A C A HOWE INTERNATIONAL LIMITED
TECHNICAL REPORT ON THE CORINA PROPERTY, SANTA CRUZ PROVINCE, ARGENTINA
for SAMCO GOLD LIMITED
by ACA HOWE INTERNATIONAL LIMITED Dr D Patrick FIMMM FAusIMM
February 28th 2014 Wingrave, UK
A C A HOWE INTERNATIONAL LIMITED
TABLE OF CONTENTS PAGE SUMMARY……………………………………………………..……………………………….…I 1. INTRODUCTION ...... 1 2. RELIANCE ON OTHER EXPERTS ...... 1 3. PROPERTY DESCRIPTION AND LOCATION ...... 1 3.1. MINERAL PROPERTY APPLICATION PROCESS IN ARGENTINA ...... 1 3.2. LOCATION OF THE CORINA AND MERCIA LICENCES ...... 2 3.3. CURRENT STATUS OF LICENCES ...... 3 3.3.1. CORINA (AND CORINA I) ...... 3 3.3.2. MERCIA ...... 6 4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 7 5. HISTORY ...... 8 5.1. GRASTA PETROLEO S.A...... 8 6. GEOLOGICAL SETTING AND MINERALISATION ...... 9 6.1. REGIONAL GEOLOGY ...... 9 6.2. REGIONAL GEOPHYSICS ...... 11 6.3. LOCAL GEOLOGY ...... 14 6.3.1. RHYOLITE DOMES ...... 18 6.3.2. GEOLOGY OF THE CERRO DE LA MINA AND CERRO CUBILETE MINERALISED AREAS ...... 18 6.4. MINERALISATION ...... 21 6.4.1. CERRO CUBILETE ...... 21 6.4.2. CERRO DE LA MINA ...... 23 6.4.3. MINERALISATION ELSEWHERE ON THE LICENCES ...... 24 7. DEPOSIT TYPES ...... 26 8. EXPLORATION ...... 27 8.1. EXPLORATION BY SAMCO ...... 30 8.2. ROCK CHIP SAMPLING ...... 30 8.2.1. CERRO CUBILETE ...... 30 8.2.2. CERRO DE LA MINA ...... 31 8.2.3. OTHER AREAS ...... 34 8.3. GROUND MAGNETIC SURVEYS ...... 43 8.4. DETAILED GEOLOGICAL MAPPING ...... 49 8.6. TRENCHING AND PITTING ...... 51 8.6.1. CERRO DE LA MINA ...... 51 8.6.2. CERRO CUBILETE ...... 51 8.6.3. MERCIA EAST ...... 52 8.7. INDUCED POLARISATION SURVEY (IP) ...... 56 8.7.1. RESULTS ...... 58 8.8. LAG SAMPLING ...... 62 8.8.1. LAG RESULTS ...... 62 9. DRILLING ...... 67 9.1. DIAMOND DRILLING AT CERRO CUBILETE ...... 67 10. SAMPLING PREPARATION, ANALYSES AND SECURITY ...... 84 10.1. ROCK CHIP SAMPLES ...... 84 10.2. LAG SAMPLES ...... 85 10.3. DRILL CORE SAMPLES ...... 85 11. DATA VERIFICATION ...... 85 12. MINERAL PROCESSING AND METALLURGICAL TESTING...... 85 13. MINERAL RESOURCE ESTIMATES ...... 85 14. MINERAL RESERVE ESTIMATES ...... 86 15. MINING METHODS ...... 86 16. RECOVERY METHODS ...... 86 17. PROJECT INFRASTRUCTURE ...... 86 18. MARKET STUDIES AND CONTRACTS ...... 86 19. ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ...... 86 20. CAPITAL AND OPERATING COSTS ...... 86
A C A HOWE INTERNATIONAL LIMITED
21. ECONOMIC ANALYSIS ...... 86 22. ADJACENT PROPERTIES ...... 87 22.1. CERRO MORO ...... 87 22.2. AUSTRALGOLD ...... 88 23. OTHER RELEVANT DATA AND INFORMATION ...... 88 24. INTERPRETATION AND CONCLUSIONS ...... 88 25. RECOMMENDATIONS ...... 90 25.1. EXPLORATION OF THE CORINA AND MERCIA LICENCES ...... 90 25.1.1. PROPOSED PROGRAMME AND BUDGET ...... 90 25.1.2. PHASE 2 DRILLING ...... 94 26. REFERENCES ...... 95 27. DATE AND SIGNATURE PAGE ...... 97
LIST OF FIGURES
FIGURE 1. REGIONAL LOCATION OF THE CORINA AND MERCIA PROJECT AREA ...... 4 FIGURE 2. LOCATION OF THE CORINA AND MERCIA LICENCES ALONG WITH EXPLORATION ZONES ...... 5 FIGURE 3. REGIONAL GEOLOGICAL SETTING OF THE DESEADO MASSIF ...... 10 FIGURE 4. REDUCED-TO-POLE REGIONAL MAGNETICS IN THE CORINA-MERCIA REGION ...... 12 FIGURE 5. POTASSIUM ANOMALISM IN THE CORINA-MERCIA REGION ...... 13 FIGURE 6. GEOLOGY OF THE CORINA LICENCE ...... 15 FIGURE 7. GEOLOGY OF THE MERCIA LICENCE ...... 17 FIGURE 8. CORINA AND MERCIA SATELLITE IMAGE INTERPRETATION BY ACA HOWE .... 29 FIGURE 9. SAMCO EXPLORATION OF THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 32 FIGURE 10. SAMCO EXPLORATION OF THE MERCIA EAST AREA ...... 33 FIGURE 11. ROCK CHIP AND FLOAT SAMPLES SHOWING AG PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 35 FIGURE 12. ROCK CHIP AND FLOAT SAMPLES SHOWING AU PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 36 FIGURE 13. ROCK CHIP AND FLOAT SAMPLES SHOWING PB PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 37 FIGURE 14. ROCK CHIP AND FLOAT SAMPLES SHOWING ZN PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 38 FIGURE 15. ROCK CHIP AND FLOAT SAMPLES SHOWING AG PPM IN THE MERCIA EAST AREA ...... 39 FIGURE 16. ROCK CHIP AND FLOAT SAMPLES SHOWING AU PPM IN THE MERCIA EAST AREA ...... 40 FIGURE 17. ROCK CHIP AND FLOAT SAMPLES SHOWING PB PPM IN THE MERCIA EAST AREA ...... 41 FIGURE 18. ROCK CHIP AND FLOAT SAMPLES SHOWING ZN PPM IN THE MERCIA EAST AREA ...... 42 FIGURE 19. TOTAL FIELD GROUND MAGNETIC SURVEY ...... 44 FIGURE 20. VERTICAL DERIVATIVE GROUND MAGNETIC SURVEY ...... 45 FIGURE 21. TILT DERIVATIVE MAGNETIC IMAGE OF THE CERRO CUBILETE AREA ...... 46 FIGURE 22. REDUCED TO POLE MAGNETIC IMAGE OF THE CERRO DE LA MINA – CERRO CUBILETE AREA ...... 47 FIGURE 23. ANALYTICAL SIGNAL PLOT ...... 48 FIGURE 24. SAMCO GEOLOGICAL MAPPING OF MERCIA EAST ...... 50 FIGURE 25. SAMCO PITTING AT CERRO DE LA MINA ...... 53 FIGURE 26. SAMCO TRENCH SAMPLING AT CERRO CUBILETE ...... 54 FIGURE 27. SAMCO TRENCH AND ROCK CHIP SAMPLING IN THE MERCIA EAST AREA SHOWING GOLD ANOMALIES ON GEOLOGY ...... 55 FIGURE 28. GRADIENT AND POLE-DIPOLE SURVEY LOCATION ...... 57 FIGURE 29. COMBINED CHARGEABILITY RESULTS FROM PHASE 1 AND PHASE 2 ...... 60 FIGURE 30. COMBINED RESISTIVITY RESULTS FROM PHASE 1 AND PHASE 2 ...... 61
A C A HOWE INTERNATIONAL LIMITED
FIGURE 31. CORINA LAG SAMPLING SHOWING SILVER ANOMALIES ON IP CHARGEABILITY INTERPRETATION ...... 63 FIGURE 32. CORINA LAG SAMPLING SHOWING GOLD ANOMALIES ON IP CHARGEABILITY INTERPRETATION ...... 64 FIGURE 33. CORINA LAG SAMPLING SHOWING LEAD ANOMALIES ON IP CHARGEABILITY INTERPRETATION ...... 65 FIGURE 34. CORINA LAG SAMPLING SHOWING ZINC ANOMALIES ON IP CHARGEABILITY INTERPRETATION ...... 66 FIGURE 35. CERRO CUBILETE DRILL HOLE AND DRILL SECTION LOCATION PLAN ...... 68 FIGURE 36. CERRO CUBILETE CROSS SECTION A ...... 78 FIGURE 37. CERRO CUBILETE CROSS SECTION B ...... 79 FIGURE 38. CERRO CUBILETE CROSS SECTION C ...... 80 FIGURE 39. CERRO CUBILETE CROSS SECTION D ...... 81 FIGURE 40. DRILLING IN THE CERRO CUBILETE AREA SHOWING COVER SEQUENCE AND ITS FAULTED BASAL CONTACT; RE-INTERPRETED FROM DRILL HOLE DATA .. 83 FIGURE 41. PROPOSED TRENCHING ON IP CHARGEABILITY IN THE CERRO DE LA MINA AND CERRO CUBILETE AREAS ...... 93
LIST OF TABLES
TABLE 1. CORINA PERMIT COORDINATES ...... 2 TABLE 2. MERCIA PERMIT COORDINATES ...... 3 TABLE 3. ACA HOWE SAMPLING RESULTS AT CORINA ...... 21 TABLE 4. SUMMARY OF PROPOSED TARGET AREAS IN THE CORINA PERMIT - ACA HOWE SATELLITE IMAGERY INTERPRETATION - 2010 ...... 28 TABLE 5. SUMMARY OF PROPOSED TARGET AREAS IN THE MERCIA PERMIT - ACAHOWE SATELLITE IMAGERY INTERPRETATION - 2011 ...... 28 TABLE 6. SAMPLING COMPLETED BY SAMCO ON CERRO CUBILETE ...... 31 TABLE 7. CERRO CUBILETE DRILL HOLE COLLAR DATA ...... 67 TABLE 8. SELECTED DRILL HOLE INTERSECTIONS AT CERRO CUBILETE ...... 69 TABLE 9. CORINA LICENCE PHASE 1 DETAILED EXPLORATION COST ESTIMATE ...... 92 TABLE 10. CORINA LICENCE PHASE 2 DRILLING COST ESTIMATE ...... 94
A C A HOWE INTERNATIONAL LIMITED i
SUMMARY
At the request of Samco Gold Limited (Samco), ACA Howe International Limited (ACA Howe) has prepared the following technical report on the Corina-Mercia exploration licences held by subsidiaries of Samco in Santa Cruz Province in Southern Argentina. The licences are strategically situated within the Deseado Massif close to a number of known mines and prospects.
In Argentina, there are three levels of mineral rights and titles namely Cateo - essentially a claim, Manifestación de Descubrimiento (declaration of discovery) which can be made upon discovery of a mineral occurrence within a Cateo and a Mina, which grants mining rights to the owner of the Manifestacion. Through its local operating companies, Samco holds:
Corina and Corina I licences which are contiguous and cover 2,528 ha in total. They are situated adjacent to the north of the Cerro Moro licence, where Yamana Gold Inc. is currently developing a gold-silver mine. For the purposes of this report, the combined licences are referred to as Corina. Mercia which covers 2,525.08 ha and is contiguous to the east of Corina.
The licences are currently categorised as Manifestacion de Descubrimiento.
Santa Cruz Province is part of Patagonia in southern Argentina. The area within which the licences are situated is characterised by perennial streams, saline lagoons and saltpans. Access to the area is reasonable, with numerous tracks accessible to four-wheel drive vehicles. The nearest major centres to the Samco licences are Puerto Deseado, Puerto San Julian, Caleta Olivia and Comodoro Rivadavia. Rio Gallegos, the capital of Santa Cruz Province, lies to the south of the project areas. These towns can provide basic goods and services. Comodoro Rivadavia and Rio Gallegos are serviced with national airports. Workers are readily available from the surrounding area. Accommodation is available in the main towns though Samco has established a field base in an Estancia close to Corina which services both project areas.
The Deseado Massif is a tectonic block in Santa Cruz Province. The oldest rocks are Lower Palaeozoic metamorphics that are intruded by Lower to Middle Devonian granites with limited basaltic sills and dykes. These rocks are overlain by Permo-Triassic continental sandstones. During the Jurassic and Cretaceous Periods, widespread volcanic activity included the outpouring of rhyolitic ignimbrites and deposition of sediments which together form the Bahia Laura Volcanic Complex. This Group comprises the Bajo Pobre Formation and the more felsic Chon Aike and La Matilde Formations. The Chon Aike Formation consists predominantly of a thick sequence of rhyolitic ignimbrites, while the La Matilde Formation consists of tuffs and epiclastic sediments.
Hydrothermal systems associated with the Chon Aike volcanism produced important epithermal Au- Ag vein deposits in the Deseado Massif. Since 1976, the San Jose, Cerro Negro, Mina Martha, Manantial Espejo, Cerro Moro, Cerro Vanguardia and other deposits, including Samco’s El Dorado- Monserrat have been discovered. Epithermal veins are the most common ore deposits. Vein systems can be followed for kilometres. The most productive veins, including those at Cerro Moro, strike northwesterly to east-west. The quartz veins may be brecciated and contain limonitic and manganous veining and breccia fill. Barite, adularia, and haematite may occur in the quartz veins. The quartz veining may be associated with rhyolitic domes that are the probable source of the mineralising fluids and provide structural loci for their deposition.
Corina is located within a belt of Chon Aike Jurassic volcanic rocks that exhibit a well-developed fault and fracture pattern. A number of possible dyke or vein structures have been mapped. There is indication of a significant rhyolitic dome complex east of the project area and a small rhyolite flow, possibly a parasitic cone on the edge of the rhyolitic dome complex lies on the northeastern property boundary of the licence. The Mercia licence lies contiguous to the east of Corina. The western part of Mercia exhibits clear structural and geological continuity on satellite imagery, though regional
A C A HOWE INTERNATIONAL LIMITED ii
magnetic data indicates a north-northeast-trending regional scale break traversing the eastern part of the property with weaker magnetic signature to the east suggesting a fundamental change at depth, not manifested at surface. In the south of the Corina-Mercia licences, structures strike northwesterly onto the licence from Yamana’s Cerro Moro property, which is contiguous to the south of the properties.
Mineralisation identified to date occurs within a west-northwesterly trending structural corridor extending at least 1500m from Cerro Cubilete, which straddles the Corina-Mercia boundary to the Cerro de la Mina area in northeast corner of Corina. Recently completed IP suggests the corridor extends further to the southeast. At Cerro de la Mina, the mineralisation comprises widespread alteration and quartz flooding, with iron and manganese oxides, clay alteration and barite veining. Minor small scale prospecting pits exist here, reportedly for silver, but no details are available.
The Cerro Cubilete zone comprises an approximately 300 m long, north-northeasterly striking zone in which surface samples average 243 g/t Ag. The zone occupies a broad low ridge-like feature that is marked by haematite alteration which partly overprints a green-clay or chloritic phase of alteration. The haematite alteration attains a width up to 80 m in its northerly part and progressively narrows at surface to the south. The known mineralisation lies within the same corridor of steeply dipping to vertical west-northwesterly striking faulting that continues to the northwest across Cerro de la Mina.
At Cerro Cubilete, chalcedony-dominated banded vein-like structures and associated stratabound replacement style silicic and sulphide mineralisation in breccias and stockworks occur. This is a marked departure from the well-documented quartz-adularia or low-sulphidation type epithermal veins which typify many deposits and prospects in the Deseado Au-Ag metallotect, including many vein structures at the adjacent Cerro Moro Project.
The mineralisation is controlled by the northeasterly trending Callan Fault which juxtaposes relatively impervious, often carbonaceous laminated tuffs known as the hanging wall sequence with the underlying, breccias and stockworks. The mineralisation is clearly multiphase and shows some characteristics of more intermediate-sulphidation type epithermal mineralisation though the ubiquitous presence of adularia may suggest overprinting by a low-sulphidation episode.
A preliminary core-drilling programme has been completed at Cerro Cubilete. Wide breccia zones have been intersected beneath the Callan Fault, with variable amounts of base metals. Coarse galena- sphalerite and, rarely, chalcopyrite, are associated with barite, and tend to occur at deeper levels than the chalcedonic silica and fine grained sulphides. Towards the north, mineralisation is concealed by a (currently) dry lake. Holes drilled on two northern sections intersected better grades than the two southern sections, but this might be explained by a southerly plunge to the mineralisation. Alternatively, intense faulting in the southernmost holes suggests that they may have been collared close to an unexposed west-northwesterly fault, sub-parallel to the drill orientation and may simply have missed the mineralisation. The prospect is open both north and south of current drilling, as well as down-dip.
There are certain similarities to the well-known Fresnillo area of Mexico where silver-base metal intermediate sulphidation epithermal veins, breccias and stockworks occur. The discovery outcrop at Fresnillo contained silver mineralisation in an oxidised stockwork and the majority of the veins and breccias are blind. The Cubilete mineralisation also bears some similarities to the Navidad silver deposit in Chubut Province, Argentina. The latter exhibits breccia hosted mineralisation and stratabound intermediate sulphidation mineralisation hosted by permeable tuffs beneath impervious carbonaceous sediments. Comparisons can also be drawn with the San Cristobal silver deposits in Bolivia, where host rock alteration and deposition of iron oxide-siderite-barite veins containing silver minerals was succeeded by the intrusion of dacite porphyry stocks, uplift and deposition of lava flows, faulting and intrusion of breccia pipes. Deposition of tuff and further hydrothermal activity resulted in alteration and deposition of sulphide minerals (galena, sphalerite, and pyrite) with native silver and barite.
A C A HOWE INTERNATIONAL LIMITED iii
The Callan Fault and its continuations to the north and south of the known mineralisation, beyond the limits of the west-northwest structural corridor, are strong exploration targets.
Samco has conducted ground magnetics and gradient array IP and pole-dipole traverses over and beyond the known mineralised area. Significant anomalies have been identified that indicate that the mineralisation is open laterally and that potentially mineralised northeasterly structures extend beyond the west-northwesterly corridor. There is also indication of intrusive bodies close to the mineralisation.
A lag geochemistry survey conduted by Samco has identified extensive base metal and silver anomalies related to the structural corridor. In addition, high grade gold and associated silver values occur in at least five groupings, usually associated with the intersections of northeasterly and west- northwesterly structures as identified from surface mapping and the IP survey.
The continuation of the west-northwesterly structural corridor beyond the known mineralisation and strong west-northwest and northeast-trending IP anomalies within the corridor also remain strongly prospective targets. Recently discovered northeast-trending quartz veining and alteration in the hanging wall sequence suggests potential for additional mineralisation to the east of the Cerro Cubilete zone.
Elsewhere on the properties, significant targets have been identified; these include potential rhyolite doming and alteration on the western margin of the Corina licence where arcuate veining has been interpreted from satellite imagery. Anomalous rock chip samples with elevated arsenic have been collected from this area. Other areas of interpreted veining and anomalous surface sampling by a previous operator remain to be investigated. The Mercia East zone has characteristics of the very upper part of a low sulphidation epithermal system and merits further investigation. The Angelica zone also bears characteristics of late hydrothermal activity, and work at Sector ‘A’, though at a preliminary stage, has identified quartz veining with high level, low sulphidation epithermal characteristics.
Reinterpretation of regional airborne magnetic and radiometric surveys by Samco also has identified additional, untested structural corridors to the southwest of the structure hosting the Cerro Cubilete- Cerro de la Mina mineralisation, which warrant investigation. Three strong, focussed potassium anomalies, one of which is coincident with the known mineralisation and an interpreted intrusive are of interest.
ACA Howe concludes that the Corina and adjacent Mercia licences are strategically situated within the Deseado Massif adjacent to the ca. 2 Moz Aueq Cerro Moro gold-silver project. The limited sampling and drilling conducted on the licences to date, together with field observations, indicates potential for significant gold-silver and base metal mineralisation on the licences.
ACA Howe recommends 3-D analysis of the available ground magnetic and IP data, and further trenching and drilling on Cerro Cubilete. Systematic trenching is recommended on Cerro de la Mina, followed by scout drilling. The magnetic and lag surveys on both Corina and Mercia should be extended to test the remainder of the licence areas and to incorporate all the lower priority targets as required. This could lead to the definition of targets for trenching and IP surveys and the advancement of targets identified in the regional surveys to the drilling stage.
A two-phase exploration programme is recommended. The initial phase includes infill between the current drill sections at Cerro Cubilete and step-out drilling to the southeast. It is recommended that test holes should be drilled oriented to the southwest and southeast to test the west-northwesterly faults for mineralisation and to determine whether westerly dipping mineralised structures, parallel to the previous drilling, are present. A scissor hole should be drilled between the current sections to test for northwesterly dipping veining. Depending on the results of this programme, a Phase 2 drilling programme would be planned leading to the delineation of resources at Cerro Cubilete.
A C A HOWE INTERNATIONAL LIMITED iv
In Phase 1, a systematic programme of trenching is recommended in the Cerro Cubilete-Cerro de la Mina area to test the structures identified by the work to date. It is considered that this would enable the planning of scout drilling at Cerro de la Mina in the vicinity of the gold-silver anomalism. For budgetary purposes it is assumed that four drill fences would be drilled initially.
The Mercia East area should be covered by a gradient array IP survey to refine target selection. Sector ‘A’ should be trenched and surveyed using gradient array IP. A significant number of resistive outcrops of possible quartz veining or silicification have been identified by satellite imagery studies, but have not yet been visited by Samco geologists. Channel sampling of outcropping veins should be conducted.
The lag soil sampling programme should be extended to cover the remainder of the licence areas. The current programme has proved effective in identifying focussed anomalism in lead, zinc and silver, and has also located five principal areas with gold and silver values that can be related to structures, that require detailed examination, including systematic trenching and drilling.
The ground magnetometer survey completed to date has identified significant linear zones that are associated with known mineralisation. This should be extended to cover the remainder of the licence areas and in conjunction with the recommended lag programme may provide additional targets for follow up with IP, trenching and drilling. The first phase exploration is estimated to take 10 weeks. The budget estimated for this phase is estimated to be US$1,940,625.
