Project Overview

Huachi is in San Juan province in northwestern Argentina, 135km north of the city of San Juan. The copper-gold mineralization at Huachi is associated with a porphyry-epithermal system with extensive multiphase quartz-stockwork development. Despite a long history, the project was first drilled in 2006, with the discovery hole intersecting 199m grading 0.35% copper equivalent from surface. Several more drillholes were completed returning up to 353m grading 0.49% copper equivalent, but poor commodity prices ($0.90/lb copper and $450/oz gold) meant that no porphyry drilling was completed between 2007 and 2017.

Project History

Mineralization was first recorded at Huachi in Pre-Columbian times and small scale artisanal mining operations for gold were carried out in the early part of the nineteenth century and then again during the 1960's. Several international mining companies attempted to acquire tenure to the property between 1970 and 1975 without success. Limited field studies were completed by government collaborative agencies including the Germany Group of Cooperation and the Japanese International Cooperative Agency between 1979 and 1999. A total of 406 samples were taken which returned an average grade of 4.75 g/t gold.

In 2005 the Property was optioned to Cardero Resource Corp. ("Cardero"). From 2005-2007, Cardero conducted a modern systematic exploration campaign focused on the porphyry mineralization. The program consisted of systematic rock sampling, detailed property scale mapping, an IP survey, and drilling (2,552m). While Cardero viewed the results of their exploration program as positive they did not conduct any further work and allowed the option agreement to expire in 2009. In 2010 the property was optioned by Kestrel Gold Inc. ("Kestrel"). In 2011 Kestrel drilled 9 diamond drillholes for 4,088 metres and was focussed exclusively on exploration within the peripheral epithermal gold system. Drilling was successful in identifying epithermal gold mineralization but more drilling would be required to fully assess the potential.

Modern Exploration Success

Modern exploration work including drilling on the property has identified porphyry style copper-gold mineralization that is closely related to potassic alteration and is best developed around two intrusive stocks: The Canyon stock and the Oro Rico stock. Both stocks have mineralization at surface consisting of chalcopyrite, accompanied by disseminated magnetite, minor pyrite, and local sparse bornite and molybdenum. The size and shape of the mineralized stocks remains poorly defined as drilling has been limited. Additionally, a large 1,400m by 850m elongate >3% pyrite halo overlaps with zones of pervasive secondary biotite alteration and overlies the prospect suggesting significant porphyry mineralization may remain untested under cover.

The porphyry style alteration at Huachi is within probable late Miocene intermediate to felsic stocks and dykes of the Huachi intrusive complex. Alteration consists of a central potassium silicate alteration zone characterized by pervasive groundmass replacement with local secondary biotite. Additionally, there are narrow structurally controlled silicification zones within the central part of the system that are often associated with quartz-sericite-pyrite altered porphyry dykes. Early formed, pervasive secondary biotite is extensively developed within the alteration halo as well.

Historical exploration includes detailed geological and alteration mapping, surface rock sampling, geophysical induced polarization survey to the west of known mineralization as well as 20 diamond drillholes (6,640 meters). Historical drilling in 2006-2007 consisted of 11 drillholes (two abandoned) for 2,552 metres and was focused exclusively on definition of copper-gold-porphyry mineralization. Later drilling in 2011 consisted of 9 drillholes for 4,088 metres and was focussed exclusively on exploration within the peripheral epithermal gold system.

Drilling highlights include:

Drillhole From (m) To (m) Interval (m)1 Copper (%) Gold (g/t) Copper Equivalent2
06-HU-01 1 200 199.0 0.25 0.12 0.35%
incl. 15 123 108.0 0.32 0.15 0.44%
06-HU-02 2 355.1 353.1 0.35 0.185 0.49%
incl. 112 355.1 243.1 0.40 0.21 0.57%
07-HU-05 6 254.5 248.5 0.26 0.17 0.40%
incl. 126 244 118.0 0.34 0.22 0.51%
incl. 192 244 52.0 0.39 0.32 0.64%
1- True width not known.
2- Copper equivalent = Copper grade % x (0.795 x gold grade g/t), where the conversion factor of 0.795 is calculated by comparing the value of 1 tonne of copper ore (at copper prices of $2.20/lb ($4,850.16/t)) to the value of 1 tonne of gold ore (at $1,200/oz ($38.58g/t)) and assuming 100% recovery.