concession with their geologist, and received numerous documents, maps, plans and sections from Industrias Peñoles at that time.

On 29 May 2008, a reverse circulation drill rig was mobilized to Cuale, and 4751.16 m of drilling in 33 holes were completed between 3 June and 3 July, 2008. The drilling program delivered 38 mineralized intercepts of potential economic interest that occur in zones of sericite and chlorite alteration within the Cuale Volcanic Sequence. Of these, the most significant results are from San Juan: Compelling results were also returned from Jesus Maria: In 2010 some data compilation work was completed.

In 2011, the Company completed 1534.8 m of HQ diamond drilling in 14 holes. The drilling was split between San Juan (955.3 m in 9 holes) and Jesus Maria (579.5 m in 5 holes). All of the holes intercepted potentially economic intercepts of silver, gold, lead, zinc or copper (Table 11.4). Some results for San Juan are: Highlights from the 2011 drilling at Jesus Maria are: Concurrent with the drilling program, the Company completed geological inspections of the six San Antoñio concessions. After finishing the drill program, two of these were purchased from Antoñio Briseño Guerra for $100, 000 USD and 250 000 common shares of Zinco. The remaining 4 were acquired by filing the "Peregrina" application in September of 2011.


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