Contingent on the success of the first phase, it is proposed that additional drilling will be conducted. For budgetary purposes it is estimated that 5,000m of core drilling may be required at Cerro Cubilete and 2000m at Cerro de la Mina for further definition of the mineralisation leading to resource delineation and that 6,500m will be required on additional targets identified elsewhere on the licences. This will take an estimated six months to complete. The cost of this phase is US$5,433,750.
A C A HOWE INTERNATIONAL LIMITED 1
1. INTRODUCTION
ACA Howe International Limited (ACA Howe) was requested by Samco Gold Limited (Samco) to prepare the following technical report on the Corina and Mercia exploration licences held by Samco through its Argentine subsidiaries in Santa Cruz Province in Argentina.
Samco has two wholly owned subsidiaries: Samco Gold SA and 5R SA (the “Subsidiaries”), both of which are incorporated in the IGJ (Companies Registry of Buenos Aires City). This registration as a corporation allows the Subsidiaries to operate throughout Argentina. Both Subsidiaries have also been registered in the Province of Santa Cruz as a ‘productor minero’ in order to register/own mining properties in the province. The Corina and Mercia licences are all held by Samco Gold SA.
The Corina property was included in an NI 43-101 report dated the 20th of May, 2011, as amended 23rd of June, 2011, by ACA Howe in support of a listing on the Venture exchange of the TSX of the full property portfolio held by Samco in Santa Cruz Province. Subsequent to the initial ACA Howe visit Samco acquired the Mercia concession (Manifestación de Descubrimiento) which is contiguous to the Corina concessions. A work programme covering all of Corina was recommended at the time, but following the discovery of significant mineralisation in the Cerro de la Mina and adjacent Cerro Cubilete prospects, which lies close to the boundary on the adjacent Mercia licence, work has largely concentrated on those areas and much of the remainder of the licence areas is still to be explored. Detailed geological mapping, ground magnetics, trenching and limited drilling was conducted by Samco from late 2012, culminating in a small drill programme in early 2013. Work has subsequently continued on the prospects including lag sampling and induced polarisation (IP) surveying. A detailed topographic survey has been conducted on the drilling area at the Cerro Cubilete prospect. Limited trenching, surface sampling and mapping have been conducted in the southeastern and eastern parts of Mercia.
ACA Howe first visited the properties in June 2010 and conducted limited check sampling on the Cerro de la Mina area. A satellite imagery interpretation was conducted by ACA Howe over the properties to assist with the geological and structural interpretations and to help plan exploration programmes designed to test the potential of the licence areas. ACA Howe has been in receipt of all Samco weekly and monthly progress reports on both properties and visited both Corina and Mercia in February 2013, following the drilling. This enabled a detailed inspection of the core. Trenches and pits in all areas were viewed and the work in progress was discussed in detail with Samco’s geologists.
This report has been prepared in accordance with the requirements of National Instrument 43-101. All units are metric unless otherwise stated. The map coordinates shown are Gauss-Kruger Campo Inchauspe Zone 2.
2. RELIANCE ON OTHER EXPERTS
ACA Howe is not qualified to comment on the legality of title and has relied on information supplied by Samco on ownership included in Section 3.
3. PROPERTY DESCRIPTION AND LOCATION
3.1. MINERAL PROPERTY APPLICATION PROCESS IN ARGENTINA
There is no ground staking for mineral rights in Argentina. Mineral rights are acquired by application to the government for concessions to seek, own and sell minerals located within a specified parcel of
A C A HOWE INTERNATIONAL LIMITED 2
land. Generally, all persons or entities qualified to acquire and possess real estate can obtain mineral rights. There are three levels of mineral rights and titles which are as follows: ‘Cateo’ - Before work in an area can commence, an exclusive exploration permit known as a Cateo must be obtained. Once an application is submitted all rights to any mineral discoveries on a Cateo by third parties belong to the applicant. A Cateo is measured in 500 hectare (“ha”) units and can range in size from a minimum of 1 unit (500 ha) to a maximum of 20 units (10,000 ha). The approval of a Cateo specifies the area and the term of the Cateo. A one-time fee of $0.80 per ha is due on application for the Cateo. The rights of the Cateo holder are subject to surface rights. During the term of a Cateo, which begins 30 days after approval, periodic relinquishment of ground is made such that after 300 days from the date of approval, 50% of the area in excess of four units must be relinquished and after 700 days, 50% of the remaining area must be relinquished. A Cateo of one unit has duration of 150 days and for each additional unit, its duration is increased by 50 additional days. ‘Manifestación de Descubrimiento’ – upon discovery of a mineral occurrence within a Cateo, the owner can apply for a Manifestación de Descubrimiento (MD) to protect the discovery. The application for a MD can be made at any time during the term of the cateo but must be made before the expiry of the cateo. The maximum area of one MD is 3,000 ha. Upon verification and approval of the mineral discovery by the authorities, the MD will protect the mineral discovery until such time as the ‘mensura’ (measurement) process begins leading to the eventual grant of a ‘Mina’ (mining lease). ‘Mina’ - After the size and configuration of a Manifestacion de Discubrimiento are determined, a part or all of it is surveyed and the area applied for a ‘Mina’ or Mining Lease. This is usually done after the results of exploration indicate a potential ore body.
No permits are required to conduct exploration activities. However, prior to commencing exploration, an agreement is usually entered into with the surface owner specifying the activity to be conducted (drilling, trenching, etc.). This agreement usually includes the provision or use of water and other facilities that the owner may be in a position to provide (warehouse, trucks, etc.). The agreement is filed with the mining authorities together with the exploration plan and the environmental impact report. Agreements covering both Corina and Mercia have been filed and the environmental impact reports have been approved.
The mining or exploration activity takes priority over the rights of the surface owner such that if for any reason it is not possible to reach an agreement with the owner, the company can file a surety bond (a guarantee) in favour of the owner and start exploration.
3.2. LOCATION OF THE CORINA AND MERCIA LICENCES
The combined Corina Permits are situated in the Santa Cruz Province of Southern Argentina and are approximately 55 km west-southwest of Puerto Deseado and 10 km northeast of the Cerro Moro project. The coordinates of the combined Corina Permit, which covers 2,528 ha, are given in Table 1 below and these refer to the Gauss-Kruger projection to the Campo Inchauspe 1969 Datum.
TABLE 1. CORINA PERMIT COORDINATES Point Easting Northing Northwest 2682100.00 4686617.00 Northeast 2685701.00 4686617.00 Southeast 2685701.00 4679500.00 Southwest 2682100.00 4679500.00
The coordinates for the Mercia Permit are given in Gauss-Kruger projection to the Campo Inchauspe 1969 Datum (Table 2).
A C A HOWE INTERNATIONAL LIMITED 3
TABLE 2. MERCIA PERMIT COORDINATES Point Easting Northing A 2685701.00 4684931.75 B 2689519.54 4684931.75 C 2689519.54 4682431.75 D 2692879.54 4682431.75 E 2692879.54 4684931.75 F 2693342.00 4684931.75 G 2693342.00 4680528.00 H 2685701.00 4680528.00
3.3. CURRENT STATUS OF LICENCES
The properties are currently classified as ‘Manifestaciones de Descubrimiento’. Once the relevant Samco subsidiary (as owner of the properties) finishes all steps required by the Direction of Mining of Santa Cruz (namely the notice to the surface owners and the measurement of the area), the Direction of Mining of Santa Cruz will issue a resolution and give the definitive title of mining ownership. Samco’s lawyers have assured ACA Howe that the properties are in good standing. ACA Howe has viewed an English language version of the legal documentation.
3.3.1. CORINA (AND CORINA I)
These two licences are contiguous and are treated as a single entity termed ‘Corina’ in this report.
3.3.1.1. CORINA
Area: 840 ha. Location: Lote 14 Fracción A, Departamento Deseado, Provincia de Santa Cruz, República Argentina. Gauss Krüger coordinates: Y: 4684800 X: 2684733. Claim. File Nbr. 421.630 /GP/08. Filed by Grasta Petróleo SA November 6th, 2008. Assignment to Samco Gold SA registered August 25th, 2009. Registered and officially published on November 22nd, 2013. No payments required until 2 years from that date. Declaration of discovery: mining claim under due legal process. Property boundaries are located on the official registry of cadastral maps but have not been surveyed. Mineralisation in the form of barite, quartz and iron-manganese veining and alteration occurs in the northeast part of the licence. At commencement of exploitation, the holder must pay canon and provincial royalties subject to the kind and quality of the discovery. There are no environmental liabilities. No other significant factors or risks are known that could affect access, title or the right or ability to conduct work on the property as the licence carries legal entitlement for access to the property. It is normal to enter an agreement with the individual surface owners to cover compensation for disturbance. Obtaining of surface owner permit in process (Notices have been broadcast via local radio). The EIA (file # 427.626/GP/09), was approved on November 14th, 2012.
A C A HOWE INTERNATIONAL LIMITED S
E
D
N
A
S
O
L
E
D
A
R
E
L I
D
R
O
C
SOUTH ATLANTIC OCEAN
LEGEND
Corina and Mercia Permit: Samco Gold Limited Road Deseado Massif Major Rivers
LATITUDE/ LONGITUDE NOVEMBER 2013 FIGURE 1: LOCATION OF THE CORINA AND MERCIA LICENCES: SANTA CRUZ, ARGENTINA.
6
3.3.1.2. CORINA I
Area: 1,688 ha. Location: Departamento Deseado, Provincia de Santa Cruz, República Argentina. Gauss Krüger coordinates: Y: 4682000 X: 2683500. Claim. File Nbr. 426.737/GP/09. Filed by Grasta Petróleo SA August 5th, 2009. Assignment to Samco Gold SA registered February 15th, 2010. Registered and officially published on October 24th, 2013. No payments required until 2 years from that date. Declaration of discovery: mining claim under due legal process. Property boundaries are located on the official registry of cadastral maps but have not been surveyed. Mineralisation occurs in the west and south of the licence as quartz veining. At commencement of exploitation, the holder must pay canon and provincial royalties subject to the kind and quality of the discovery. There are no environmental liabilities, royalties, back-in rights, or other payments, agreements or encumbrances to which the property is subject. No other significant factors or risks are known that could affect access, title or the right or ability to conduct work on the property as the licence carries legal entitlement for access to the property. It is normal to enter an agreement with the individual surface owners to cover compensation for disturbance. Obtaining of surface owner permit in process (Notices have been broadcast via local radio). The EIA (file # 427.626/GP/09), was approved on November 14th, 2012. This file includes CORINA & CORINA I EIA.
3.3.2. MERCIA
Area: 2,525.08 ha. Location: Lote 14 Fracción A, Departamento Deseado, Provincia de Santa Cruz, República Argentina. Gauss Krüger coordinates: Y: 4681357, 61 X: 2686390, 41. Claim. File Nbr. 425.612 /SG/10. Filed by Samco Gold SA November 10th, 2010. Registered and officially published on October 24th, 2013. No payments required until 2 years from that date. Declaration of discovery: mining claim under due legal process. Property boundaries are located on the official registry of cadastral maps but have not been surveyed. Mineralisation in the form of barite, quartz and iron-manganese veining and alteration occurs in the east part of the licence and silver-gold-base metal mineralisation occurs in the northwestern corner of the property adjacent to the boundary with Corina. At commencement of exploitation, the holder must pay canon and provincial royalties subject to the kind and quality of the discovery. There are no environmental liabilities, royalties, back-in rights, or other payments, agreements or encumbrances to which the property is subject. No other significant factors or risks are known that could affect access, title or the right or ability to conduct work on the property as the licence carries legal entitlement for access to the property. It is normal to enter an agreement with the individual surface owners to cover compensation for disturbance. Obtaining of surface owner permit in process (Notices have been broadcast via local radio). The EIA (file # 427.123/GP/11), was approved on August 2nd, 2013.
A C A HOWE INTERNATIONAL LIMITED 7
Samco is currently conducting legal searches via the Registry of Real Estate regarding the surface ownership. Should the properties proceed to the mining licence stage, the Registry of Mining will require proof that the company has obtained formal authorisation from the surface owners to access their farms before exploitation can commence. Once the Direction of Mining of Santa Cruz Province has analysed the reports of the Registry of Real Estate and other required reports (Cadastral Register, Marks and Signals), the Direction will notify the surface owners that initial work has identified ‘manifestations’ of mineralisation on their land. In the notice, the Direction announces the discovery and attempts to confirm that there is agreement with the owners to access their farms. If it is not possible to contact the surface owners in person, then Samco must broadcast the notice via radio stations serving the relevant rural area.
The Direction of Mining establishes the time limit in which the surface owners must be notified. This can be 10 or 15 days, but can be extended. If there are no objections from surface owners, the Direction of Mining issues the Disposition of Registration (Mining Licence) that must also be published by means of edict during 3 days in the Official Gazette of the Province.
Corina and Corina 1 were assigned to Samco Gold SA under an agreement signed on June 3rd, 2009. A total amount of AR$ 40,000 (equivalent to US$5,891 on October 28th, 2013) was paid in one instalment.
4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
Santa Cruz Province is part of the region of Patagonia in the far south of Argentina and the physiography is described as ‘cold arid steppe’ with a harsh climate. In the west, the Andes are lower than elsewhere in Argentina but still have year-round snow with the Patagonian ice sheet feeding numerous glaciers. East of the Andes, Santa Cruz Province is a gently tilted plateau which gradually descends towards the Atlantic coast. The area within which the majority of the licences are situated is characterised by perennial streams, saline lagoons and saltpans. The plateau is crossed by a number of large rivers that produce fertile valleys in the province, examples of which are the Deseado River, Santa Cruz River and the Gallegos River. The climate in the area is classified as semi-arid, with the majority of the precipitation falling on the snowfields in the west, with most of the remainder of the region receiving about 200 mm average rainfall each year, which falls mainly in the winter. It is also a cold arid region with temperatures averaging 13° C during the summer months and 3° C in winter, with minimum temperatures reaching -25° C. The region is also affected by strong winds for most of the year.
The project area is of low relief, with an average elevation of 115 m. There are no permanent watercourses and several saline lagoons and saltpans occur throughout the licences. The main vegetation types are drought resistant shrubs and grasses. The climate is harsh in winter with frequent snowfalls and strong winds but operations are rarely affected by the weather. In the vicinity of the Cerro de la Mina prospect, historically termed Mina Iglesia and formerly worked on a small scale for silver, a steep scarp falls rapidly to the east to a saline lagoon. Immediately to the north of the mineralisation, a rhyolite flow dome forms an isolated hill.
In general the area is very sparsely populated and the main occupation is sheep farming which is managed from widely scattered ‘estancias’. However sheep farming is now the second ranking economic activity in this area, as oil, gas and mining (coal and gold) have overtaken agriculture, giving Santa Cruz the highest GDP per capita in Argentina. In addition, fishing is an important activity in Puerto Deseado, Puerto San Julián, Puerto Santa Cruz and Río Gallegos, with prawn, squid and hake being landed and frozen for export.
A C A HOWE INTERNATIONAL LIMITED 8
The nearest major centres to the Samco licences are Comodoro Rivadavia, (population 190,000) Puerto Deseado (population 10,000), Puerto San Julian (population 6,000), and Caleta Olivia (population 36,000) to the northeast. These major centres can provide basic goods and services. The national power grid serves these centres. Comodoro Rivadavia is the 20th largest city of the country and the largest in South Patagonia and has a national airport with regular commercial jet services from Buenos Aires. It also has a major port facility. A well maintained concrete airstrip is located at Puerto Deseado, serviced via small to mid-size charter aircraft. Workers are readily available from the surrounding area.
The properties are accessible from Comodoro Rivadavia. National Highway 3 is followed south for 150 km then paved highway 281 is followed some 60 km south towards Puerto Deseado, where gravel road 87 is followed southwest a further 50 km southwest, crossing Rio Deseado. The properties lie 12 km east of the highway and are accessed by all-weather gravel roads and local farm roads and tracks that provide reasonable access for four-wheel-drive vehicles to all areas of interest within the project area. Exploration is possible on a year-round basis.
Accommodation is available in the main towns, and Samco has established a field camp in a well equipped ranch close to Cerro de la Mina. All areas of the properties are readily accessible by tracks using four-wheel drive vehicles. There is sufficient room for mining operations, tailings storage, waste disposal, heap leach pads and processing sites. Electric power is not available proximal to the site. However, the Cerro Moro mine, which is under development on the property adjacent to the south of Corina plans to bring mains electricity to the area. At Cerro Moro, a water borefield has been identified with the assumed capacity to supply the proposed mine (43-101 Technical Report, March, 2012), and it is likely that similar supplies can be found at Corina.
5. HISTORY
The Corina licence (Table 1) was originally acquired by Grasta Petroleo S.A. (Grasta). It was subsequently assigned to Samco Gold SA under an agreement with Grasta signed on June 3rd, 2009. A total amount of AR$ 40,000) was paid to Grasta in one instalment.
Mercia was directly acquired by Samco in November 2010.
There are no historical mineral resource and mineral reserve estimates on the properties. Small-scale exploration took place in the 1990s from Mina Iglesia (now termed Cerro de la Mina), in the northeast part of Corina, reportedly for silver, but no details are available on production.
5.1. GRASTA PETROLEO S.A.
As part of the initial Manifestacion de Descubrimiento applications, Grasta collected samples from Corina. Samples were grab or chip samples of any material encountered that appeared to be altered, but cannot be considered representative of the outcrops sampled. The results were not made available at the time of ACA Howe’s visit to the area. Subsequently, ACA Howe was provided with incomplete results with only gold, silver and base metal results retained out of a 39 element ICP package in most cases. Sample positions are plotted on the geological maps in the local geology section (Section 6.3) below.
On Corina, 16 grab samples were collected from outcrop and float. Results indicate minor enhancements of gold (2 samples) and silver (1 sample) accompanied by elevated arsenic (4 samples), and zinc (4 samples). It does not appear that samples were collected from the Mina Iglesia small-scale workings. The highest gold and silver value was returned from a location in the west–centre of the Corina licence. Four samples from the southwest part of the licence returned elevated arsenic values.
A C A HOWE INTERNATIONAL LIMITED 9
6. GEOLOGICAL SETTING AND MINERALISATION
6.1. REGIONAL GEOLOGY
Figure 3 shows the regional geological setting of the Deseado Massif. The structure of this region is characterised by block faulting. High angle normal faults with strike-slip movement, corresponding to Permo-Triassic rifts, were reactivated during the Jurassic and this extensional movement was accompanied by simultaneous eruptions of acid volcanic rocks. These early Mesozoic events in this region preceded the opening of the South Atlantic Ocean. Later, the area underwent a marine incursion during the Tertiary with the deposition of marine sediments, followed by the deposition of continental sediments and outpouring of basaltic lavas during the Quaternary.
The Corina and Mercia properties are located within the Deseado Massif, which is a tectonic block in the central-portion of the Santa Cruz Province, covering an area of approximately 60,000 sq km. The oldest rocks within the Deseado Massif are the Upper Ordovician to Lower Devonian metamorphics of the La Modesta Formation (also known as the Rio Deseado Complex). This formation is intruded by calcalkaline granite and granodiorite of Lower Devonian age, together with associated but limited basaltic sills and dykes. These rocks are in turn unconformably overlain by the Permo-Triassic continental sandstone of the La Golondrina and El Tranquilo Formations, which were deposited in a series of graben and half-graben structures.
During the Jurassic and Cretaceous Periods the region underwent extensional tectonics, which initially resulted in the deposition of the epiclastic and pyroclastic Roca Blanca Formation, followed by the widespread eruption of thick andesite flows (Bajo Pobre Formation), during the Mid-Jurassic. The volcanic activity continued into the Upper Jurassic with outpouring of a large volume of rhyolitic ignimbrites, tuffs and volcaniclastic sediments. The ignimbtites are known as the Chon Aike Formation, while tuffaceous units are grouped as the La Matilde Formation, which is regarded by some workers as a distal phase of the Chon Aike. The Bajo Pobre, Chon Aike and La Matilde Formations are collectively known as the Bahía Laura Volcanic Complex (Giacosa et al., 2010). Most of the known mineralization in the Desaeado massif is hosted by ignimbritic rocks of the Chon Aike Formation, or by andesitic volcanics correlated with the Bajo Pobre.
In the Upper Jurassic, dextral strike-slip movement provided open structures for the formation of mineral veins on west-northwest trends. A change to compressional tectonics in the Cretaceous led to folding and inversion of pre-existing faults, and the development of the Bajo Grande unconformity, widely recognized throughout the region. A marine incursion occurred during the Oligo-Miocene with the deposition of fossiliferous marine clastic sediments. Sub-aerial olivine basalt extrusion occurred during the Cenozoic. The Holocene is characterised by the deposition of fluvio-glacial deposits, alluvial fans, river alluvium and lake-bed and saltpan deposits.
Structural studies of the Deseado Massif carried out by Biscayart et al (2008) concluded that quartz and silicified veins in the region have a north-northwest orientation, which is controlled by normal faults, however subsequent exploration has also revealed important east-west trending veins (Cerro Negro, Cerro Moro, Mina Martha). During the Upper Jurassic, contemporaneous with the Chon Aike Formation volcanicity, the extension could have been accompanied by dextral strike–slip movement. Lopez et al. (undated) undertook a detailed lineament analysis of the epithermal deposits of Southern Argentina. Their directional analysis indicates that the principal lineaments in the region trend north- northwest, north and east. However the main trends of mineralised quartz and silicified veins are west-northwest and northwest. It appears that the mineralised veins formed as dilational splays in a northeast-southwestextensional stress field which resulted in a component of dextral movement on northwest and east-west faults.
