In October 2012, the Company acquired the nearly 5,100-hectare El Jicaro Concession, which lies contiguous to the south of the San Albino-Murra Concession. Historical mining and production in this area, primarily at the El Golfo mine in the early 1900s, was ongoing while the San Albino mine was being developed. The El Golfo mineralization is on strike with that of Las Conchitas to the north. Preliminary sampling of veins indicates that they are similar in size and grade to Las Conchitas and San Albino. The Company recently received an environmental permit to conduct 100,000 metres of drilling and 20,000 metres of trenching.
Reconnaissance sampling results:
- A continuous 5.5-metre underground channel sample from the partially collapsed Tunnel #2 returned 12.33 g/t Au and 25.6 g/t Ag.
- Grab samples from the 7.5-metre-wide quartz vein in Tunnel #2 returned between 1.2 and 10.77 g/t Au.
- Two representative grab samples from a sizable mine dump returned 10.34 g/t Au and 12.8 g/t Ag, and 3.66 g/t Au and 7.2 g/t Ag.
- A representative grab sample from a sizable mine dump returned 26.53 g/t Au and 15.5 g/t Ag.
The historical El Golfo mine is the most advanced area. Until it was flooded in 1915 and rendered useless, the El Golfo stamp mill operated with stamps of 20 by 500 pounds, processing ore with a mill head grade of 21.56 g/t gold (0.63 ounce per ton). This information is historic and is not 43-101 compliant. It should not be relied on. Flooded underground workings later collapsed, ending all activities at the mine. A large portion of mineralized rock from these partially mined veins is still present.
A reported 16 gold-bearing veins were outlined by surface and underground workings, with a strike length of up to 150 metres and vein widths ranging from 5 centimetres to 4.5 metres. Mineralization is similar to that at the San Albino Gold Deposit. Some of the veins were developed by tunnels, but only a small portion of the mineralized veins was actually mined out. Mineralized pillars left in the mined-out areas would be recoverable in an open-pit mining scenario. Most of the veins are untouched.