A C A HOWE INTERNATIONAL LIMITED -72 ° -71 ° -70 ° -69 ° CALETACALETA OLIVIAOLIVIA-68 ° -67 ° -66 ° -65 ° -64 ° -63 ° PERITOPERITO MORENOMORENO PICOPICO TRUNCADOTRUNCADO LASLAS HERASHERAS SOUTHSOUTH ATLANTICATLANTIC CHILE FITZFITZ ROYROY
-47 °
DESEADODESEADO MASSIFMASSIF PUERTOPUERTO DESEADODESEADO PINGUINOPINGUINO (ARGENTEX)(ARGENTEX)CorinaCorina andand MerciaMercia
-48 ° LicencesLicences
ELEL DORADODORADO && MONSERATMONSERAT
GOBERNADORGOBERNADOR GREGORESGREGORES LEGEND
Towns -49 ° Major Rivers Deseado Massif ARGENTINA SANSAN JULIANJULIAN Argentine Border Corina and Mercia Licences Quaternary Alluvial Deposits Cenozoic Basalts Tertiary Sediments Bahla Laura Group Continental Sediments -50 ° PUERTOPUERTO SANTASANTA CRUZCRUZ Permo-Triasic Continental Sediments Plutonic Rocks
0 50 100 kilometres
FIGURE 3: REGIONAL GEOLOGY OF THE DESEADO MASSIF: SANTA CRUZ, ARGENTINA. 11
6.2. REGIONAL GEOPHYSICS
Figures 4 and 5 show the available regional aeromagnetic geophysical data obtained from the Servicio Geológico Minero Argentino (‘Segemar’). Flight lines were north-south, with a line spacing of 1,000 m and a mean ground clearance of 120 m. GPS positioning was used with elevation controlled by radar, backed up by barometric measurements. Base station GPS and magnetic measurements were taken to control position and diurnal drift. A continuous reading Geometrics G-822A caesium-vapour instrument was used. Results were recorded as total field measurements and processed to obtain reduced-to–pole plots. Samco has recently acquired the full data set and reprocessed the survey information.
The reduced-to-pole magnetic data over Corina indicate two localised highs on the northern flank of a circular feature over Cerro Moro, adjacent to a strong northeast-trending discontinuity that traverses the Cerro Moro property. The Samco reprocessing demonstrates the presence of several significant west-northwesterly trending features that are clearly deep seated structures with near surface expression. One continues across the Cerro Cubilete-Cerro de la Mina mineralisation and two traverse the properties farther to the south. The stronger, more persistent feature in the southwest of Corina and Mercia coincides with a possible graben in this area as indicated by persistent, major west- northwesterly trending fracturing on the satellite imagery. The latter forms a strong exploration target.
The regional magnetic data also indicates a north-northeast-trending regional scale break traversing the eastern part of the property with weaker magnetic signature to the east suggesting a fundamental change at depth, not manifested at surface (Figure 4).
It is also interesting to note that the properties lie within an area of high potassium counts with a high immediately over the Cerro Cubilete area where a buried intrusive or rhyolitic dome is tentatively interpreted from the ground magnetic survey, suggesting the possibility of potassic alteration associated with a local heat source (Figure 5). Two similar features are seen at the west and south of Corina, both of which coincide with rhyolitic domes interpreted from satellite imagery (Figure 8). The easternmost of the focused anomalies fall on a northeasterly trend that coincides with one of the structural trends controlling the Cerro Cubilete minealisation.
The northeastern potassic high anomaly coincides with a possible intrusive interpreted from ground magnetics and IP, described below in Section 8.
A C A HOWE INTERNATIONAL LIMITED FIGURE 4: REDUCED TO POLE REGIONAL MAGNETICS OVER THE CORINA/MERCIA AREA: SANTA CRUZ, ARGENTINA (WHITE - LICENCE BOUNDARIES) FIGURE 5: POTASSIUM ANNOMALISM IN THE CORINA/MERCIA AREA: SANTA CRUZ, ARGENTINA (WHITE - LICENCE BOUNDARIES) 14
6.3. LOCAL GEOLOGY
In October 2009, Samco requested ACA Howe to conduct a satellite interpretation of the licence areas. This was supplemented by an incremental analysis of the Mercia concession and regional analysis of the Cerro Moro area. Following characterisation studies of published information on mineralisation in the area, colour and alteration filtering identified potentially mineralised rhyolitic domes and areas of significant alteration in the vicinity of the Cerro Cubilete and Cerro de la Mina prospects.
The following descriptions are based to a large extent on the findings of the study and limited ground truthing during ACA Howe’s visits, supplemented by a detailed ground mapping programme in the Cerro Cubilete-Cerro de la Mina area by consultant Nick Callan and local studies by Samco geologists.
The Corina and Mercia concessions lie in the eastern part of the Deseado Massif and are located over a belt of Jurassic volcanic rocks which extends inland from Puerto Deseado. To both the north and south, younger cover rocks lap on to the outcrop of the volcanics. These marine sediments rest unconformably on the rhyolites and ignimbrites of the Deseado Massif. The cover rocks comprise Tertiary marine sediments and Cenozoic terrace gravels and the pattern of embayments suggests that the pre-Tertiary topography is being exhumed, as there do not appear to be any faulted contacts; however there are faulted structures to the west where the Jurassic volcanics come into contact with older rocks.
The Jurassic Chon Aike volcanics underlying the permit area show a well developed fault and fracture pattern which controls the drainage in the area. The drainage pattern is poorly developed, with many streams draining into the small lakes and ponds which are a feature of the area, and it appears that these lakes and ponds have developed over fracture intersections. In addition, a number of possible dyke or vein structures are interpreted with west-northwest to northwest, north or easterly trends. Outside the permit area, over the sedimentary cover rocks, the fracture pattern appears to be much less dense and there is no evidence of dykes or veins. The main fracture trends are west-northwest, north- northeast, north and east-northeast.
There is some evidence for rotational movement on the faults, particularly in the Cerro de la Mina area where there are a number of curvilinear structures which possibly indicate an element of dextral movement. Possible dyke/veins are associated with either extensive fractures or zones of increased fracture density. Mineralisation at Cerro Cubilete in the northwestern corner of the Mercia licence extends in a northwesterly direction towards Cero de la Mina on the Corina licence and comprises widespread alteration and quartz flooding, with iron and manganese oxides, clay alteration and barite veining. This is visible as a clearly defined, significant alteration zone on the satellite imagery. Similar, though weaker zones are observed on the western margin of Corina and immediately to the north of the Mercia licence.
Massive quartz veining was observed by ACA Howe some 4.5 km south of the Corina licence, striking to the north towards the property, and quartz stockworks were observed on a track 2 km southwest of the licence. There is indication of a significant rhyolitic dome complex about 3 km east of the Cerro de la Mina-Cerro Cubilete mineralisation and a small rhyolite flow, possible a parasitic cone on the edge of the flow dome lies on the northeastern property boundary of the licence, some 1.5 km northeast of the mineralised zone. This is identified as target 5 on the satellite imagery interpretation (Figure 8).
A C A HOWE INTERNATIONAL LIMITED N
FIGURE 6: MAPPING OF THE CORINA LICENCE BY NICK CALLAN (DECEMBER 2011) FIGURE 6 LEGEND: LEGEND FOR THE MAPPING OF THE CORINA BY NICK CALLAN (DECEMBER 2011)
18
6.3.1. RHYOLITE DOMES
Rhyolite domes are significant controls of mineralisation on Mariana Resources’ Las Calandrias property (and the Adjacent Escondido project held by Minera I.R.L.), which is in a similar geological setting to Corina, but some 80 km to the northwest. Mariana’s and I.R.L.’s websites contain information about the occurrence of rhyolite domes (e.g. Sillitoe, February and November 2009, reports available for download) as well as some stylised geological maps of the Las Calandrias area. Bonanza grade gold and silver epithermal veins and silicified breccias have been identified, together with a lower grade bulk tonnage disseminated deposit.
Following examination of the Las Calandrias/Escondido area on Google Earth it appears that the rhyolite domes identified by Mariana Resources and I.R.L. can be interpreted from their morphology and colour on the Landsat imagery. In the Las Calandrias area some are roughly circular but others are lenticular, extending along the strong northwest-trending fractures in that area. The Corina area satellite data includes ASTER and Quickbird imagery, which enables the use of the ASTER ratioed images and the high spatial resolution of the Quickbird data. From this a further 10 possible rhyolite domes have been tentatively identified on Corina and Mercia, which correlate with previously mapped faults and veins. However, the features are not as strong as those seen in Las Calandrias/Escondido, probably because the depth of erosion at Corina/Mercia is less than in the Las Calandrias/Escondido area, so the majority of the interpreted rhyolite domes are not fully exposed in the Corina area.
6.3.2. GEOLOGY OF THE CERRO DE LA MINA AND CERRO CUBILETE MINERALISED AREAS
The following account is largely taken from the report on the detailed mapping conducted on behalf of Samco by mapping expert Nick Callan (December, 2011), modified by recent field studies by Samco geologists.
Stratified units and distribution
Some eight principal stratified map units were defined in the area, as well as two minor intrusive litho- types showing very limited distribution. All units are broadly assigned to the Middle to Upper Jurassic age Chon Aike Formation.
The geology of the mapped sector is dominated by a broadly north-northwest trending domain of ignimbritic tuffs of inferred rhyo-dacite composition. This unit is well-exposed in the Cerro de la Mina sector, with extensive rubbly outcrops present throughout much of the central and south parts of the mapping area. The most conspicuous feature of the unit is the presence of widespread brecciation, largely as crackle-breccias and in-situ jigsaw-type breccias, with local more matrix-supported, coarse monomictic breccia types. Breccia textures are thought to be a type of auto-brecciation resulting from circulation of silica-rich residual fluids following deposition and subsequent welding/compaction of the felsic unit.
In the Cerro Cubilete sector the breccia unit is overlain by a well-bedded sequence of intercalated lithic lapilli tuffs, lenticular coarse tuff-breccias, sandy to pebbly tuffs or tuff-wackes, and finely laminated ash tuffs. Local occurrences of calcareous laminated volcanic sandstones with thin intercalations of compact grey micritic limestone, as well as thicker units of hackly, brown- weathering, locally internally laminated limestone containing irregular patches and nodules of slumped and disaggregated laminated siliceous material are generally closely spatially associated with this stratified tuff/epiclastic sequence. Deposition of the limestones probably occurred in a quiescent lagoonal setting within the volcanic environment.
Minor occurrences of a brown weathering, grey, fine-grained granular lithology, probably a lithic tuff, are locally preserved in northeast-striking fault-bounded depressions.
A C A HOWE INTERNATIONAL LIMITED 19
Overlying the rhyo-dacite ignimbritic tuff domain along much of the western margin of the mapped sector is a veneer of texturally very distinctive olive-green coloured, intensely welded, fiamme-rich ignimbrite with broken feldspar and biotite crystals and minor equant lithic lapilli. The unit hosts minor disseminated magnetite. The broadly northwest-trending trace of the contact of this unit with the underlying ignimbritic package is conspicuously segmented by a swarm of parallel northeast- striking structures seen as prominent lineaments on imagery. Erosional or structurally controlled windows expose the underlying rhyo-dacite ignimbrite package through the veneer of the intensely welded unit.
In the northwest corner of the area is a shallow north to northeast dipping, platy foliated vitric tuff unit, possibly post-mineralisation.
Lying north of, and in faulted contact with the well stratified tuff sequence east of Cerro Cubilete, is a domain of fairly homogeneously textured moderate to strongly welded ignimbritic tuffs that form the southern part of a far more extensive generally strongly welded ignimbritic domain occupying the hills beyond the northeast limit of the mapping.
Intrusive units
In contrast to the adjacent Cerro Moro property, where rhyolitic domes abound, no significant intrusive phases were identified to outcrop in the mapped sector at Corina. Only a single minor occurrence of high-level rhyolite intrusive was noted, located in the northeast part of the mapped area. A rock identified petrographically as a sheared, flow banded daci-andesite, but strongly resembling a typical flow-banded rhyolite in hand specimen, was intersected at the deepest part of a drill-hole (CCDDH07). Minor outcrops of andesite or daci-andesitic intrusives are present on the east margin of the map area, in close juxtaposition with laminated volcanic sediments and limestones. ACA Howe notes that the satellite interpretation suggests the presence of subtle signatures of largely concealed rhyolite domes in the Corina area. There is also indication of intrusives on the ground magnetics and aero magnetic data and the recent IP survey, particularly in the northeastern part of the map area, east of the Cerro Cubilete mineralisation.
Structure
Generally shallow stratigraphic dips are recorded throughout the map area, with diverse dip-directions suggestive of only mild warping. Localised steepening of stratigraphy is noted adjacent to some fault structures. Well-exposed stratified tuffs in the Cerro Cubilete sector show shallow south to southeast dips.
Three principal fault orientations are present in the sector: (i) west-northwest to northwest steeply dipping to vertical structures, (ii) northeast striking structures of rather poorly constrained dip, and (iii) less common but apparently quite persistent northeast to north-northeast striking, rather arcuate structures, again with poorly defined dips.
An approximately 500 m wide corridor of parallel to sub-parallel west-northwest striking, vertical to steeply north dipping faults, locally offsets the contact between the brecciated rhyo-dacitic ignimbrite and tuffs within the Cerro Cubilete-Cerro de la Mina mineralised zone. Dip-slip type slickensides occur locally on exposed, locally silicified west-northwest striking faults. A west-northwest to locally more east-west striking, steep north dipping fault marks the northern limit of the structural zone and limits the bedded tuff unit in the Cerro Cubilete area, with the northern fault block comprising strongly welded tuffs. Elements of the fault corridor can be traced some 1.5 to 2 km along strike to the northwest towards the northwest limit of the Cerro de la Mina Sector. Samco geologists have recently identified a series of extensional, north-northeast striking, sigmoidal structures containing Fe-Mn+-Ba mineralisation within the west-northwest corridor. These have a clear IP signature (Section 8) and support an interpreted dextral movement associated with the latter. The structural corridor was clearly a strong control on hydrothermal alteration and mineralisation in the Cerro Cubilete-Cerro de la Mina
A C A HOWE INTERNATIONAL LIMITED 20
sector. Recent IP surveys east of Cerro Cubilete have identified more extensive linear and curvilinear features that cut across the structural corridor; these are interpreted as possible annular faults around a concealed intrusive.
In the western and southern parts of the map area, east-northeast to northeast striking faults dominate, seen on imagery as very prominent parallel lineaments connecting small dry lakes. A prominent member of this group of structures marks the southern limit of intensely welded ignimbrite unit in the extreme southern part of the mapped area. This feature represents the southwestern continuation of the Angelica zone (Section 8) which has been traced a further kilometre to the northeast. Quartz veining and float trains have been identified along its outcrop by Samco geologists.
The west-northwest striking Cerro Cubilete-Cerro de la Mina structural zone clearly represents a very fundamental feature of the structural architecture of the Corina property, controlling the more significant hydrothermal alteration and mineralisation in the mapped area. The structure may represent one of a more regional-scale series of west-northwest to northwest striking blocks. Two further, parallel structural corridors are indicated by the regional aeromagnetics to the southwest on the Corina licence; these have yet to be investigated by Samco.
Several northeasterly to north-northeast striking, slightly arcuate structures persist into the Cerro Cubilete zone, locally interacting with the corridor of more west-northwest striking structures and controlling local weak argillic alteration with rare Mn occurences.
Strong silver mineralisation has been identified at Cerro Cubilete in volcaniclastic rocks in the footwall of a north-northeast-trending fault, termed the Callan Fault by project geologists. The fault dips 30-45ºSE, and separates unoxidised tuffs and volcaniclastic sediments in the hangingwall from oxidised (grading downward to unoxidised) hydrothermally brecciated and altered lithic tuffs and ignimbrites in the footwall. These two sequences are referred to as the hangingwall and footwall sequences respectively. The fault trace is clearly visible on the surface as the eastern limit of iron oxide alteration and quartz veining. In drill-holes, it is recognisable as a zone of broken core extending over several metres. The boundary between oxidised, haematitic volcanics and the unoxidised hangingwall sequence is a sharp contact within the fault zone.
The Quebrada Fault, named because it coincides with a small, north-trending valley, is about 130 m west of the Callan Fault, and also strikes north-northeast, however its dip as interpreted from drill-hole fault intersections varies from 70ºW to 80ºE.
To the east of the Callan Fault, a west-northwest-trending fault termed the Lake Fault forms the boundary between ignimbrites on its northern side and rocks correlated with the hangingwall sequence to the south. Its continuation west of the Callan Fault has not been established on the ground, though the ground magnetics indicate its probable continuation westwards to Cerro de la Mina. The dry lake north of the Cerro Cubilete mineralisation conceals the northern extent of the Quebrada and Callan Faults and the western extent of the Lake Fault.
The west-northwesterly trending Cerro Cubilete-Cerro de la Mina structural corridor appears to be more weakly mineralised than the northeasterly Cerro Cubilete mineralisation, suggesting perhaps that more northerly striking structural features within the corridor were more dilatant or provided enhanced permeability to mineralising fluids. The sigmoidal form of the northeasterly veining and faulting at Cerro de la Mina supports the hypothesis of extensional features formed in response to dextral movement in the structural corridor. The Samco drilling, described in detail in Section 9 demonstrates that intense brecciation with an easterly dip and northerly strike hosts much of the stronger mineralisation at Cerro Cubilete.
A C A HOWE INTERNATIONAL LIMITED 21
6.4. MINERALISATION
Mineralisation at Cerro de la Mina/Cerro Cubilete comprises quartz brecciation, clay alteration, iron and manganese veining and breccia fill and barite veining. Cerro de la Mina was previously known as the Mina Iglesia and was the subject of minor exploratory pits in the past, reportedly targetting silver and/or manganese, though no details are available and production, if any, would have been insignificant. ACA Howe’s initial field visit confirmed the presence of numerous small excavations over a 250 m by 300 m area; grab samples collected by ACA Howe from various mineralisation types included quartz-barite veining with sulphides (DPPC-1), argillic alteration (DPPC-2), argillic-iron- manganese alteration (DPPC-3), and quartz veining to the south of the property (DPPC-4). The results are shown below in Table 3.
TABLE 3. ACA HOWE SAMPLING RESULTS AT CORINA
Au Ag As Ba Cu Fe Mn Mo Pb Sr Zn ppm ppm ppm ppm ppm % ppm ppm ppm ppm ppm DPPC-1 <0.01 3.0 122 >2000 51 >10.00 208 27 348 >2000 116 DPPC-2 <0.01 1.1 34 >2000 18 5.29 144 15 21 348 66 DPPC-3 <0.01 6.5 76 >2000 164 3.40 >20000 32 1934 34 251 DPPC-4 <0.01 <0.5 8 >2000 34 1.61 235 4 10 45 13
All of ACA Howe’s samples returned high barium. Samples DPPC1, 2 and 3, from the Cerro de la Mina area, also exhibit elevated silver and base metal values; manganese is highly elevated in DPPC- 3, as is lead, copper and zinc. Molybdenum is significantly enhanced. Sample DPPC-1 also shows highly elevated strontium, associated with the rich barite mineralisation observed at outcrop. Gold was below detection in all samples.
Samco’s geologists subsequently demonstrated that the mineralisation continues to the southeast into the Cerro Cubilete area on the adjacent Mercia licence. The Cerro Cubilete zone was identified during extensive rock-chip sampling by Samco which returned locally very high silver values ranging up to 4,700 g/t Ag. The Cerro Cubilete and Cerro de la Mina zones are presently the main focus of Samco’s exploration efforts on the Corina property. The descriptions in Sections 6.4.1 and 6.4.2 are derived largely from observations by Nick Callan supplemented by field observation by Samco geologists and the writer and observations on drill core by Samco geologists, Dave Shatwell, consultant to Samco, and by the writer.
Many common characteristics are shared by mineralisation in the Cerro Cubilete zone and Cerro de la Mina zone and indicate that they are part of the same general system. The ubiquitous halo of argillic- pyritic alteration affecting the entire strike length of the host structural corridor suggests further potential along the latter trend.
6.4.1. CERRO CUBILETE
At Cerro Cubilete an approximately 300 m long, north-northeasterly striking zone of silver values in selective rock chips averaging 243 g/t Ag occupies a broad low ridge-like feature that is marked by reddish weathering, earthy haematite alteration which partly overprints a green-clay or chloritic phase of alteration. The haematite alteration attains a width up to 80 m in its northerly part and progressively narrows at surface to the south. The known mineralisation lies within the same corridor of steeply dipping to vertical west-northwesterly striking faulting that continues to the northwest across Cerro de la Mina.
Mineralisation is closely coincident with a north-northeasterly-trending, shallow south-southeasterly to southeasterly dipping faulted contact between crackle brecciated ignimbrites and an overlying,
A C A HOWE INTERNATIONAL LIMITED 22
generally unaltered bedded tuff unit. This contact correlates with a strong chargeability high and resistivity low (Section 8) and is termed the Callan Fault. This may have formed an impervious cap to subsequent pulses of mineralisation.
In the northern part of the Cerro Cubilete zone, beneath the Callan Fault, mineralisation is characterised by numerous colloform-crustiform veins comprising greenish-grey to whitish chalcedonic silica and minor fine-medium grained granular crystalline quartz, locally with massive granular to bladed barite and variably developed banded to interstitial earthy red haematite. Locally spectacular silver grades (up to 4,700 g/t) are associated principally with north-northeast to northeast striking, sub-vertical to locally more shallow (25° to 30°), east dipping vein structures. An associated Ag- and Cu-bearing sulphide assemblage is now oxidised to haematite and subordinate goethite with local Cu-oxides. Silver values may report in part to the sulpho-salt pearceite (see below) encapsulated and locally still preserved in fine-grained silica.
The veins, together with spatially associated veinlet networks and minor hydrothermal breccias are particularly well-developed in the northern part of the zone within footwall ignimbritic breccia units, immediately west of the Callan Fault contact with overlying bedded tuffs. Typical vein widths are less than 30 cm though rare larger chalcedonic blocks up to 1m indicate that greater widths are locally attained. The discovery samples were collected from a series of large blocks of quartz up to 1.5 m wide, aligned in a northeasterly direction and indicative of a significant vein. Other float blocks in the area bear strong similarity to this vein. Scout drilling, described in Section 9 failed to intersect a vein with these dimensions and it is possible that the large vein dips parallel to the westerly directed holes. It is noted that the dip of the nearby, parallel Quebrada Fault varies between 70°W and 80°E.
Veins exposed at surface locally host minor goethite/haematite intergrowths after minor sulphides though goethite appears very subordinate to haematite. A grey, very sectile sulphide/sulphosalt phase noted within greenish-grey chalcedony veining may be acanthite. It is noted that polished section studies have identified pearceite, a silver sulphosalt with formula Ag16As2S11 but acanthite-argentite has not been identified in polished sections.
Base metal sulphides occur in oxidised breccia in drill core (Section 9). Wall-rocks adjacent to principal veins locally host minor veinlet networks and patchy, rather haematitic hydrothermal brecciation. Minor gold values intersected in drilling range between 0.1 g/t to 0.9 g/t Au with higher values occurring in the south of the zone.
Adularia is a common constituent of all mineralised sequences, indicative of an epithermal affinity; the combination of silver, base metals, barite, chalcedonic quartz and adularia may suggest intermediate sulphidation epithermal mineralisation overprinted by a low sulphidation episode, and the presence of barite-base metal, barite-fine grained sulphides, quartz+fine sulphide may suggest a telescoped system. While coarse galena-sphalerite occurs largely at deeper levels, these minerals also occur at relatively shallow depth. Coarse chalcopyrite occurs rarely. Finer-grained sulphides also occur as patches and aggregates, commonly associated with barite and appear to be a distinct replacement phase which is separate from the vein mineralisation.
Whilst minor veining and hydrothermal brecciation persist in the central and southern parts of the Cerro Cubilete zone, mapping in these areas has revealed several examples of banded silicification and associated haematitic alteration concordant with bedding in host tuffs in both footwall and hanging wall sections of the Callan Fault. A conspicuous argillic-goethite/haematite (after pyrite) alteration is developed principally within bedded tuffs overlying the mineralised contact zone, particularly where the latter is faulted in the northeast of the Cerro Cubilete zone. Small irregular pods of Mn-oxide (±goethite±haematite) occur within the variably argillised bedded tuffs forming the hanging-wall to the mineralisation and show both structural and more concordant stratabound control. This may represent late replacement-style mineralisation in the receptive tuff horizons, accessed via late fractures that penetrate the Callan Fault. Silver values in this stratabound mineralisation are lower than in the banded discordant vein style of mineralisation.
A C A HOWE INTERNATIONAL LIMITED 23
The mineralised zone appears to terminate to the south against a locally silicified, west-northwest striking, vertically dipping fault and sampling of weakly limonitic silicification and weak hydrothermal brecciation over widths less than 1 m on this structure returned only very low silver grades. However, ACA Howe notes that the mineralisation may actually be offset and downthrown by west-northwest faulting in this area as indicated by the geophysical surveys.
Some 350m east of the outcrop of Cerro Cubilete, subvertical quartz vein some 0.80 m thick strikes N13°E, parallel to the Cerro Cubilete mineralisation and has been traced for 250 m along strike. The vein is hosted by crystalloclastic argillaceous tuffs of the hanging wall sequence. Fine grained grey sulphide and disseminated pyrite cubes occur within the quartz. The quartz veining correlates with an IP anomaly (described in more detail in Section 8). Hydrothermal alteration comprising limonite with subordinate haematite and manganese oxides occurs in this area and also correlates with IP anomalies and is similar to the alteration observed at Cerro Cubilete and on the eastern flank of Cerro de la Mina. Outcrops and float in this area also exhibit remnants of slickensides, with associated silicification indicating faulting though directions are poorly known. These observations suggest potential for mineralisation within this area of the hanging wall sequence, and may indicate that late fracturing breached the impervious Callan Fault permitting later pulses of mineralisation to access the hanging wall sequence. The IP survey has been interpreted to indicate arcuate ring fracturing above a concealed intrusive and it is possible that stacked, mineralised fracture zones are present in this area which could cause repetition of the Cerro Cubilete mineralisation farther to the southeast.
6.4.2. CERRO DE LA MINA
The Cerro de la Mina sector occupies much of the northwest part of the Cerro Cubilete-Co Mina structural corridor, and comprises a broad zone of weak argillic alteration with associated goethite- haematite development, together with local west-northwest striking silicic structures, and numerous poddy Mn±goethite±haematite (±Ba) occurrences. Host lithology is variably crackle-brecciated quartz and feldspar-phyric ignimbritic tuffs. A broad halo of bleached to pale-yellowish-ochre weathering clay alteration, accompanied by goethite and haematite both as general staining of outcrops and as prominent seams and fracture coatings, overprints the sector. The ground magnetic survey reveals a broad, northwest striking magnetic low feature coincident with the halo of argillic alteration within the structural corridor, probably reflecting pyritisation and destruction of any magnetite by hydrothermal fluid movement in the host rocks.
Shallow pits and excavations in the Cerro de la Mina sector demonstrate small-scale historic exploitation of poddy Mn-oxides (and reportedly silver) developed on very discontinuous or short strike-length structures up to 0.9m wide and showing principally northwest and north-northeast to northeast striking, steeply dipping orientations within the west-northwest structural corridor. Local more shallowly dipping manganese partings occur within peripheral weak veinlet networks. Typically massive and compact to locally sooty Mn-oxides are accompanied by earthy goethite and haematite, with coarse crystalline barite gangue also locally present. Alteration comprises moderate to locally strong white clays including late, fracture-controlled, possibly supergene kaolinite. Microprobe studies identified adularia in gossanous material; this mineral is also seen in thin sections from Cerro Cubilete, accompanying carbonate and barite.
Lag sampling has identified significant, focused anomalies that include elevated Zn, Pb, Mo, Mn and Ba values and cover an area of 1 km in a west-northwest direction over a width of 350 m extending to the northwest from the Cerro Cubilete sector, though only gossanous material is exposed at surface (see Section 8.8).
Within the anomalous zone, subordinate northwesterly to west-northwest striking fault-controlled silicification includes fine-grained replacive chalcedony and locally more granular vuggy quartz with minor hydrothermal brecciation and weak to moderate patchy haematite and goethite development. Structures range from 20 m to 1 m in width and show strike continuity up to 200 m.
A C A HOWE INTERNATIONAL LIMITED 24
The geophysics conducted to date indicates that the mineralised system is open to the northwest and probably to the southeast. The IP survey has confirmed the continuity of a major zone of faulting across the full mapped extent of the prospect which closely follows linear areas of superficial oxidation that were examined by trenches, though the latter failed to penetrate beneath the colluvium in this area. The trenching and surface mapping by Samco has also identified sigmoidal veining and oxidised structures that appear to represent extensional zones within the major structural corridor; these correspond closely to further IP anomalies (see Section 8).
If the east-dipping Callan Fault has truncated the mineralisation at Cerro Cubilete, then this would suggest that the breccia zone in its footwall has been eroded away farther to the west in the Cerro de la Mina area, where deeper feeder structures would occur. Alternatively, if the fault is a pre-mineral cap to the mineralisation, fluids might have migrated up the volcanic stratigraphy without the need for any separate feeder structures. (See under ‘Deposit Types’ for further discussion).
6.4.3. MINERALISATION ELSEWHERE ON THE LICENCES
Several locations where Grasta samples returned elevated metal values have not been examined to date. Three samples in the centre of the Corina licence returned elevated arsenic values one of which returned a gold value of 0.4ppm and a silver value of 0.6ppm; these are contained in the western part of Sector ‘A’ below. The highest gold value of 0.7 ppm recorded in the Grasta sampling is accompanied by an arsenic value of 355ppm and is situated in the western part of the Corina property in the centre of an arcuate zone of veining in an interpreted rhyolite dome; this has not yet been visited by Samco geologists.
An area of alteration in the west of the Corina licence, interpreted from the satellite imagery to be similar to that at Cerro de la Mina, has yet to be visited and several rhyolitic domes interpreted from the satellite imagery and supported by the aeromagnetic survey have not been investigated. Significant areas of the major magnetic and structural linears that parallel the Cerro Cubilete-Cerro de la Mina mineralised corridor to the southwest have not been accessed to date, including a zone of west-northwest-trending structures to the immediate southeast of Sector ‘A’. Further west- northwesterly veining occurs within the southernmost structural corridor interpreted from imagery and regional magnetics in the extreme southwest of the Corina licence. A Grasta sample in this area returned high arsenic values.
All mineralised and exploration zones can be seen in Figure 2.
6.4.3.1. SECTOR ‘A’
Samco geologists have recently identified an area of mineralisation situated 2.3 km southwest of Cerro de la Mina, where quartz mineralisation is exposed intermittently over a strike length of 400 m as float trains and subcrops of quartz within rhyolitic tuff. Strike directions measured at outcrop are variable, ranging from N60°E in the southwest and N10°W. Float blocks comprise bladed calcite replaced with quartz. Adularia has also been observed in vughs. The mineralisation appears to be characteristic of the upper level of an epithermal system, and represents a strong target for future exploration. The satellite interpretation also identified west-northwesterly trending veining in the extreme west of the sector, close to a Grasta sample with high arsenic. Only five samples have been collected to date by Samco geologists but returned no significant values.
6.4.3.2. ANGELICA ZONE
The Angelica zone is situated in the southwestern part of the Mercia licence and comprises a northeast-southwest structural trend that has been traced for 2.2 km. In the southwest it forms a fault contact between welded tuffs and bedded tuffs and minor alteration is seen on outcrops flanking the zone to its immediate southeast. It coincides with an area of low magnetic susceptibility on the tilt
A C A HOWE INTERNATIONAL LIMITED 25
derivative image of the ground magnetic data. The fault swings to a more northerly trend on Mercia, though the quartz train sampled by Samco appears to lie some 200 m to the southeast of the interpreted fault trace along a parallel trend.
Within the southwestern part of the Angelica zone, a 250 m by 100 m zone of massive compact grey to brownish, weakly ferruginous silica is associated with float and minor outcrops of locally argillic (white-clay) altered fine-grained laminated tuffs and tuffaceous sediments. This appears to constitute remnants of a stratabound blanket of low temperature, palaeo-water table-controlled silicification, barren of precious metals. Local occurrences of weak structurally controlled silicification occur immediately west of this zone and some 700 m further southwest. In the southwestern and northeastern parts of the Angelica system, sub-outcrops of brecciated quartz and quartz float trains have been identified.
In the central sector of Angelica a 150 m x 50 m area of circular mounds of silica is interpreted to represent a hot spring deposit. Samples have returned negligible metal values, though this area could represent the very top level of an epithermal system and warrants additional work. A further 4.4 km to the northeast along the same structural trend a similar deposit has been identified. This may suggest a significant, high level exposure of an active hydrothermal system with potential for epithermal mineralisation at depth. Fifty-eight chip and float samples have been collected in the area; each sample represents an aggregated sample representative of one square metre.
6.4.3.3. MERCIA EAST
In the eastern part of Mercia, in an area of low relief, residual trains of quartz float are aligned sufficiently well to enable underlying veins to be inferred. Fifteen separate structures have been interpreted between isolated outcrops within an area of 400 ha. The azimuths of the structures range between 240º to 310º, with strike lengths between 60 m to 100 m and an average vein thickness of 0.60 m. The quartz exhibits a brecciated texture with whiteish to smoky gray quartz clasts and abundant iron oxide in a matrix of moderately banded and massive quartz containing brownish-gray veinlets.
The prospect is bounded to the north by two parallel northeast-trending, structurally-controlled ridges of silicified ignimbrite some 200 m in length. No significant metal values to date have been returned from outcrops along the ridges.
Figure 10 shows the work completed on the prospect. Further work including geophysical surveying is required to test the deeper potential of this area.
A C A HOWE INTERNATIONAL LIMITED 26
7. DEPOSIT TYPES
Mineralisation at Cerro Cubilete comprises chalcedony-dominated banded vein-like structures and associated stratabound replacement style silicic and sulphide mineralisation predominantly in oxidised tuffs in the footwall to the Callan Fault; this is a marked departure from the well-documented quartz- adularia or low-sulphidation type epithermal veins which typify many deposits and prospects in the Deseado Au-Ag metallotect, including many vein structures at the adjacent Cerro Moro Project. The mineralisation does however show some characteristics of more intermediate-sulphidation type epithermal mineralisation (e.g. banded to crustiform-colloform quartz-chalcedony veins, silicic and peripheral argillic alteration, barite gangue, bonanza silver grades, base-metal sulphides and a related manganese geochemical signature) though the ubiquitous presence of adularia may suggest overprinting by a low-sulphidation episode. Further detailed studies are needed to fully understand and characterise the mineralisation style and structural controls. There are certain similarities to the well-known Fresnillo area of Mexico where silver-base metal intermediate sulphidation epithermal veins, breccias and stockworks occur; the discovery outcrop at Fresnillo contained silver mineralisation in an oxidised stockwork and the majority of the veins and breccias are blind.
In the Cerro de la Mina sector, northwest, north and northeast striking Mn-oxide-goethite- haematite±barite mineralised structures (widths less than 1.0 m) are hosted within argillic-pyrite (goethite/haematite) altered, variable crackle-brecciated crystal-rich ignimbritic tuffs lying within the same broad west-northwest striking structural corridor as Cerro Cubilete. Sampling both of mineralisation exposed in pits, as well as west-northwest striking, silicified and hydrothermally brecciated structures (typically less than 1.0 m wide), has returned very few precious metal values of any significance though sparse silver values greater than 17 g/t Ag were returned from barite mineralised gossanous structures. Systematic lag sampling has identified a series of elevated gold values grouped along a northeast-trend at Cerro de la Mina that are currently under detailed investigation. Though marked differences in silver tenor clearly exist, the Cerro de la Mina area does share certain common features such as the presence of barite and manganese, argillic alteration and local silicification and a silver-dominated precious-metal component) with the Cerro Cubilete zone suggesting that the systems are very likely related or connected. Geophysical results suggest the presence of an intrusive body to the immediate southeast of Cerro Cubilete and the IP results suggest that arcuate anomalies coincident with mineralised structures at Cerro Cubilete represent annular fractures around the interpreted intrusive.
The Cerro Cubilete mineralisation is broadly hosted in permeable, brecciated rocks in faulted contact with overlying finely laminated tuffs and bears some similarities to the Navidad silver deposit in Chubut Province. The latter exhibits breccia hosted mineralisation and stratabound intermediate sulphidation mineralisation hosted by permeable tuffs beneath impervious carbonaceous sediments.
Comparisons can also be drawn with the San Cristobal silver deposits in Bolivia, where a first period of hydrothermal activity resulted in host rock alteration and deposition of iron oxide-siderite-barite veins containing silver minerals. This was succeeded by the intrusion of dacite porphyry stocks and associated uplift and deposition of dacite porphyry lava flows. A phase of faulting and intrusion of breccia pipes was followed by the deposition of dacite tuff and a second period of hydrothermal activity resulting in alteration and deposition of sulphide minerals (galena, sphalerite, and pyrite) with native silver and barite.
At Cerro Cubilete the current exploration model proposed by Dave Shatwell, consultant to Samco, suggests that the mineralisation involves early hydrothermal brecciation of the volcaniclastics, and introduction of Fe-oxide into the breccia matrix, both perhaps in response to a rhyolitic intrusion immediately to the east of Cerro Cubilete. The Callan Fault then placed the unbrecciated and unoxidised hangingwall volcanics adjacent to the brecciated, oxidised footwall sequence. Ag-Pb-Zn mineralisation was emplaced in the oxidised footwall rocks possibly from steep feeder veins or up dip along the base of the hydrothermal breccia immediately beneath the Callan Fault, which then acted as an impervious barrier to fluids. The fact that some of the highest silver grades occur in the immediate
A C A HOWE INTERNATIONAL LIMITED 27
footwall of the Callan Fault strongly suggests that the fault existed at the time the Ag-Pb-Zn mineralisation was emplaced. Thus the Callan Fault and its continuations to the north and south of the known mineralisation, beyond the limits of the west-northwest structural corridor, are strong exploration targets. The continuation of the west-northwesterly structural corridor beyond the known mineralisation and northeast-trending IP anomalies within the corridor also remain strongly prospective targets. The recently discovered northeast-trending quartz veining and alteration in the hanging wall sequence suggests potential for additional mineralisation to the east of the Cerro Cubilete zone.
ACA Howe concurs with this model, but also suggests that if the easterly-dipping Callan Fault presented an impervious barrier to the later stages of mineralisation, then Cerro de la Mina could represent a deeper part of the system exposed by erosion farther to the west of the overlying tuffs, Callan Fault trace and the breccias. The recent IP survey indicates the presence of arcuate fracturing in the vicinity of Cerro Cubilete and the magnetics suggest the presence of an intrusive body immediately east of the deposit around which elements of the west-northwesterly structural corridor appear to be deflected, though it is difficult to reconcile the easterly-dipping the Callan Fault with an intrusive in this area. Further drilling is required to detail the geometry of the deposits.
Typical vein-style epithermal mineralisation similar to that identified on Cerro Moro will also form an important exploration target elsewhere on the property; quartz veining has been identified at Angelica, Mercia East and Sector A and further work is planned in these areas.
8. EXPLORATION
Dr Jens Jasper visited the Deseado Massif on behalf of Samco in April 2009. He reported that surface showings on Corina within the Mina Iglesia small-scale workings confirm the potential for mineralisation on the property.
In late 2009-2010, Samco commissioned ACA Howe to conduct a GIS compilation and detailed satellite imagery interpretation of the Corina licence. This resulted in the production of geological maps with structural interpretation and the delineation of areas of alteration which identified a number of targets that merited further investigation. The interpretation was subsequently expanded to cover the Mercia licence.
A brief description of each of the interpreted targets is given below in Table 4, together with associated structures and any other feature which enhances its importance, as shown in Figure 8. The targets are listed in the order they were observed during the interpretation and have not been prioritised.
A similar procedure was followed for the Mercia permit. The ASTER data was re-processed to generate a new series of ratio images designed to identify any argillic, iron or silica to aid the search for mineralisation (all possible avenues were explored). The results proved to be disappointing on the Mercia permit outside of the Cerro Cubilete area. Three additional areas of potential argillic alteration were recorded close to the eastern margin of the permit though two of these are outside the property. There may be two reasons a) there are no alteration minerals in this area or b) the area was scoured when the cemented terrace gravels which cover large parts of the area were deposited. The modern surface is close to the paleo-surface on which the gravels were deposited and it is noticeable that many of the gullies and linear channels are choked with debris derived from the erosion of these gravels.
The interpretation maps are shown below, and also show the sample sites visited by Grasta that are described in detail in Section 5.1.
A C A HOWE INTERNATIONAL LIMITED 28
ACA Howe visited the Corina licence on behalf of Samco in 2010 to conduct ground truthing of the imagery interpretation and examine access routes, logistics and infrastructure on the licences. Time constraints due to short daylight hours and remoteness of the properties restricted ACA Howe’s visit to a brief examination of the licence area and only limited sampling was possible. However the presence of mineralisation was confirmed on Corina in the Cerro de la Mina area where the surface exposures demonstrated significant alteration and barite veining. The access route also traversed the Mercia licence, though this was not part of the Samco portfolio at that time.
TABLE 4. SUMMARY OF PROPOSED TARGET AREAS IN THE CORINA PERMIT - ACA HOWE SATELLITE IMAGERY INTERPRETATION - 2010 Number Criteria Comments 1 Visible iron staining associated with iron oxide alteration These features occur in the feature vicinity of the known mineral 2 Resistant outcrop of possible quartz vein or silicified fault veins associated with small with iron alteration artisanal workings at Cerro de la 3 Resistant outcrop of possible quartz vein or silicified fault Mina and the alteration at Cerro with iron alteration Cubilete 4 Resistant outcrop of possible quartz vein or silicified fault Close to permit boundary 5 Resistant outcrop of possible quartz vein or silicified fault Close to permit boundary 6 Resistant outcrop of possible quartz vein or silicified fault Close to known vein 7 Group of veins or dykes with possible disturbed ground Resistant outcrop of possible quartz vein or silicified fault, This group is associated with 8 with iron staining possible dykes or veins, but 9 Group of dykes or veins on mound there are no alteration features 10 Similar mound feature to 9 11 Group of fractures and possible dykes or veins 12 Group of dykes or veins This group comprises clusters of 13 Group of dykes or veins possible veins or dykes but 14 Group of dykes or veins without any indications of iron 15 Group of dykes or veins or quartz 16 Group of dykes or veins 17 Zone of iron alteration Iron alteration close to known 18 Zone of iron alteration vein Zone of iron alteration Close to known vein but just 19 outside permit 20 Zone of iron alteration Close to possible dykes or veins
TABLE 5. SUMMARY OF PROPOSED TARGET AREAS IN THE MERCIA PERMIT - ACAHOWE SATELLITE IMAGERY INTERPRETATION - 2011 Number Criteria Comments 17 Possible area of iron staining 18 Small group of parallel veins 19 Argillic alteration 20 Argillic alteration 21 Argillic alteration 22 Structural corridor between long faults at boundary of horst block in Chon Aike formation 23 Group of veins oriented NNW close to major fault 24 Small group of NNW trending veins 25 Small group of parallel veins close to major fault
A C A HOWE INTERNATIONAL LIMITED
30
8.1. EXPLORATION BY SAMCO
To date Samco has conducted rock chip sampling, a ground magnetic survey, detailed geological mapping, trenching, scout drilling, Induced Polarisation (IP) and lag surveys on the licences. Figures 9 and 10 show the location and type of sampling completed. A preliminary campaign of core drilling on the Cerro Cubilete prospect has also been conducted.
8.2. ROCK CHIP SAMPLING
The majority of rock chip samples to date have been collected from outcropping veins and float identified during reconnaissance traverses across the area. Because of the irregular distribution of outcrop it was not generally possible to conduct systematic channel sampling on structures encountered during this early work, though wherever possible, rock chip samples were collected perpendicular to strike across the full exposed width of the veins. Several were taken along the strike if the exposure warranted. More recently, following identification of anomalous zones, outcrops have been cleaned and more systematic channel sampling has been conducted on a number of structures.
Samples were collected from outcrops using a hammer and chisel. The dips and strikes of the outcrops were noted and a brief description of the sample was recorded; positions were established using hand-held GPS units. Float samples were collected from blocks and reduced to hand specimen size. Location and type were recorded. The samples were placed in plastic bags, and a label was placed inside the bag, which was then sealed. A permanent marker was used to mark the outside of the bag. Batches of samples were sealed into polypropylene sacks, stockpiled at the field office and submitted in batches to the assay laboratory. ACA Howe is satisfied that the samples were as representative as possible for reconnaissance purposes and that sample security was adequate. The more recent, systematic sampling on cleaned outcrops is representative of those outcrops.
8.2.1. CERRO CUBILETE
An initial reconnaissance visit to Corina by Samco geologists led to the discovery of the Cerro Cubilete mineralisation. This zone of quartz float and occasional northeasterly-trending quartz veins ranging from 10 cm to 1 m in width, is exposed within and adjacent to extensive haematite alteration within a northeast trending area some 300 m long, 80 m wide at the north and narrowing to 30 m in the south. All geochemical sampling completed by Samco at Cerro Cubilete is shown on Figure 9. The initial forty-four outcrop samples averaged 268g/t Ag, while float samples ranged between 162 and 4,686 g/t Ag. Further rock chip and float sampling beyond the discovery area indicated an extensive zone of mineralisation that continued in a northwesterly direction to Cerro de la Mina. The zone was considered sufficiently well defined to warrant early scout drilling, reported in Section 9.
Recent reconnaissance 350 m to the southwest of the southernmost drill section at Cerro Cubilete has identified outcrops of silicification and quartz veining with haematite, breccia, saccharoidal quartz and associated barite. Angular float blocks of light to dark gray quartz up to 0.5 m occur within the zone. The outcrops and float are intermittently exposed within an area some 60 m long and 15 m wide, elongated in a west-northwest direction, over a 15 m width. The host crystalloblastic tuff is brecciated close to the veins and strongly stained with haematite. Nine vein and float samples have returned an average of 69.3 g/t Ag; one float sample returned a gold value of 0.11g/t Au. These samples fall at the intersection of northeast and northwest-trending IP anomalies. Further work is required to fully determine the geometry of the mineralisation, which strongly resembles the mineralisation in the main Cerro Cubilete zone but occurs southwest of the fault initially assumed to terminate the mineralisation. In addition, a number of lag samples in this area have returned anomalous gold values.
A C A HOWE INTERNATIONAL LIMITED 31
Table 6 shows the number and type of samples collected to date.
TABLE 6. SAMPLING COMPLETED BY SAMCO ON CERRO CUBILETE Rock Chip Channel Float 521 108 205
8.2.2. CERRO DE LA MINA
In the Cerro de la Mina prospect area, initial rock chip samples were collected from outcrops and float encountered during reconnaissance traverses across the area. A significant structure comprising a 200 m long, west-northwest trending breccia zone with iron oxide and barite was identified in the southwest part of Cerro de la Mina and nineteen samples, around 10 m apart, were collected from the intermittently exposed zone. Two samples returned silver values of 15 g/t and 73 g/t respectively and the remainder returned lower than detection limit silver. The samples were collected where possible across the full width of the partially exposed structure though the total width of the structure could not be established. Sporadic gold values up to 0.17 g/t and a single spot silver value of 7.7 g/t were returned from this structure. The highest gold value of 0.26 g/t was associated with the 73 g/t Ag assay; the sample also returned base metal values of 319 ppm Mn, 63ppm Zn and 260 ppm Pb.
Elsewhere in the prospect area, several randomly distributed reconnaissance samples returned higher than the upper detection limit of 1% Pb, Zn values ranged up to 0.3% and copper ranged up to 0.17%. Three samples averaged 12 g/t Ag, but below detection gold. A float sample returned 0.15g/t Au, but below detection limit silver. Ten samples contained manganese greater than the upper detection limit of 2%. Molybdenum ranged up to 405ppm.
In the the far southeast of Cerro de la Mina, adjacent to the lake, initial grab sampling of crackle breccia with barite and haematite and subordinate limonite associated with west-northwest faulting returned 298 g/t Ag. Subsequently, three contiguous 0.5 m chip channel samples were collected across a cleaned, partially exposed section of the breccia and averaged 185 g/t Ag.
More recent reconnaissance rock chip sampling has returned four gold values of 0.2-0.25 g/t at Cerro de la Mina. The corresponding silver values are all below 6 ppm, whereas similar or higher gold values in samples from Cerro Cubilete are associated with much higher silver values. Lag sampling has also identified significant gold values in the northeast of the survey area associated with a strong IP anomaly (see sections 8.7 and 8.8).
The most recent work in the Cerro de la Mina area has involved systematic channel sampling of the anomalous outcrops identified in the reconnaissance work. Results from Cerro de la Mina were received and reported anomalous values in Pb, Zn, Mn, Ba, Cu plus low silver values up to 10.84g/t. Gold values were below detection limit. The results in the northeast sector of Cerro de la Mina confirmed higher values than previously thought and are located coincident with the inferred and mapped west-northwest Lake Fault.
Figure 9 shows the distribution of the individual samples.
A C A HOWE INTERNATIONAL LIMITED
34
8.2.3. OTHER AREAS
Reconnaissance traverses were also conducted on the Angelica, Mercia East and Area ‘A’ and a few anomalous samples were returned from rock chip sampling of float and outcrop.
8.2.3.1. ANGELICA
Sampling of float and local outcrop in the Angelica area has returned only isolated weak gold values and no significant silver has been reported to date. In the southwestern and northeastern parts of the Angelica system, sub-outcrops of brecciated quartz and quartz float trains have been identified. Samples collected to date have returned no significant values in gold or silver, though arsenic anomalies have been identified.
8.2.3.2. MERCIA EAST
A sub-vertical, northwest-striking quartz vein returned gold and silver values of 0.5g/t Au and 2.41 g/t Ag and 0.4g/t Au and 422.95 g/t Ag from rock chip sampling and scattered anomalous zinc and arsenic values were also returned.
8.2.3.3. AREA ‘A’
Only five samples have been collected. Results were received as commented on in Section 6.4.3.1.
A C A HOWE INTERNATIONAL LIMITED FIGURE 11: ROCK CHIP AND FLOAT SAMPLES SHOWING Ag PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 12: ROCK CHIP AND FLOAT SAMPLES SHOWING Au PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 13: ROCK CHIP AND FLOAT SAMPLES SHOWING Pb PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 14: ROCK CHIP AND FLOAT SAMPLES SHOWING Zn PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 15: ROCK CHIP AND FLOAT SAMPLE RESULTS (Ag PPM) FROM THE MERCIA EAST EXPLORATION AREA: SANTA CRUZ , ARGENTINA FIGURE 16: ROCK CHIP AND FLOAT SAMPLE RESULTS (Au PPM) FROM THE MERCIA EAST EXPLORATION AREA: SANTA CRUZ , ARGENTINA FIGURE 17: ROCK CHIP AND FLOAT SAMPLE RESULTS (Pb PPM) FROM THE MERCIA EAST EXPLORATION AREA: SANTA CRUZ , ARGENTINA FIGURE 18: ROCK CHIP AND FLOAT SAMPLE RESULTS (Zn PPM) FROM THE MERCIA EAST EXPLORATION AREA: SANTA CRUZ , ARGENTINA 43
8.3. GROUND MAGNETIC SURVEYS
In 2012, following the discovery of the mineralisation, Samco commissioned Quantec Geoscience Argentina S.A. to conduct a ground magnetic survey over a significant part of the Corina licence. The area covered includes the known mineralisation at Cerro de la Mina and its potential extensions to the southeast to Cerro Cubilete and adjacent areas in the Mercia licence. The Angelica zone was also included in the survey. The western part of the Corina licence, which contains a number of satellite imagery targets and significant Grasta sampling results, and the Mercia East areas were not covered.
A GEM-GSM-19 magnetometer was used as a mobile unit and automatically took a reading every second along the traverses. A base station enabled diurnal variations to be monitored and the data set was adjusted accordingly. 100 east-west traverses 50 m apart were surveyed for a total of 328.9 line km, covering an area of some 16.24 km2. The data were processed using Gemlink and Geosoft software to produce Total Field, Vertical Derivative, Reduced-to-Pole, Tilt Derivative and Analytical Signal plots (Figures 19 to 23).
The Tilt Derivative plot closely reflects the structural mapping and defines a continuous northwesterly feature, offset to the south in the vicinity of the Cerro Cubilete mineralisation and continuing to the southeast and northwest. A north-south trending demagnetised feature corresponds with the mineralised outcrops and continues northward to the edge of a shallow, ephemeral lake which lies immediately north of Cerro Cubilete, where the survey obviously terminates. To the south, the feature appears to step to the east and may continue towards an east-west magnetic linear. Weaker parallel structures occur and more southerly splays are evident. A weaker linear feature can be identified on the southwestern continuation of the Callan Fault, correlative with an IP anomaly. At the southwestern end of the latter anomalies, 1 km southwest of the known Cerro Cubilete mineralisation, pitting exposed manganese, iron and clay alteration and barite. Sampling returned 4 and 7 ppm Ag, 656 ppm and 773 ppm Zn, 138 and 161 ppm Pb and 677 and 450ppm Cu. Barium and manganese were over the upper analytical limits of 2,000ppm Ba and 20,000ppm Mn respectively. Molybdenum values of 34 and 32ppm Mo were also returned. This geochemical signature is very similar to that of Cerro de la Mina.
Figure 22 is an RTP image for the Cerro de la Mina and Cerro Cubilete areas. The figure also shows inferred structures based on the tilt derivative image and other data, as well as the silver and molybdenum anomalies at Cerro Cubilete and a molybdenum anomaly at Cerro de la Mina. Features to note on Figure 22 include:
A large demagnetised area is seen on the plot, coinciding with argillic alteration interpreted by ACA Howe from enhanced Landsat imagery. A complex zone in which west-northwesterly (295°) and north-northwesterly (330°) structures intersect. This zone appears to focus the altered/demagnetised area defined by the magnetics and Landsat imagery. A molybdenum anomaly from rock chips lying along an inferred structure at Cerro de la Mina. Relationship of silver mineralisation and anomalous molybdenum at Cerro Cubilete to inferred structures and alteration.
A C A HOWE INTERNATIONAL LIMITED GAUSS KRUGER FIGURE 19: TOTAL FIELD GROUND MAGNETIC SURVEY - CAMPO INCHAUSPE ZONE 2 CORINA AND MERCIA LICENCES: SANTA CRUZ, ARGENTINA (QUANTEC, 2012) GAUSS KRUGER FIGURE 20: VERTICAL DERIVATIVE GROUND MAGNETIC SURVEY - CAMPO INCHAUSPE ZONE 2 CORINA AND MERCIA LICENCES: SANTA CRUZ, ARGENTINA (QUANTEC, 2012) GAUSS KRUGER FIGURE 21: TILT DERIVATIVE MAGNETIC IMAGE - CORINA AND CAMPO INCHAUSPE ZONE 2 MERCIA LICENCES: SANTA CRUZ, ARGENTINA (QUANTEC, 2012) GAUSS KRUGER FIGURE 22: REDUCED TO POLE MAGNETIC IMAGE - CORINA AND CAMPO INCHAUSPE ZONE 2 MERCIA LICENCES: SANTA CRUZ, ARGENTINA (QUANTEC, 2012) GAUSS KRUGER FIGURE 23: ANALYTICAL SIGNAL PLOT - CORINA AND MERCIA CAMPO INCHAUSPE ZONE 2 LICENCES: SANTA CRUZ, ARGENTINA (QUANTEC, 2012) 49
Callan (2011) notes that the magnetic response of the southwestern quadrant of the surveyed area has a ‘spongy’ appearance, probably due to the presence of scattered disseminated magnetite in the veneer of tuff overlying ignimbrites that are exposed in local windows. The northeasterly faulting that characterises this area is reflected in a distinct orientation of the magnetic response.
To the immediate east of Cerro Cubilete, a circular feature may indicate the presence of a buried intrusive unit or flow dome structure and the linear magnetic lows appear to be deflected around this feature. IP anomalies also display an arcuate form in this area.
The Angelica zone is only partially covered by the magnetic survey but appears to correspond to an extensive, northeast-trending linear magnetic low feature on the total field and tilt derivative maps.
The magnetics provide a focus for further exploration in the Cerro Cubilete-Cerro de la Mina area. The alteration, geochemical anomalism, and barite mineralisation at Cerro de la Mina might be explained by a buried intrusive or dome coincident with the demagnetised area, with the silver mineralisation at Cerro Cubilete on its margins. Samco plans to conduct 3-D modeling of the magnetic data.
8.4. DETAILED GEOLOGICAL MAPPING
In June 2012, Samco engaged consultant N.J. Callan to map the area of mineralisation and its immediate surroundings. The mapping was conducted at a scale of 1:5000. Callan’s work demonstrated that the mineralisation appears to be controlled by a major west-northwest structure, intersected by northeasterly faulting at Cerro de la Mina and Cerro Cubilete. Samco geologists subsequently conducted mapping at 1:2000 scale over the Cerro de la Mina-Cerro Cubilete area. The results of these surveys are described in detail in Section 6 above, which detail the lithologies, structures and mineralisation encountered.
The subsequent work by Samco geologists has refined the mapping and interpretation.
Samco’s geologists also mapped the Mercia East area at 1:2000 scale.
A C A HOWE INTERNATIONAL LIMITED N
Units Alteration Structure/mineralisation Quartz vein Alluvium Silicification 5 metre contour lines Inferred quartz vein MERCIA EAST GEOLOGICAL MAP Tuff (Chon Aike Formation) Ferruginisation Ignimbrite (Chon Aike Formation) Secondary quartz vein/veinlets Samco Gold Ltd Tuff outcrop Float Faults December 2011 Ignimbrite outcrop Rhyolite Subhorizontal 9 to 81 degree dip Subvertical
FIGURE 24: SAMCO GOLD GEOLOGICAL MAPPING OF MERCIA EAST 51
8.6. TRENCHING AND PITTING
Samco geologists have conducted trenching and pitting at Cerro de la Mina, Cerro Cubilete and the Mercia East prospect. At Cerro Cubilete and Cerro de la Mina, sampling was highly selective and comprised chip channel samples taken across the full exposed width of silicified or visibly altered areas, though wall rocks to the alteration were not tested. No maps of the trench walls were made, though structural features associated with samples were noted. The trench samples cannot be regarded as representative of the mineralised zones sampled, and the lack of geological mapping precludes the assessment of the bulk potential of the areas sampled.
8.6.1. CERRO DE LA MINA
At Cerro de la Mina, a series of eight manually excavated prospecting pits exposed several northeast- trending manganese oxide/iron oxide/barite/clay altered structures within the host tuff with associated silver and base metal anomalies, suggesting that the mineralisation exposed in the area represents a potential gossan zone, possibly related to poly-metallic Ag/Pb/Zn mineralisation at depth. The trends were confirmed by 31 mechanically excavated trenches totaling 1,152.92 m, which demonstrated that the structures are laterally continuous and arcuate, trending from northerly to northeasterly across the prospect area. These probably represent extensional features related to dextral shearing in the west- northwest structural corridor. A second set of structures with a west-northwest or northwest azimuth is characterised by iron oxide/manganese oxide/ kaolin alteration and occasional silica replacement and minor crystalline quartz veinlets. Figure 25 shows the distribution of the pits.
Selective sampling focused on iron oxide/manganese alteration, silicification and argillic alteration.
While the surface rock chip sampling and the alteration features revealed by the pits and trenches suggest that Cerro de La Mina is genetically related to the mineralisation at Cerro Cubilete, the results may indicate a series of discrete veins with gossanous alteration close to surface, equivalent to a deeper level of exposure of the overall system.
Nineteen samples representative of various types of alteration were collected from the structures exposed in the trenches for microprobe studies to determine whether the gossanous zones represent oxidised polymetallic mineralisation. A Carl Zeiss NTS SUPRA 40 electron microscope was used to examine the samples. Each 5 gm sample of gossan material was dried for 72 hours. The samples were then mounted on carbon film and introduced into the vacuum chamber of the microscope, photographed at two or more different scales and the chemistry of the samples was recorded. While no primary base metal sulphides were identified, oxidation products after indeterminate metal sulphides were confirmed and adularia was identified, suggestive of low sulphidation epithermal mineralisation.
8.6.2. CERRO CUBILETE
At Cerro Cubilete, fifteen trenches totaling 1,008.96 m were excavated by hand at 25 m intervals across the outcrop of the mineralised contact zone. Any silicification or veining intersected in the trenches was to be sampled and structural trends were to be measured. No samples were collected between the veins, so the results are only representative of the veining and there is no information on grades of intervening wall rocks. Only four of the trenches, in the north of the area intersected mineralisation in the form of crackle breccia while the remainder encountered progressively deepening iron stained overburden to the south that often contained mineralised float. The trenches were extended east across mapped laminated tuffs of the hanging wall sequence; one of the latter intersected a 30 cm quartz vein with strong haematite alteration trending N20°E in the hanging wall sequence. Within the same trench a second 30 cm haematised quartz vein was intersected trending N15°E. The trenching essentially confirmed the geological mapping.
A C A HOWE INTERNATIONAL LIMITED 52
Five trenches were excavated across the west-northwest trending Lake Fault that was assumed at the time to represent the northern border of the mineralisation. The overburden in the Lake Fault trenches proved to be very deep and no silicification was intersected in these trenches, so no sampling was conducted.
8.6.3. MERCIA EAST
A total of 171 surface samples, including float and rock chips, were initially collected from Mercia East. Anomalous gold values of up to 0.05ppm and an isolated silver grade of 32ppm were reported from quartz vein outcrops.
Subsequently, a 50 ha area in the eastern sector of Mercia (Mercia East) was investigated by 18 trenches totalling 1.4 km. The programme was designed to test the continuity of known mineralised and previously sampled structures on surface, and to explore for possible blind and shallow structures below the float trains identified and sampled in the 2011 and 2012 campaigns, within lower topographic areas.
The trenches were excavated using a back-hoe. The trench azimuths were dictated by the geological exposures and vein directions and ranged between 330º to 45º. The average depth of the trenches was 0.5 m and their lengths ranged between from 14 to 720 m.
Following geological mapping, the trenches were sampled selectively; chip channel samples were collected across veins, silicification and alteration zones using a chisel and hammer. The sampling was based on geological criteria and ranged between 0.10 m to 1 m in length with an approximate width of 0.10 m. The chip channel samples were collected on clean plastic sheets placed at the bottom of the trenches, then sealed into plastic bags, each containing a sample tag. The outside of each bag was labelled with a permanent marker. No standards or blanks were included with sample batches. One hundred samples were collected in total.
A series of vertical and sub-vertical quartz vein and veinlets up to 0.30 m in width, striking between 240º to 310º, and dipping northwest to northeast were identified, with kaolinitic, hydrothermal alteration and iron oxide in the vein selvages.
The assay results reported anomalous gold values of up to 0.54g/t Au and silver values up to 3g/t. Up to 242ppm As, 94 ppm Sb and 1ppm Hg were also returned.
Based on quartz textures identified, geochemical results and mineralogical features, the mineralisation located to date in Mercia East probably reflects a high level of an epithermal system and is a strong target for additional exploration. This should include geophysics to investigate the system at depth. Lag surveying should be conducted in the area to identify concealed mineralisation.
A C A HOWE INTERNATIONAL LIMITED
N
Surface Samples - Au ppm
FIGURE 27: SAMCO GOLD TRENCH SAMPLING IN THE MERCIA EAST AREA 56
8.7. INDUCED POLARISATION SURVEY (IP)
On April 30th, 2013, Samco commenced a programme of gradient array induced polarisation geophysics over Cerro de la Mina and the area to the south of Cerro Cubilete (Figure 28), with the additional option of selected lines of pole-dipole I.P. subject to results of the gradient array. These programmes were designed to more closely define the Cerro de la Mina geochemical and magnetic anomaly, and to provide support for drilling to the south of Cerro Cubilete.
The survey was conducted by the Instituto de Reccursos Minerales, (INREMI), an organization connected to the Universidad Nacional de La Plata. It covered an area of 2 km2 that included the Cerro de la Mina and Cerro Cubilete and possible extensions to the south. Instrumentation included a Zonge Engineering CGT-3 transmitter powered by a generator. A Scintrex IPR-12 receiver was used to measure the response. Data were downloaded to a PC and spurious results were filtered out of the database.
The programme included an east-west grid with 50 m line spacing in the north sector (Cerro de la Mina) and 100 m in the south sector- lines were from 600 m to 800 m long and totalled 34 line km. Current electrodes were 1,200 m apart.
Six gradient lines were subsequently added to the programme, four of which were located at Cerro Cubilete and two situated immediately at the south of Cerro Cubilete. The objective was to characterise anomalies over known mineralisation and to investigate the continuity of the zone towards the south.
Several gradient anomalies were surveyed using a pole-dipole array to investigate the anaomalies at depth. 4 km of profiles were completed using 50 m potential electrode spacing and 100 m between the potential electrode and the proximal current electrode. The data were processed using RES3DINV (Geotomo) software which produced 3D and 2D images of resistivity and chargeability compensated for topography. The initial set of pole-dipole sections was located in the Cerro de la Mina area and extended to the west. The second set was situated at the southwestern end of Cerro Cubilete.
A further survey was conducted to the southeast of the original grid to explore for continuations to the Cerro Cubilete mineralisation. An area of 55 ha was surveyed using the gradient array on 12 lines for a total of 12 line km on lines with 50 m separation. Two line km of pole-dipole surveying was also conducted. Survey parameters were the same as Phase 1. Figure 28 also shows the second phase gradient lines.
A C A HOWE INTERNATIONAL LIMITED
58
8.7.1. RESULTS
Geologists from INREMI surveyed seventeen geological profiles over the survey area to assist the interpretation. The IP results indicated no strong chargeability responses indicative of disseminated pyrite associated with hydrothermal alteration. However, the main mineralisation at Cerro de le Mina was shown to be restricted to the eastern part of the prospect where veins of quartz and oxides of iron and manganese occur.
Four principal chargeability anomalies were identified, of which two, numbered A1 and A2 on Figure 29, coincide in part with outcropping veins. ACA Howe notes that mineralised structures identified in trenching and mapping by Samco in the northern parts of anomalies A1 and A2 correlate well with the anomalies to the south, but swing to a more northeasterly trend in the north, apparently cross-cutting the IP anomalies. Examination of the IP maps suggests that the anomalies could be interpreted differently in this area, and that a more northeasterly trend coincident with the known mineralisation can be identified in this area.
The resistivity anomalies associated with chargeability anomalies A1 and A2 tend to be offset slightly to the east of the chargeability anomalies and assuming that the latter represent fracture fill, the resistivity response may reflect wall rock silicification in the hanging wall of the gently east dipping veins. Farther south, anomalies A3 and A4 are associated with lower resisitivities suggesting that the wall rocks are not silicified. Anomalies A5, A6 and A7 strike to the northeast, subparallel to the Cerro Cubilete mineralisation. The pole-dipole results suggest that Anomalies A1 and A2 extend to at least 150 m depth, while those farther to the south appear to extend to only 50 m depth.
The second phase survey extended most anomalies to the south and identified several new, potentially mineralised features.
Anomaly A1 was shown to continue a further 600 m to the south for a total length of 1,600 m. The chargeability is in excess of 15mV/V. Variable resistivities are noted along strike, usually high but across the valley immediately west of Cerro Cubilete outcrop resistivities are lower. The pole-dipole results suggest that the feature extends to at least 200 m depth, with a slight easterly dip proximal to the Cerro Cubilete zone. It is noted that gold anomalies in rock chip and lag samples are clustered around the most intense parts of this anomaly, where it has a northerly trend and intersects the trace of the west-northwesterly structure that bounds the Cerro Cubilete-Cerro de la Mina structural corridor. Anomaly A9, situated to the east of Cerro Cubilete, has a strike length of 900 m, striking north-northeast in the north and swinging to a north-northwest trend in the south. This is interpreted to represent a fault zone containing chargeable material and the anomaly lies on the northeastern extension of a fault mapped by N Callan. Recent reconnaissance by Samco has found clay and Fe oxide alteration and a quartz vein trending north-northeast coincident with anomaly A9. Three rock chips taken from this alteration contained no detectable gold or anomalous values in other elements except Mn. Anomaly AC2 extends for 800 m and may represent a fault zone. No mineralisation is exposed at surface. Both A9 and AC2 are of interest as they have a similar strike to the known Cerro Cubilete mineralisation and may represent parallel, stacked blind zones of mineralisation. While the fault associated with A9 is exposed within the barren hanging wall sequence above the Callan fault, it is a strong feature and extends to at least 100 m depth and may represent a breach through the hanging wall. Anomalies A9 and AC2 appear from the pole-dipole results to extend to a depth of 100 m and appear to be vertical. Their curved shapes also suggest that they may represent annular fractures around a buried intrusive to the east of Cerro Cubilete; the magnetic results also suggest a possible intrusive in this area, though the interpreted easterly dip of the Callan Fault is difficult to reconcile with an intrusive to the east of the mineralised zone. Further work is required to refine the structural and mineralisation model in this area.
A C A HOWE INTERNATIONAL LIMITED 59
At Cerro Cubilete, the principal anomalies strike north-northeast and appear as discontinuous features on Figure 29. The anomalies are open to the southwest beyond the survey area, and tend to be associated with zones of high resistivity that reflect the silicification known from drilling. The chargeability results suggest at least two separate linear structures, the northernmost of which (AC1) correlates closely with the known mineralisation intersected in drilling, while the second may represent a blind, subparallel zone of mineralisation about 100 m to the southeast of the first. A third resistivity anomaly is located a further 100 m to the southeast, though there is only a weak chargeability expression in the northern part of the anomaly (Figures 29 and 30).
A C A HOWE INTERNATIONAL LIMITED Metres
FIGURE 29: COMBINED CHARGEABILITY RESULTS FROM PHASE 1 AND PHASE 2 Metres
FIGURE 30: COMBINED RESISTIVITY RESULTS FROM PHASE 1 AND PHASE 2 62
8.8. LAG SAMPLING
Lag geochemistry aims to detect metal anomalies by separating heavier or coarser surface material such as pisolites or quartz fragments from finer-grained exotic components such as volcanic ash from recent eruptions, wind-blown material, etc. It is considered a particularly effective method in Patagonia where both recent ash and wind-blown dust are commonly present.
Samco initially conducted a lag survey comprising 23 east-west lines 100 m apart, sampled every 25 m. The survey covered essentially the same area as the IP survey. Two reference lag samples were taken over known silver mineralisation at Cerro Cubilete. They assayed 124 and 100 ppm Ag, thus supporting the effectiveness of the method.
At every sample site material within a 5 m diameter area was collected using a brush and shovel. The material was sieved through a 19 mm sieve and the fraction retained on a 3 mm sieve was bagged and marked and sealed after removal of organic fragments. This resulted in a sample of approximately 2 kg. The samples were transported to the field camp and batches of 5 samples were sealed in polypropylene sacks. One international standard was inserted in every batch of 20 samples, i.e. one every four sacks.
A total of 746 samples were collected in this phase and assayed for silver, gold and 39 elements, including lead, zinc and copper by ICP.
8.8.1. LAG RESULTS
Silver anomalies: Figure 31 shows the distribution of silver on the lag grid. Values between 2 and 52 ppm are widely distributed across the grid; values above 52 ppm are restricted to the samples which also contain anomalous gold shown in Figure 32, and to the area of known silver mineralisation at Cerro Cubilete.
Gold anomalies: A cluster of three lag samples at Cerro de la Mina immediately west of a shallow ephemeral lake returned Au values above 1 ppm (Figure 32): • 10.2 ppm Au, 170 ppm Ag • 7.1 ppm Au, 154 ppm Ag • 4.7 ppm Au, 43 ppm Ag
These three anomalous samples are 800m northwest of existing drill-holes at Cerro Cubilete, and occur in an area of chargeability anomalies recorded in the I.P. survey.
Two other lag samples returned anomalous gold values above 1 ppm: • 6.7 ppm Au, 94 ppm Ag • 4.9 ppm Au, 53 ppm Ag
These two samples are 700 m west and 1.3 km south of the three anomalous samples west of the lake.
Anomalous gold values have also been recorded in rock chip samples and drill-core at Cerro Cubilete. Known mineralisation at Corina comprises base metal sulfides ± Ag, but Au-Ag veins similar to those which occur in the adjoining Cerro Moro property may also be present. The association between the Au-Ag lag anomalies and a prominent chargeability feature is regarded as encouraging. The sample that returned 6.7g/t Au is situated above a northwest-trending fault that traverses a limestone outcrop.
Pb and Zn anomalies: Figures 33 and 34 illustrate the distribution of lead and zinc values on the lag geochemistry grid. Lead values above 250 ppm Pb are strongly clustered in the Cerro de la Mina area west of the lake, in the area of the north-trending IP features and Au-Ag anomalies mentioned below. A similar pattern is shown by zinc values above 80 ppm Zn, and the distribution of higher values in both these elements appears to be strongly influenced by a northwest-trending IP feature.
A C A HOWE INTERNATIONAL LIMITED FIGURE 31: LAG SAMPLING SHOWING Ag PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 32: LAG SAMPLING SHOWING Au PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 33: LAG SAMPLING SHOWING Pb PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA FIGURE 34: LAG SAMPLING SHOWING Zn PPM ON IP CHARGEABILITY AT THE CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA 67
A second phase of lag sampling has recently been conducted, comprising infill lag sampling to better define the phase 1 anomalies. 404 samples have been collected from infill lines 25 m to the north and south of the anomalies. Samples were collected every 25 m.
Three lines were also sampled across IP anomalies AC1, AC2 and A9 and to the east of Cerro Cubilete. The lines were 100 m apart and sample spacing was 50 m. Results have been incorporated in the diagrams above.
Other elements: As, Ba, Cu, Mo and Mn show similar distributions to Pb and Zn, with high Ba also in the southern and southwestern part of the sample grid.
9. DRILLING
9.1. DIAMOND DRILLING AT CERRO CUBILETE
The significant mineralisation at Cerro Cubilete was tested in ten scout holes designed to explore the structural controls of the mineralisation and to test the zone at depth. Figure 35 shows the position of the drill holes.
The drill programme, which totals 2,148 m, was carried out between the 10th and 28th January, 2013. Nine holes were drilled on four sections oriented at 295º, and angled at -55º. The distance between the northernmost and southernmost sections is 270 m. The tenth hole was drilled on an azimuth of 238º, and angled at -50º, to investigate possible hangingwall mineralisation. Final-surveyed collar coordinates and other data are shown in Table 7, and the collar positions are shown on Figure 35.
TABLE 7. CERRO CUBILETE DRILL HOLE COLLAR DATA Hole E N RL Az Angle Depth CCDDH01 2685874.17 4684393.98 79.70 295 -55 150.00 CCDDH02 2685868.24 4684309.76 90.40 295 -55 161.00 CCDDH03 2685841.47 4684188.08 91.70 295 -55 152.00 CCDDH04 2685905.15 4684381.01 84.70 295 -55 203.15 CCDDH05 2685906.32 4684380.43 84.70 295 -75 161.15 CCDDH06 2685914.76 4684292.86 105.70 295 -55 224.00 CCDDH07 2685885.38 4684156.63 98.10 295 -55 290.00 CCDDH08 2685876.42 4684440.08 75.00 295 -55 250.00 CCDDH09 2685925.59 4684415.67 74.80 295 -55 302.00 CCDDH10 2685833.07 4684492.21 74.70 238 -50 250.00
A C A HOWE INTERNATIONAL LIMITED N
FIGURE 35: CERRO CUBILETE DRILL HOLE (BLACK) AND DRILL SECTION (GREY) LOCATION PLAN. SELECTED FAULT TRACES ARE SHOWN IN BLUE, OUTCROPPING MINERALISATION IN RED. TOPOGRAPNIC CONTOURS ARE IN METRES 69
All holes were fully cored using HQ diameter rods (core diameter 63.5 mm). Recovery was recorded by the geologist. All holes averaged recoveries in excess of 93% except CCDDH03, which averaged 88%. ACA Howe notes that significant faulting occurred in the latter hole. Three of the significant intercepts shown in Table 8 below coincide with poor recoveries (marked with asterisk), though the remainder had satisfactory recoveries and the results are considered to be representative of the intervals sampled. Downhole survey measurement utilised a Reflex EZ TRAC instrument, with readings every 50 m. No core orientation measurements were taken.
Following detailed geological logging and RQD (rock quality designation) measurements, sampling intervals were marked on the core and core boxes with a permanent marker by the geologist. The core samples were split in half using a diamond saw, one half was bagged and marked while the other half was returned to the core box. Samples were collected to geological boundaries if possible, though as the majority of the sampled intervals were stockworks and breccias, a sample interval of 1 m was often utilised. Minimum sample interval was 0.5 m, and a few samples up to 2 m were collected. One international standard was included with every twenty samples. The bagged, marked and sealed samples were sealed into polypropylene sacks and collected on a regular basis by the assay laboratory.
Table 8 below shows selected intervals from the drilling. Based on the current interpretation of mineralisation dipping sub-parallel to the Callan Fault, the widths of the intervals reported are close to true width of the bulk mineralisation, though it must be noted that many of the higher grades are returned from stockworks with variable orientations of veinlets or variable amounts of sulphide-rich matrix fill representing multiple pulses of mineralisation. The northernmost sections indicate that the true thickness of the bulk mineralisation increases to the north. (Figures 36 to 39).
Eight of the ten holes intersected zones of mineralisation comprising silver ± lead-zinc, with local low- grade gold values. This complex, polymetallic style of mineralisation makes it difficult to assign a single cut-off grade, so the intersections listed below describe the main intervals which contain significant values of Ag, Pb or Zn. Only one sample assayed above 1% copper: CCDDH09, 99- 100 m, where a patch of coarse chalcopyrite occurs in the core.
TABLE 8. SELECTED DRILL HOLE INTERSECTIONS AT CERRO CUBILETE Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 17.00 19.00 2.00 71.31 0.01 0.04 0.12 23.80 36.00 12.20 70.40 0.01 0.11 0.05 Includes 25.00 26.00 1.00 200.54 0.03 0.12 0.07 30.00 31.00 1.00 182.67 <0.01 0.16 0.12 CCDDH01 38.75 39.25 0.50 130.57 0.03 0.26 0.17 46.00 47.00 1.00 156.34 0.06 0.02 0.01 49.00 50.00 1.00 552.67 0.07 0.16 0.01 92.00 93.00 1.00 32.58 0.28 0.01 0.02 114.00 115.00 1.00 27.83 0.34 0.05 0.04 17.80 19.00 1.20 5.54 0.16 0.02 0.01 25.00 26.00 1.00 63.72 0.03 0.02 0.05 CCDDH02 29.00 30.00 1.00 72.92 0.03 0.01 0.01 35.00 36.00 1.00 68.91 0.07 0.02 0.02 Includes
A C A HOWE INTERNATIONAL LIMITED 70
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 35.00 35.50 0.50 85.05 0.10 0.02 0.02 60.00 62.00 2.00 10.06 0.25 0.02 0.02 Includes 60.00 61.00 1.00 5.21 0.38 0,02 0.02 61.00 62.00 1.00 14.92 0.11 0.02 0.02 *26.00 28.00 2.00 4.34 0.32 0.15 0.03 29.00 30.00 1.00 10.29 0.16 0.01 0.02 41.00 42.00 1.00 63.55 0.08 0,01 0.01 50.00 55.00 5.00 51.20 0.31 0.04 0.02 Includes 50.00 51.00 1.00 18.90 0.47 0.02 0.01 51.00 52.00 1.00 48.31 0.17 0.02 0.01 CCDDH03 52.00 53.00 1.00 68.62 0.31 0.06 0.02 53.00 54.00 1.00 40.27 0.12 0.02 0.01 54.00 55.00 1.00 79.87 0.47 0.10 0.05 61.00 62.00 1.00 2.89 0.47 0.03 0.05 71.50 73.00 1.50 39.66 0.51 0.15 0.36 78.00 79.00 1.00 13.57 0.38 0.31 0.90 80.00 81.00 1.00 <2 0.89 0,08 0111 33.00 40.00 7.00 227.09 <0.01 0.86 0,59 Includes *33.00 34.00 1.00 286.21 <0.01 3.82 2.55 34.00 35.00 1.00 719.31 <0.01 1.75 1.01 39.00 40.00 1.00 466.42 <0.01 0.15 0.08 55.00 67.00 12.00 39.38 <0.01 2.17 1.05 Includes 55.00 56.00 1.00 39.33 <0.01 1.11 1.61 56.00 57.00 1.00 79.13 0.01 1.08 0.98 57.00 58.00 1.00 84.92 <0.01 2.41 1.85 CCDDH04 59.00 60.00 1.00 27.47 <0.01 1.49 0.82 60.00 61.00 1.00 49.23 <0.01 1.83 1.02 61.00 62.00 1.00 26.40 <0.01 2.68 0.73 62.00 63.00 1.00 16.22 <0.01 1.62 0.23 64.00 65.00 1.00 14.25 <0.01 1.41 0.23 65.00 66.00 1.00 47.60 <0.01 5.79 0.93 66.00 67.00 1.00 39.95 <0.01 6.20 3.47 70.45 71.00 0.55 54.54 <0.01 4.68 3.25 71.00 71.50 0.50 101.25 <0.01 3.67 6.10 71.50 72.00 0.50 145.17 0.01 3.30 3.92 72.00 72.50 0.50 78.01 <0.01 3.32 2.97
A C A HOWE INTERNATIONAL LIMITED 71
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 73.00 74.00 1.00 23.38 <0.01 10.27 0.82 74.00 75.00 1.00 25.73 <0.01 2.46 1.26 77.00 95.00 18.00 59.67 0.02 1.82 0.45 Includes 77.00 78.00 1.00 67.15 <0.01 1.23 0.78 78.00 79.00 1.00 30.76 0.01 2.51 1.04 79.00 80.00 1.00 106.19 0.02 1.99 1.25 80.00 81.00 1.00 22.06 <0.01 1.32 0.69 81.00 82.00 1.00 59.11 0.01 1.63 0.33 83.00 84.00 1.00 96.42 0.01 1.38 0.45 84.00 85.00 1.00 50.63 0.03 1.00 0.26 85.00 86.00 1.00 64.50 0.01 0.82 0.15 86.00 87.00 1.00 77.79 0.02 3.09 0.54 87.00 88.00 1.00 72.44 0.03 2.31 0.33 89.00 90.00 1.00 62.36 0.02 4.55 0.76 90.00 91.00 1.00 77.82 0.03 2.49 0.36 92.00 93.00 1.00 54.54 0.03 1.62 0.28 93.00 94.00 1.00 50.95 0.03 3.94 0.44 94.00 95.00 1.00 92.18 0.03 1.58 0.16 97.00 97.50 0.50 26.09 0.03 8.32 1.32 35.50 37.00 1.50 346.81 0.05 2.82 1.29 43.00 45.00 2.00 62.01 <0.01 0.21 0.11 Includes 44.00 45.00 1.00 81.07 <0.01 0.13 0.10 60.00 67.00 7.00 51.47 <0.01 0.81 0.96 Includes 61.00 62.00 1.00 44.13 <0.01 1.76 1.50 62.00 63.00 1.00 43.67 <0.01 1.06 0.83 64.00 65.00 1.00 84.09 <0.01 0.77 1.16 69.00 80.00 11.00 68.90 <0.01 0.65 1.09 CCDDH05 Includes 69.00 70.00 1.00 71.37 <0.01 0.82 1.71 71.00 72.00 1.00 115.23 <0.01 0.53 1.82 72.00 73.00 1.00 103.70 <0.01 0.72 1.49 73.00 74.00 1.00 62.20 <0.01 0.45 0.62 75.00 76.00 1.00 144.59 <0.01 2.39 2.74 77.00 78.00 1.00 96.96 <0.01 0.33 1.27 79.00 80.00 1.00 75.03 <0.01 0.59 0.91 86.00 87.00 1.00 60.21 <0.01 0.93 0.56 93.00 95.00 2.00 73.73 <0.02 1.41 1.14
A C A HOWE INTERNATIONAL LIMITED 72
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m Includes 93.00 94.00 1.00 84.87 <0.01 1.14 1.41 94.00 95.00 1.00 62.58 <0.01 1.67 0.87 100.00 113.00 13.00 57.31 0.02 0.94 0.93 Includes 100.00 101.00 1.00 46.30 0.03 1.03 1.04 102.00 103.00 1.00 56.31 0.01 0.92 1.17 103.00 104.00 1.00 83.74 0.02 1.84 1.60 104.00 105.00 1.00 56.78 0.02 1.12 1.35 105.00 106.00 1.00 39.44 0.01 1.34 0.79 109.00 110.00 1.00 117.92 0.02 1.22 1.26 110.00 111.00 1.00 79.66 0.02 0.66 0.76 111.00 112.00 1.00 75.83 0.03 1.87 0.83 112.00 113.00 1.00 49.15 0.03 1.26 0.96 113.00 117.00 4.00 20.40 0.03 1.46 0.88 Includes 113.00 114.00 1.00 21.11 0.03 1.51 0.27 114.00 115.00 1.00 25.24 0.04 3.40 1.22 116.00 117.00 1.00 15.25 0.04 0.48 1.13 126.00 127.00 1.00 14.45 0.14 1.48 0.81 131.00 132.00 1.00 42.46 0.04 2.48 1.25 142.00 145.00 3.00 45.75 0.03 4.48 1.00 Includes 142.00 143.00 1.00 38.46 0.02 3.48 1.10 143.00 144.00 1.00 59.73 0.04 4.48 1.06 144.00 145.00 1.00 39.07 0.04 5.48 0.83 147.00 148.00 1.00 30.43 0.11 0.52 0.57 149.00 150.00 1.00 33.02 0.17 0.93 1.40 151.00 152.00 1.00 16.10 0.12 0.29 0.68 4.00 5.00 1.00 85.16 <0.01 0.03 0.05 33.60 35.40 1.80 80.66 <0.01 0.01 0.13 59.00 61.00 2.00 260.87 0.02 1.07 0.42 Includes 59.00 60.00 1.00 199.68 0.04 1.73 0.47 CCDDH-06 60.00 61.00 1.00 322.06 <0.01 0.41 0.36 94.00 95.00 1.00 12.16 <0.01 1.00 0.04 103.00 104.00 1.00 134.92 0.01 1.00 0.39 112.00 113.00 1.00 39.17 <0.01 0.98 0.13 123.00 124.00 1.00 22.26 0.02 1.16 0.07 CCDDH07 43.00 51.00 8.00 65.56 <0.01 0.16 0.06
A C A HOWE INTERNATIONAL LIMITED 73
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m Includes *43.00 44.00 1.00 191.96 <0.01 0.02 0.02 47.00 49.00 2.00 81.18 <0.01 0.04 0.08 57.00 58.00 1.00 14.21 0.10 0.01 0.00 64.50 71.00 6.50 88.40 0.23 0.05 0.05 Includes 64.50 65.00 0.50 62.54 0.15 0.01 0.01 67.00 68.00 1.00 30.00 0.11 0.05 0.03 68.00 69.00 1.00 108.76 0.42 0.06 0.06 69.00 71.00 2.00 184.12 0.72 0.09 0.12 71.00 77.00 6.00 9.84 0.15 0.03 0.02 Includes 71.00 73.00 2.00 13.95 0.13 0.02 0.02 73.00 75.00 2.00 10.72 0.19 0.03 0.02 75.00 77.00 2.00 4.86 0.14 0.05 0.02 84.00 102.00 18.00 126.74 0.13 0.04 0.06 Includes 84.00 84.50 0.50 768.83 0.03 0.04 0.01 84.50 85.00 0.50 876.80 0.02 0.04 0.02 85.00 86.00 1.00 14.23 0.24 0.04 0.03 86.00 87.00 1.00 175.48 0.54 0.02 0.01 87.00 88.00 1.00 90.25 0.17 0.01 0.01 88.00 88.50 0.50 51.75 0.17 0.01 0.00 90.00 92.00 2.00 91.38 <0.01 0.01 0.01 93.00 94.00 1.00 103.28 0.04 0.05 0.05 96.00 96.50 0.50 260.14 0.08 0.08 0.24 96.50 97.00 0.50 326.52 0.35 0.19 0.66 97.00 98.00 1.00 140.64 0.02 0.06 0.10 98.00 99.00 1.00 234.17 0.55 0.11 0.16 101.00 102.00 1.00 64.80 0.19 0.15 0.05 103.00 104.00 1.00 7.62 0.15 0.10 0.19 232.55 233.00 0.45 20.35 0.12 0.76 0.26 233.50 234.50 1.00 19.43 0.11 0.49 0.12 236.50 237.00 0.50 39.40 0.11 1.79 0.18 239.50 240.50 1.00 20.95 0.01 1.17 0.07 13.00 18.00 5.00 64.99 0.02 0.08 0.03 Includes CCDDH08 14.00 15.00 1.00 165.66 0.02 0.03 0.01 21.00 22.00 1.00 200.16 0.09 0.32 0.15 26.00 27.00 1.00 186.02 <0,01 0.31 0.07
A C A HOWE INTERNATIONAL LIMITED 74
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 28.00 44.00 16.00 89.88 _ _ 1.05 Includes 28.00 29.00 1.00 368.45 0.01 5.77 0.58 29.00 29.60 0.60 113.65 <0,01 1.20 0.03 29.60 30.00 0.40 113.65 <0,01 >30 4.13 30.00 30.50 0.50 147.38 0.01 15.46 2.41 30.50 31.00 0.50 72.79 <0,01 6.28 1.16 31.00 32.00 1.00 105.31 <0,01 8.40 1.43 32.00 33.00 1.00 42.14 <0,01 3.85 0.55 33.00 34.00 1.00 52.87 <0,01 4.49 0.90 34.00 35.00 1.00 135.97 0.01 9.60 1.61 35.00 36.00 1.00 83.52 <0,01 3.99 2.14 37.00 38.00 1.00 188.35 0.01 5.91 2.52 38.00 39.00 1.00 39.59 <0,01 1.46 0.58 39.00 39.40 0.40 80.46 <0,01 2.92 0.66 39.40 40.00 0.60 166.17 0.01 5.42 0.86 40.00 41.00 1.00 30.78 0.02 1.61 0.40 41.00 42.00 1.00 27.75 0.04 1.77 0.89 42.00 43.00 1.00 24.55 0.03 1.70 0.52 43.00 44.00 1.00 23.10 0.03 1.10 0.27 53.00 58.00 5.00 114.42 0.01 1.92 0.62 Includes 53.00 54.00 1.00 97.65 <0,01 1.71 0.27 54.00 55.00 1.00 238.53 0.03 2.98 1.00 55.00 56.00 1.00 118.03 0.02 2.14 0.33 57.00 58.00 1.00 76.03 0.01 1.86 1.26 154.00 155.00 1.00 24.08 <0.01 1.08 0.06 189.00 190.00 1.00 41.18 0.02 2.62 2.22 196.00 199.00 3.00 23.86 0.02 2.76 0.85 Includes 196.00 197.00 1.00 20.40 0.05 2.04 0.98 198.00 199.00 1.00 42.21 0.01 6.20 1.39 204.00 205.00 1.00 27.87 0.06 0.48 1.43 213.00 214.00 1.00 27.49 0.04 2.33 3.60 222.00 224.00 2.00 9.23 <0.01 0.25 1.30 236.00 238.00 2.00 20.36 0.04 0.80 0.80 47.00 48.00 1.00 61.27 0.01 0.67 2.01 Includes CCDDH09 47.00 47.50 0.50 57.99 <0.01 0.93 1.60 47.50 48.00 0.50 64.56 0.01 0.40 2.43
A C A HOWE INTERNATIONAL LIMITED 75
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 58.00 59.00 1.00 67.29 0.09 0.24 0.30 61.00 70.00 9.00 20.84 0.04 1.73 2.12 Includes 61.00 62.00 1.00 10.37 0.06 0.47 1.82 62.00 62.50 0.50 16.51 0.03 0.81 2.05 62.50 63.00 0.50 16.07 0.02 1.01 2.79 63.00 63.50 0.50 37.76 0.06 2.08 1.96 63.50 64.00 0.50 3.62 0.03 0.28 1.00 64.00 64.50 0.50 32.54 0.05 1.61 2.63 64.50 65.00 0.50 9.35 0.05 0.33 1.04 65.00 65.50 0.50 49.64 0.05 3.42 3.18 65.50 66.00 0.50 26.36 0.06 2.86 2.13 66.00 66.50 0.50 34.54 0.06 4.29 2.44 66.50 67.00 0.50 13.63 0.06 0.90 1.30 67.50 68.00 0.50 23.13 0.03 1.33 1.57 68.50 69.00 0.50 15.09 0.01 3.29 2.06 69.00 69.50 0.50 43.63 0.03 7.14 9.72 69.50 70.00 0.50 32.52 0.14 0.80 0.74 71.00 71.50 0.50 59.26 0.03 0.96 1.94 72.00 72.50 0.50 29.45 0.02 1.00 2.12 74.00 77.50 3.50 45.23 0.03 1.33 1.56 Includes 74.00 75.00 1.00 24.84 0.04 0.00 1.13 75.00 76.00 1.00 52.09 0.02 0.00 2.21 76.00 76.50 0.50 97.10 0.07 0.00 2.57 76.50 77.50 1.00 32.84 0.01 1.11 0.83 79.50 83.00 3.50 50.63 0.04 1.68 1.12 Includes 79.50 80.00 0.50 91.17 0.04 1.98 1.50 80.00 81.00 1.00 39.70 0.02 0.95 0.72 81.00 82.00 1.00 50.55 0.04 1.02 1.00 82.00 83.00 1.00 41.37 0.07 2.93 1.44 83.50 84.00 0.50 15.41 0.01 0.68 1.17 85.00 87.00 2.00 30.33 0.10 10.43 2.74 Includes 85.00 86.00 1.00 17.24 0.05 3.83 1.93 86.00 87.00 1.00 43.42 0.16 17.02 3.54 88.00 89.00 1.00 5.27 <0.01 1.10 0.18 91.00 91.50 0.50 32.11 0.04 0.31 1.00 93.00 95.00 2.00 17.66 0.02 1.43 1.80
A C A HOWE INTERNATIONAL LIMITED 76
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m Includes 93.00 93.50 0.50 40.34 0.03 0.15 1.99 93.50 94.00 0.50 13.37 0.04 2.31 1.59 94.00 95.00 1.00 8.46 0.01 1.63 1.81 99.00 105.00 6.00 78.38 0.08 3.12 0.99 Includes 99.00 99.50 0.50 75.02 0.09 6.75 1.10 99.50 100.00 0.50 79.89 0.09 14.52 1.27 100.00 101.00 1.00 82.57 0.08 0.57 0.83 102.00 103.00 1.00 126.72 0.08 2.44 1.23 103.00 103.50 0.50 95.98 0.19 5.88 1.70 103.50 104.00 0.50 86.65 0.08 0.33 0.78 104.00 105.00 1.00 40.67 0.05 1.44 0.59 107.00 111.50 4.50 15.47 0.12 1.84 0.38 Includes 107.00 108.00 1.00 22.20 0.25 1.42 0.48 108.00 109.00 1.00 19.81 0.11 2.29 0.24 109.00 110.50 1.50 14.51 0.09 2.05 0.36 110.50 111.50 1.00 5.82 0.03 1.51 0.45 115.00 120.00 5.00 12.05 0.18 1.57 0.76 Includes 115.00 116.00 1.00 14.26 0.12 0.34 1.00 116.00 116.50 0.50 44.07 0.55 1.11 2.50 116.50 117.00 0.50 4.78 0.10 0.18 0.24 117.00 118.00 1.00 8.51 0.12 0.30 0.44 119.00 120.00 1.00 13.06 0.31 6.59 1.00 128.00 131.00 3.00 6.10 0.20 0.56 0.20 Includes 128.00 129.00 1.00 14.80 0.27 1.47 0.33 129.00 130.00 1.00 <2 0.21 0.15 0.12 130.00 131.00 1.00 2.49 0.13 0.06 0.14 133.00 134.50 1.50 15.61 0.47 0.40 0.40 Includes 133.00 134.00 1.00 12.41 0.47 0.18 0.17 134.00 134.50 0.50 22.00 0.46 0.40 0.36 137.00 138.00 1.00 9.37 0.19 0.27 0.52 139.00 140.00 1.00 15.21 0.14 0.69 0.71 142.50 143.00 0.50 45.44 0.03 0.30 1.03 144.00 144.50 0.50 18.56 0.06 1.50 0.75 153.50 154.00 0.50 20.55 0.07 1.92 0.70
A C A HOWE INTERNATIONAL LIMITED 77
Intercept Hole ID From To Ag ppm Au ppm % Pb % Zn m 169.00 169.50 0.50 28.13 0.04 2.74 0.16 174.50 175.00 0.50 35.06 0.14 5.99 0.37 216.00 217.50 1.50 22.07 <0.01 1.98 0.94 266.00 266.50 0.50 8.56 0.02 0.64 1.14 24.00 27.00 3.00 72.86 <0.01 0.06 0.01 Includes 24.00 25.00 1.00 124.62 <0.01 0.02 0.00 37.00 38.00 1.00 67.97 <0.01 0.73 0.07 CCDDH10 44.00 44.50 0.50 59.52 <0.01 1.80 0.29 93.00 93.50 0.50 47.34 <0.01 7.26 0.18 126.00 126.50 0.50 83.87 <0.01 3.14 2.77 191.00 191.50 0.50 55.89 0.01 2.06 1.19 219.50 220.00 0.50 89.75 <0.01 0.45 0.70
Note: most relevant assay results above 0,1g/t Au; 60g/t Ag; 1% Pb; 1%Zn
*low recovery
Notes: 1: intersection CCDDH08 includes one value above 30% Pb 2. red text indicates average results across interval range 3. yellow highlights indicate >5Pb/Zn%
The intersections in Table 8 are shown on the cross sections (Figures 36 to 39). Cross section locations are shown on Figure 35.
A C A HOWE INTERNATIONAL LIMITED FIGURE 36: CROSS SECTION A - CERRO CUBILETE EXPLORATION AREA: SANTA CRUZ, ARGENTINA FIGURE 37: CROSS SECTION BB - CERRO CUBILETE EXPLORATION AREA: SANTA CRUZ, ARGENTINA FIGURE 38: CROSS SECTION CC - CERRO CUBILETE EXPLORATION AREA: SANTA CRUZ, ARGENTINA FIGURE 39: CROSS SECTION DD - CERRO CUBILETE EXPLORATION AREA: SANTA CRUZ, ARGENTINA 82
Notes to Figures 36 to 39: Faults are shown as blue lines, dashed where inferred. Mineralised outlines are shown in red, stylised to indicate inferred extensions in depth.
Dave Shatwell, consultant to Samco, spent several days examining drill core from Cerro Cubilete and concluded the following. ACA Howe’s core inspection concurs with his observations.
‘The Cerro Cubilete prospect is a strata-bound body of veinlet and replacement Ag-Pb-Zn mineralisation in an easterly-dipping sequence of hydrothermally brecciated and oxidised crystal- poor volcaniclastic rocks which include lithic tuffs, ignimbrites and fine-grained tuffs. It is localised in the footwall of the north-northeast-trending Callan Fault which dips 30º east, sub-parallel to the volcanic stratigraphy. Volcaniclastic and epiclastic rocks in the hangingwall of the fault are unoxidised, unbrecciated and unmineralised. Flow-banded rhyolite (termed a sheared, flow banded daci-andesite based on a recent petrographic study by AGMS, October 2013) in the bottom of one drill-hole, and an outcrop 1.2 km south of the prospect, suggest a possible rhyolitic flow-dome environment.
Several styles of mineralisation are present, including barite ± galena-sphalerite- (chalcopyrite), chalcedonic silica ± fine grained sulfides veinlets, and fine-grained sulfide replacement. Both veining and replacement cross-cut the brecciation and are therefore later than it, and sulfides in the veins and replacement bodies coexist with oxides in the host-rock breccia.
A paragenetic vein sequence can sometimes be seen comprising:
(1) early barite, (2) chalcedonic silica-fine grained sulfides, (3) hypogene Fe oxide, (4) barren quartz.
The late Fe oxide is a different phase to the one which permeates the volcanics.
Coarse galena-sphalerite and, rarely, chalcopyrite, are associated with barite, and may therefore be an early phase. They also tend to occur at deeper levels than the chalcedonic silica and fine grained sulfides.
There are large variations in the metal ratios between Ag and Pb-Zn, but these can probably be explained by the relatively complex paragenesis proposed above, and to a minor extent by supergene oxidation.
Towards the north, mineralisation is concealed by a (currently) dry lake. Holes drilled on the two northern sections intersected better grades than the two southern sections, but this might be explained by a southerly plunge to the mineralisation. Therefore the prospect is open both north and south of current drilling, as well as down-dip.’
A C A HOWE INTERNATIONAL LIMITED N
FIGURE 40: CERRO CUBILETE SHOWING COVER SEQUENCE AND FAULTED BASAL CONTACT, RE-INTERPRETED FROM DRILLHOLE DATA. RED SHADING = SURFACE EXTENT OF MINERALISATION, DASHED BLUE LINES ARE STRUCTURE CONTOURS ON THE FAULT AT HE BASE OF THE COVER SEQUENCE. BLACK LINES ARE TOPOGRAPHIC CONTOURS EVERY 5M 84
Drill sections, including the one through CCDDH03 and CCDDH07 (Figures 36 to 39) indicate that the mineralisation dips more steeply than the faulted contact with the cover sequence. Figure 38 shows that the down-dip extent of the mineralisation, and possibly its full width, has not been tested by the current drilling. The mineralisation is also open to the south.
Holes CCDDH03 and CCDDH07 exhibit extensive fracturing and gouge and ACA Howe considers that they were drilled sub-parallel to, and essentially along a series of closely spaced west-northwest structures that appears to offset the system to the southeast. The poor results from these holes are probably unrepresentative of the mineralised system.
10. SAMPLING PREPARATION, ANALYSES AND SECURITY
10.1. ROCK CHIP SAMPLES
The Grasta samples were prepared and assayed at the Alex Stewart Laboratories, now Alex Stewart Assayers Argentina (ASA) in Mendoza, which is accredited to ISO-9001:2008, ISO14001-2004 and ISO 17025 for fire assay. Gold was assayed by fire assay using a 50 gm charge, while all other elements except mercury were assayed by ICP. Mercury was determined by the cold vapour technique. No details are available on the sample preparation used, or sample security and the only quality assurance/quality control utilised was the internal checks by Alex Stewart laboratories in Mendoza. The laboratory meets international standards for sample preparation and analytical procedures although ACA Howe cannot comment on the security of the samples prior to assay. However recent sampling by Samco indicates that sample results are reliable.
ACA Howe’s samples were kept in the possession of the author, bagged and sealed in Buenos Aires and shipped to Alex Stewart Laboratories in Mendoza for assay. The samples were dried, crushed to 2 mm, split to 200 gm and pulverised to 90% passing 200 mesh. Fire assay with a 50 gm charge was used for gold determination and ICP for the remaining elements reported.
Samco’s samples were sealed and marked up in bags in the field and batches of five samples were sealed in polypropylene sacks at the camp under the supervision of Samco’s senior geologist. The sealed sacks were collected by the assay laboratory on a regular basis. No internal samples or standards were included with the reconnaissance rock chip samples. All samples were submitted to Alex Stewart Assayers Argentina (ASA) for sample preparation and fire assay in Perito Moreno, Santa Cruz facilities. Each sample was dried at 80-90° then crushed to greater than 80% passing 10 mesh. The sample was then split in a riffle splitter to obtain a 1.2 kg sample, which was ground to obtain 95% at 105 microns (passing 140 mesh). 50gm charges were utilised for the fire assay of both silver and gold (ASA code Ag4A-50 for silver and Au4-50 for gold). The fire assay method for gold uses an Atomic Absorption Spectroscopy (AAS) finish, while a gravimetric finish is used for silver with lower detection limits of 0.01ppm for gold and 2 ppm for silver. Ag is also analyzed by ICP (inductively coupled plasma), with lower and upper detection limits of 0.5 and 200 ppm. The pulps are also sent by the Perito Moreno facility to ASA Mendoza for 39 element determination by ICP (ASA code ICP- OES AR-39). In addition to silver, 38 other elements including As, Ba, Cu, Pb and Zn are also determined by the ICP method. Some of these elements, including Ba, Pb and Zn, returned values above the upper limits of detection by the ICP method. For Pb and Zn, this limit is 10,000 ppm (1%), and these samples were re-assayed by a method known as ‘ICP-ORE’, which has upper limits of detection of 30% for Pb and 50% for Zn. One sample (from CCDDH08, 29.6-30m) still returned a Pb assay >30%, and this has been treated as if it was 30%. For all elements, values below the respective detection limits are treated as zero. ASA is currently ISO 9001:2008 accredited for the preparation and chemical analysis of mining exploration samples and accredited to ISO 17025 for fire assay.
ASA’s internal QA/QC procedure in Mendoza for ICP involves the use of 2 blanks and 4 internal standards per one hundred samples. Ten samples per 100 sample batch are repeat assayed. In Perito
A C A HOWE INTERNATIONAL LIMITED 85
Moreno fire assay for silver the procedure involves the inclusion of 2 international standards, 4 standards prepared with metallic silver and 2 blanks are included in every 50 sample batch. Five samples per 50 sample batch are repeat assayed. For gold fire assay, 2 international standards and 1 blank are included in each 50 sample batch. Three samples per 50 sample batch are repeat assayed. The author considers that the sample preparation, security and analytical procedures utilized for the ACA Howe and Samco samples were adequate for purpose and meet international standards.
10.2. LAG SAMPLES
Lag sample preparation and assaying followed the same procedures as rock chip samples.
10.3. DRILL CORE SAMPLES
Drill core sample preparation and assaying followed the procedures as rock chips and lag samples.
11. DATA VERIFICATION
ACA Howe has reviewed the licence documents and the brief environmental impact statements that accompanied the applications, but has relied on Samco’s lawyers for a legal opinion on the validity of the licences. The Grasta sampling data was not made available until after the field visit. ACA Howe examined the assay certificates, laboratory QA/QC results and the Grasta sample result spreadsheets and found that the data were accurately reported and that laboratory procedures appear to be reliable.
The licences were accurately located on the maps provided by Samco and locations were verified in the field using GPS. Geological formations and mineralised zones reported by Samco or interpreted from satellite imagery were verified where possible during the field visits.
ACA Howe collected a series of samples from known mineralisation in outcrop. The samples of outcropping mineralisation were composite chip samples.
The Samco assay certificates are provided electronically by ASA to Samco’s senior technical personnel as secure PDF files and excel spreadsheets and are incorporated directly into the Samco database. ACA Howe has viewed the assay certificates and Excel spreadsheets and is satisfied that the results are accurately represented. The internal QA/QC results shown on the assay certificates indicate that the procedures are accurate and to industry standards.
Samco’s QA/QC results for lag sampling and drilling were examined. The silver standard values returned from lag sample assays indicate results with a slightly high bias, though all the standards were within one or two standard deviations of the mean. The standards included with the drill samples suggest a minor negative bias, though they all fall within two standard deviations of the mean.
12. MINERAL PROCESSING AND METALLURGICAL TESTING
No mineral processing or metallurgical testwork has been conducted by Samco.
13. MINERAL RESOURCE ESTIMATES
No mineral resources have been identified by Samco.
A C A HOWE INTERNATIONAL LIMITED 86
14. MINERAL RESERVE ESTIMATES
No mineral reserves have been identified by Samco.
15. MINING METHODS
Not applicable.
16. RECOVERY METHODS
Not applicable.
17. PROJECT INFRASTRUCTURE
Not applicable.
18. MARKET STUDIES AND CONTRACTS
Not applicable.
19. ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT
Not applicable.
20. CAPITAL AND OPERATING COSTS
Not applicable.
21. ECONOMIC ANALYSIS
Not applicable.
A C A HOWE INTERNATIONAL LIMITED 87
22. ADJACENT PROPERTIES
22.1. CERRO MORO
Corina lies contiguous to the north of Extorre’s Cerro Moro Mine, which comprises polymetallic gold- silver mineralisation of the low sulphidation epithermal vein type. Sphalerite, galena, and chalcopyrite accompany the precious metals. Individual prospects vary from simple, single veins to complex vein systems with spur and cymoid loop structures. Limited quartz stockwork veinlets are also present around the main veins. Silicification and phyllic alteration, with minor disseminated pyrite, are locally developed adjacent to the veins, whose widths usually vary from 1 m to 5 m, and rarely up to 10 m. The strike length of individual veins is usually between 200 m and 1 km.
More than 30 veins have been identified to date. The gold-silver-bearing veins at Cerro Moro are subvertical, and are hosted along fault zones which strike northwest, east-west, or northeast (with the northwest-trending veins containing the highest tenor of precious metal mineralisation). The Cerro Moro veins are also characterised by multiple phases of quartz-adularia +/- gold-silver mineralisation, with vein textures ranging from massive chalcedonic quartz to spectacular black sulphidic-banded veins. The high-grade Escondida-Zoe gold-silver deposit hosts a significant proportion of the reported mineral resource at Cerro Moro (see below), and has been drill tested along approximately 2 km of strike extent and to a depth of 200 m. Other significant veins at Cerro Moro include the Esperanza, Gabriela, Loma Escondida, Patricia, and Deborah veins. Gold at Cerro Moro occurs within the mineralised veins as either native gold or as electrum, whereas silver occurs either in electrum or in the silver sulphide acanthite. Base metal sulphides (chalcopyrite, sphalerite, galena) commonly accompany high grade gold-silver mineralisation in the Escondida vein.
Host rocks to the mineralised veins at Cerro Moro are gently-dipping rhyolitic ignimbrites, felsic flows, acid to intermediate tuffs, tuff breccias and volcaniclastic sediments belonging to the Middle to Upper Jurassic Chon Aike and Matilde Formations. These volcanic rocks are locally overlain by Tertiary-age basalts and Quaternary gravels and sediments.
A 43-101 Technical Report on the Cerro Moro project (Preliminary economic assessment of the Cerro Moro gold-silver project, Santa Cruz, Argentina, March 30, 2012) was posted on the Extorre website on April 2nd 2012 and is available under Extorre’s profile at www.sedar.com. This describes the Escondida-Zoe structure. Most of the Escondida structure has a general northwest-southeast strike, but where high-grade shoots occur, the strike changes to east-west or west-northwest. Moreover, the eastern end of the structure, which contains the Zoe shoot, strikes east-west. Acording to the cited report, the Zoe-Escondica structure is a south-dipping fault which places volcanics to the north and northeast in contact with sandstone to the south and southwest. In addition there are a number of rhyolite domes in tbhe vicinity.
The Interpretation Map of the Mercia permit (Figure 8) indicates there are number of very similar features to the Escondida-Zoe vein at Cerro Moro. These are:
A series of major faults trending west-northwest. These faults separate two distinct units within the Chon Aike formation. The occurrence of possible rhyolite domes along the fault zone.
The major west-northwest trending faults in the Mercia licence extend through the mineralised zone in the adjacent Corina permit, though if the mineralisation extends into the Mercia area it would appear to be blind.
Extorre was purchased by Yamana Gold in August 2012. On the date of this report NI 43-101 compliant resources as of December 31, 2012, were quoted on the Yamana website (www.yamana.com) as:
A C A HOWE INTERNATIONAL LIMITED 88
Indicated mineral resource: 4.16M tonnes @ 6.6 g/t Au at a 1 g/t cut-off grade; silver credits take this up to 14.6 g/t AuEq*; Inferred mineral resource – 490,000 GEO – 3.60M tonnes @ 1.90 g/t Au, or 4.2g/t AuEq*.
*Gold equivalent grade is calculated by dividing the silver assay result by 50, adding it to the gold value and assuming 100% metallurgical recovery.
The author has been unable to verify the information given above, which is not necessarily indicative of mineralisation on the Samco properties.
22.2. AUSTRALGOLD
Austral Gold is listed on the ASX, operates the Guanaco gold mine in Chile and holds a 19.9% stake in Argentex’s Pinguino project, which reportedly has a silver equivalent indicated resource of 23.6 million ounces. The company holds the licence block contiguous to the east with Mercia. The 8 de Julio project area abuts Mercia. According to the Austral Gold website, geological mapping of the entire property has been completed and 13 target areas predominantly in the west (ie adjacent to Mercia) were mapped at a larger scale. Veins with potential ore shoots were identified in three areas and samples were sent for geochemical assaying. The Los Pinos-Aguada Norte and Barroso Grande areas both showed anomalies for gold and silver and were considered to have the greatest potential for the project. The most attractive results were found in the Barroso Grande area and a ground magnetic programme was completed followed by a geochemical sampling campaign. Subsequent trenching returned sufficiently encouraging results to enable an IP survey to refine targets for drilling. Nofurther details are available.
During ACA Howe’s recent visit, survey pegs were observed adjacent to Mercia, though the author has been unable to verify the information given above, which is not necessarily indicative of mineralisation on the Samco properties.
23. OTHER RELEVANT DATA AND INFORMATION
Not applicable.
24. INTERPRETATION AND CONCLUSIONS
The Corina and Mercia licences occupy a strategic position in the Deseado Massif, immediately adjacent to the Cerro Moro project area, where a major gold-silver mine is under development by Yamana Gold. The licences are underlain by similar geology and similar structural features to those controlling the Cerro Moro mineralisation have been identified.
Samco has discovered a significant zone of silver and base metal mineralisation on the Corina licence that extends to the southeast onto the Mercia licence. Recent work has identified high grade silver- base metal, base metal only and sporadic gold anomalies within the zone.
The mineralisation is within an extensive area of alteration, termed the Cerro de la Mina-Cerro Cubilete zone, which is largely contained within a major west-northwest-trending structural corridor.
The Cerro de la Mina-Cerro Cubilete zone straddles the Corina-Mercia boundary and comprises chalcedony-dominated banded vein-like structures and associated stratabound replacement style silicic and sulphide mineralisation in breccias and stockworks. This is a marked departure from the well- documented quartz-adularia or low-sulphidation type epithermal veins which typify many deposits and
A C A HOWE INTERNATIONAL LIMITED 89
prospects in the Deseado Au-Ag metallotect, including the gold-silver veins at the adjacent Cerro Moro Project.
The mineralisation at Cerro Cubilete is controlled by the northeasterly trending Callan Fault which juxtaposes unmineralised laminated, in part carbonaceous tuffs referred to as the hanging wall sequence with underlying brecciated and oxidised lithic tuffs and ignimbrites. It is clearly multiphase and shows some characteristics of more intermediate-sulphidation type epithermal mineralisation though the ubiquitous presence of adularia may suggest overprinting by a low-sulphidation episode.
A preliminary core-drilling programme has been completed at Cerro Cubilete. Wide breccia zones have been intersected beneath the Callan Fault, with variable amounts of base metals. Coarse galena- sphalerite and, rarely, chalcopyrite, are associated with barite, and tend to occur at deeper levels than the chalcedonic silica and fine grained sulphides. There are large variations in the metal ratios between Ag and Pb-Zn. Towards the north, mineralisation is concealed by a (normally) dry lake. Holes drilled on two northern sections intersected better grades than the two southern sections, but this might be explained by a southerly plunge to the mineralisation. It is also noted that intense faulting in the southernmost holes suggest that they may have been collared close to an unexposed west- northwesterly fault, sub-parallel to the drill orientation and may simply have missed the mineralisation. The prospect is open both north and south of current drilling, as well as down-dip.
There are certain similarities to the well-known Fresnillo area of Mexico where silver-base metal intermediate sulphidation epithermal veins, breccias and stockworks occur; the discovery outcrop at Fresnillo contained silver mineralisation in an oxidised stockwork and the majority of the veins and breccias are blind. The Cerro Cubilete mineralisation also bears some similarities to the Navidad silver deposit in Chubut Province, Argentina; the latter exhibits breccia hosted mineralisation and stratabound intermediate sulphidation mineralisation hosted by permeable tuffs beneath impervious carbonaceous sediments. Comparisons can also be drawn with the San Cristobal silver deposits in Bolivia, where host rock alteration and deposition of iron oxide-siderite-barite veins containing silver minerals was succeeded by the intrusion of dacite porphyry stocks, uplift and deposition of lava flows, faulting and intrusion of breccia pipes. Deposition of tuff and further hydrothermal activity resulted in alteration and deposition of sulphide minerals (galena, sphalerite, and pyrite) with native silver and barite.
The Callan Fault and its continuations to the north and south of the known mineralisation, beyond the limits of the west-northwest structural corridor, are strong exploration targets. Infill lag sampling has identified groupings of gold and silver anomalies that appear to be controlled by northeasterly faulting along southeasterly extensions of the Callan and adjacent faults.
The continuation of the west-northwesterly structural corridor beyond the known mineralisation and strong west-northwest and northeast-trending IP anomalies within the corridor also remain highly prospective targets. Recently discovered northeast-trending quartz veining and alteration in the hanging wall sequence suggests potential for additional mineralisation to the east of the Cerro Cubilete zone.
The IP survey indicates the presence of arcuate fracturing in the vicinity of Cerro Cubilete and the ground magnetic survey suggests the presence of an intrusive body several hundred metres east of the deposit around which elements of the west-northwesterly structural corridor appear to be deflected, though the easterly dip of the Callan Fault is difficult to reconcile with an intrusive body in this area. Further drilling is required to detail the geometry of the deposits.
Cerro de la Mina contains many small excavations, reportedly exploring for silver and/or manganese. The zone contains areas of argillic alteration, haematite and manganese breccia fill and veining accompanied by quartz and barite lying within the same broad west-northwest striking structural corridor as Cerro Cubilete. Systematic lag sampling has identified a series of elevated gold values grouped along a northeast-trend at Cerro de la Mina that are currently under detailed investigation.
A C A HOWE INTERNATIONAL LIMITED 90
The IP survey has identified a major, strong chargeability anomaly extending from the immediate south of Cerro Cubilete to the west-northwest, swinging to a more northerly trend in the vicinity of Cerro de la Mina. Samco’s geologists have identified quartz veining and alteration along the trend of this feature. The northern extremity of the IP anomaly crosses over a major west-northwesterly fault and the intersection appars to focus the strongest gold-silver lag anomalies. Though silver values on the surface at Cerro de la Mina are much lower than those at Cerro Cubilete, the two areas show similar alteration as well as strongly anomalous base metal, arsenic and barium values suggesting that the systems are very likely related or connected.
Elsewhere on the properties, significant targets have been identified; these include potential rhyolite doming and alteration on the western margin of the Corina licence where arcuate veining has been interpreted from satellite imagery. Anomalous rock chip samples with elevated arsenic were collected by Grasta in this area. Other areas of interpreted veining and anomalous Grasta samples remain to be investigated. The Mercia East zone has characteristics of the very upper part of a low sulphidation epithermal system and merits further investigation. The Angelica zone also bears characteristics of late hydrothermal activity.
These occurrences at Angelica, Mercia East and Sector’A’ may be similar to the epithermal mineralisation identified at Cerro Moro and will also form important exploration targets. Further work is planned in these areas.
Rhyolite domes have also been identified on and adjacent to the Corina Permit area by satellite imagery interpretation.
25. RECOMMENDATIONS
ACA Howe considers that a two phase programme should be conducted, with the second phase contingent on success of the earlier phase. Additional drilling and trenching are recommended. Concurrent regional scale exploration programmes should be conducted to test the remainder of the licence. The second phase includes drilling of high priority targets and the advancement of targets identified during the regional work to the drilling stage.
25.1. EXPLORATION OF THE CORINA AND MERCIA LICENCES
25.1.1. PROPOSED PROGRAMME AND BUDGET
The drilling to date at Cerro Cubilete has intersected mineralisation that is open in all directions, though the presence of significant faulting has made interpretation of the deposit problematic. Infill holes should be drilled between the current drill sections, step-out holes should be drilled to the southeast of the existing ones, and some test holes should be drilled oriented to the southwest and southeast to test the west-northwesterly faults for mineralisation and to determine whether westerly dipping mineralised structures, parallel to the previous drilling, are present. It is recommended that two infill sections should be drilled between sections B-B’, C-C’ and D-D’ with a further section drilled 100 m southeast of section D-D’, totalling 1,500 m. Three holes 175 m long should be drilled to test the downdip continuation of the mineralisation in holes CCDDH05, 06 and 07. A scissor hole some 250 m long should be drilled between drill sections B-B’ and C-C’ to test for northwesterly dipping veining. Depending on the results of this 2,100m programme, a Phase 2 drilling programme would be planned leading to the delineation of resources at Cerro Cubilete.
A systematic programme of trenching should be conducted in the Cerro Cubilete-Cerro de la Mina area to test the structures identified by the work to date. This includes the IP anomalies A1 and A9, and the stronger parts A5, A6 and A7 where gold and silver anomalism occurs, and the northwesterly-
A C A HOWE INTERNATIONAL LIMITED 91
trending demagnetised zone, including the southern part of the west-northwesterly trending Lake Fault, where recent channel sampling has returned highly elevated silver values. The area of limestone in the northwest part of Corina where gold/silver anomalism has been identified should also be trenched. The trenches should be geologically mapped and systematically channel sampled to test any mineralisation exposed in veins and adjacent wallrocks. It is considered that this would provide geological control of scout drilling at Cerro de la Mina in the area of the gold-silver anomalism. The trenches would vary between 20 m and 200 m in length, and the total length required would amount to some 4,500 m. For budgetary purposes it is assumed that five fences of holes would be drilled initially, for a total of 2,000 m. Due to the presence of deep colluvium and eluvium it is also recommended that a trial reverse air blast (RAB) drill programme should be conducted. The budget for this work would be included in the contingency, though should the method prove effective, the trench programme would be reduced and funds would be transferred from the trenching budget.
The Mercia East area has geochemical and textural indications suggesting that it represents the top of a low sulphidation epithermal system. While scout drilling could be conducted, it is considered that the area should be covered by a gradient array IP survey to refine target selection. Sector ‘A’ has characteristics of high level epithermal mineralisation and should be trenched and surveyed using gradient array IP. This could amount to about 100 line km of gradient IP and 500 m of trenching.
A significant number of resistive outcrops of possible quartz veining or silicification, close to earlier anomalous samples collected by Grasta, have been identified by satellite imagery studies, but have not yet been visited by Samco geologists. Channel sampling of outcropping veins should be conducted. This includes an area of alteration with a similar signature to that over the known mineralisation at Cerro Cubilete on the western margin of Corina. It is associated with arsenic anomalism indicated by Grasta sampling, is close to a domal feature and also coincides with a potassium anomaly on the reinterpreted regional survey. This is a strong target and it is assumed that 200 one metre samples would be sufficient to sample the areas on a reconnaissance basis.
The lag soil sampling programme should be extended to cover the remainder of the licence areas. The current programme has proved effective in identifying focussed anomalism in lead, zinc and silver, and has also located five principal areas with gold and silver values that can be related to structures. These require detailed examination, including systematic trenching and drilling. For initial reconnaissance, an offset 200 m grid would be surveyed, with infill as required. The initial programme would require collection of some 1,500 samples.
The ground magnetometer survey completed to date has identified significant linear zones that are associated with known mineralisation. This should be extended to cover the remainder of the licence areas and in conjunction with the recommended lag programme may provide additional targets for follow up with IP, trenching and drilling. This would require an additional 700 line km to be surveyed. 3-D modelling should be conducted on the ground magnetic results collected to date.
The reinterpretation of the regional airborne magnetic and radiometric surveys has identified additional, untested structural corridors to the southwest of the structure hosting the Cerro Cubilete- Cerro de la Mina mineralisation, which warrnt investigation. Three strong potassium anomalies, one of which is coincident with the known mineralisation and a possible intrusive near Cerro Cubilete present additional targets. Further work in these areas would be dependent on the results of the regional lag and magnetic surveys.
The first phase exploration is estimated to take 10 weeks. The budget estimated for this phase is shown below.
A C A HOWE INTERNATIONAL LIMITED 92
TABLE 9. CORINA LICENCE PHASE 1 DETAILED EXPLORATION COST ESTIMATE Category Item Description Cost US
Trenching 5000m trenches @ $10 per m. $50,000 2000 samples @ $50 per sample. $100,000 Total $150,000 Geochemistry Channel sampling programme (4 km of target structures $10,000 sampled 20 m = 200 rock chip samples @ $50 per sample). Lag soil sampling programme 1,260 samples @ $50 per $63,000 sample). Total $73,000 Geophysics Mobilisation and Demobilisation. $4,000 Large scale high resolution magnetometry survey (700 line $70,000 km @ $100 per km). Gradient array resistivity and IP survey (100 line km @ $150,000 $1,500 per km). Total $224,000 Drilling 4,275m @ $180 per m inclusive $769,500 Assaying 4,250 samples @ $50 $212,500 Total $982,000 Personnel Geologist x 3 @ $5,000 per month. $37,500 Field Assistant x 3 @ $1,500 per month. $11,250 Total $48,750 Transport 4x4 Toyota Double Cab x 3. $15,000 Flights. $10,000 Total $25,000 Expenses Camp Costs @ $15,000 per month. $37,500 Total $37,500 Consulting Geophysical Report. $2,750 Consulting (5 days). $7,500 Field Report. $2,000 Total $12,250 Sub Total $1,552,500 25% Contingency $388,125 Grand Total $1,940,625
A C A HOWE INTERNATIONAL LIMITED (Samco Gold)
GAUSS KRUGER FIGURE 41: PROPOSED TRENCHING DIAGRAM ON IP CAMPO INCHAUSPE ZONE 2 CHARGEABILITY: CERRO DE LA MINA AND CERRO CUBILETE AREAS: SANTA CRUZ, ARGENTINA 94
25.1.2. PHASE 2 DRILLING
Contingent on the success of the first phase, it is proposed that additional drilling will be conducted. For budgetary purposes it is estimated that 5,000 m of core drilling may be required at Cerro Cubilete and 2,000 m at Cerro de la Mina for further definition of the mineralisation leading to resource delineation and that 3,000 m will be required on additional targets identified elsewhere on the licences. This will take an estimated six months to complete. The cost of this phase is shown below:
TABLE 10. CORINA LICENCE PHASE 2 DRILLING COST ESTIMATE Item Description Cost US$ Cubilete Drilling 5,000 m @$180 inclusive. $900,000 Assaying 5,000 samples @ $50. $250,000 Mobilisation and Demobilisation. $5,000 Total $1,155,000 Cerro de la Mina Drilling 2,000 m @ $180inclusive. $360,000 Assaying 2,000 samples @ $50. $100,000 Mobilisation and Demobilisation. $5,000 Total $465,000 Mercia East Drilling 1,500 m @ $180inclusive. $270,000 Assaying 1,500 samples @ $50. $75,000 Mobilisation and Demobilisation. $5,000 Total $350,000 Other targets Drilling5,000 m @ $180inclusive. $900,000 Assaying 5,000 samples @ $50. $250,000 Mobilisation and Demobilisation. $5,000 Total $1,155,000 Geologist x3 @ $5,000 per month. $90,000 Field Assistant x3 @ $1,500 per month. $27,000 Total $117,000 4x4 Toyota Double Cab x 2. $36,000 Flights. $15,000 Total $51,000 Camp Costs @ $15,000 per month. $90,000 Total $90,000 Consulting (10 days). $15,000 Report and preliminary resource estimation. $25,000 Total $40,000 Sub Total $3,423,000 25% Contingency $855, 750 Grand Total $5,433,750
A C A HOWE INTERNATIONAL LIMITED 95
26. REFERENCES
ACA Howe International Limited, 2009-2010 Satellite imagery interpretation of Samco Resources Limited Licences in Santa Cruz, Argentina. ACA Howe International Limited, 2010, GIS compilation of Samco Resources Limited licences in Santa Cruz, Argentina. ACA Howe International Limited, July 2012, Final Report Image Interpretation of Corina and Mercia Permits, Argentina. AGMS (University of Buenos Aires), April 2013, Informe de estudios mineralógicos minerales de mena e implicancias metalogenéticas y de gossan: Proyecto Corina, Chubut (Argentina) Preparado para: Samco Gold S.A.by Dra. Diana Mutti, Dr. Alejandro Di Marco, Lic. Carolina Méndez AGMS (University of Buenos Aires), Octubre 2013, Informe de estudios mineralógicos: minerales de mena - petrografía e implicancias metalogenéticas, Proyecto Corina, for Samco Gold By: Dra. Diana Mutti, Dr. Alejandro Di Marco y Lic. Leopoldo Serpa Callan N.J, 12 December, 2011 Report on Geological Mapping: Corina Property, Cerro Moro District, Santa Cruz Province, Prepared for: Samco Gold Limited by, NJC Servicios de Geologia y Exploracion EIRL Giacosa, R, Zubia, M, Sánchez, M and Allard, J, 2010. Meso-Cenozoic tectonics of the southern Patagonian foreland: Structural evolution and implications for Au-Ag veins in the Eastern Deseado Region (Santa Cruz, Argentina). Journal of South American Earth Sciences v.30,p. 134-150. Guzmán, C, Gosling, W, Coupland, D, Sanford, A, Sinha, K, and Gabora, M, 2012, Preliminary economic assessment of the Cerro Moro gold-silver project, Santa Cruz, Argentina. 43-101 Technical report for Extorre Gold Mines, March 30,2012. Instituto de Geociencias Básicas, Aplicadas y Ambientales de Buenos Aires (IGEBA) Departamento de Cs. Geológicas, Facultad de Ciencias Exactas y Naturales Universidad de Buenos Aires Noviembre de 2012, Procesamiento e interpretación de datos de magnetometría aérea en el Macizo del Deseado, provincia de Santa Cruz. By Silvana E. Geuna and Guillermo H. Ré Delfino Instituto Dde Recursos Minerales (Inremi), Octubre de 2013, Prospección Geoeléctrica del Area Sur del C° Cubilete. Proyecto Corina. Provincia de Santa Cruz, Argentina Producido por: Samco Gold. Dirección del Proyecto: Dr. Isidoro B. A. Schalamuk y Mario Tessone Geólogos participantes: Joaquín Nigro, Horacio Echeveste, Mercedes Carlini Dr. Jens Jasper, 20 April 2009. The Santa Cruz Gold – Silver Exploration Licenses Santa Cruz Province Republic Of Argentina. Report prepared for Samco Resources Ltd. Fernando Chacon, Matt Williams, Glen Van Kerkvoort, Matt Houston, 2009, Cerro Moro Au-Ag epithermal vein deposit, Deseado Massif, Argentina - Exploration, discovery and resource development,Exeter Resource Corporation, Puerto Deseado, Argentina. in 2009 NewGenGold Conference, Perth, 23 November 2009 Mariana Resources N.L. website Phillipsona S.E. and S.B. Rombergerb, 2004. Volcanic stratigraphy, structural controls, and mineralization in the San Cristobal Ag–Zn–Pb deposit, southern Bolivia. Journal of South American Earth Sciences 16 667–683, Quantec Geosciences, October 9th 2012, Total Field Magnetic Survey Geophysical Report, El Dorado and Corina Projects, for Samco Gold Ruvalcaba-Ruiz C. and Tommy B. Thompson December 1988, Ore deposits at the Fresnillo Mine, Zacatecas, Mexico. Economic Geology, v. 83, p. 1583-1597, Samco Gold, Junio 2012, Relevamiento geológico minero concesiones Corina, Corina i y Mercia, informe de avance by Lic. Alejandro Conde Serra Lic. Martín Auriemma Samco Gold February 04, 2013 CORINA MEMO (internal update) by Marcelo Ortiz Samco Gold weekly reports Shatwell, D Monthly reports for Samco Gold Shatwell D, April 2013 Cerro Cubilete: drill core examination and drilling recommendations. For Samco Gold Sillitoe R, 2009, Geology and potential of the Sierra Blanca Precious-metal prospect, Santa Cruz, Argentina. Report prepared for Mariana Resources Argentina S.A.
A C A HOWE INTERNATIONAL LIMITED 96
Snowden, February 2010, Technical Report on the Navidad Project, Chubut Province, Argentina, for Pan American Silver Corp.
A C A HOWE INTERNATIONAL LIMITED 97
27. DATE AND SIGNATURE PAGE
A C A HOWE INTERNATIONAL LIMITED Geological Consultants
CERTIFICATE of AUTHOR
I, David J Patrick, do hereby certify that:
1. I am Director and Senior Geologist of ACA Howe International Limited of Wingbury Courtyard Business Village, Upper Wingbury Farm, Wingrave, Aylesbury, Buckinghamshire HP22 4LW, UK 2. I graduated with a Bachelor of Science degree in geology from the University of Manchester in 1967. In addition, I have obtained a PhD in geochemistry from the University of Manchester in 1970. 3. I am a Fellow of the Institution of Mining and Metallurgy and a Fellow of the Australasian Institute of Mining and Metallurgy. 4. I have worked as a geologist for a total of 40 years since my graduation from university. 5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43- 101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101. 6. I am responsible for the preparation of all sections of the report titled “Technical Report on the Corina Property, Santa Cruz Province, Argentina”, dated the 28th of February 2014 (the “Technical Report”) for Samco Gold Limited. I most recently visited the Corina and Mercia properties February 13th to February 16th, 2013. 7. My prior involvement with the properties that are the subject of the Technical Report was as author of a technical report dated the 20th May, 2011, as amended 23rd June, 2011. 8. I am independent of Samco Gold Limited applying all of the tests in section 1.5 of National Instrument 43-101. 9. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form. 10. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
Dated this 28th February 2014.
------David J. Patrick
A C A HOWE INTERNATIONAL LIMITED