Manantiales
is an epithermal vein project located adjacent to and along
strike from Troy Resources Casposo mine, currently being commissioned.
Elementos has aggressively explored Manantiales, generating
several new prospects and drilling two of these during the
first year.
Location and access
Manantiales is situated 150 kilometres north-west of
the city of San Juan, and comprises a number of exploration
leases covering 97 square kilometres. Access is by sealed roads
to the town of Callingasta, 30 kilometres southeast of Manantiales,
and then via sealed and dirt roads. Local infrastructure and
logistics include power, water and labour. The relatively low
altitude is expected to allow year-round access for exploration
and development activities.
The Company has secured Troy's agreement to use Troy's access
roads into the Manantiales project. Additionally, Elementos
has secured regulatory approval of its Environmental Impact
Assessment ("EIA") covering all exploration activities,
including drilling, over the property for the next two years.
The EIA approval also permits earthmoving for construction of
access roads, drill pads, field camps, and underground adits
for sampling.
Tenement acquisition agreement
Elementos SA and Manantiales S.A. (an Argentinean
corporation) have entered into an agreement under which Elementos
SA has been granted a 48 month option to acquire the Manantiales
properties. As consideration under the option agreement, Elementos
SA agreed to pay Manantiales SA, unless the option has been
previously been exercised:
- US$35,000 on execution of the option;
- US$25,000 on 23 March 2010;
- US$30,000 on 23 September 2010;
- US$35,000 on 23 March 2011;
- US$40,000 on 23 September 2011;
- US$45,000 on 23 March 2012;
- US$50,000 on 23 September 2012; and
- US$75,000 on 23 March 2013.
Upon exercise of the option, the Company will acquire the
tenement and must pay Manantiales SA, US$1,300,000. The Company
may buy this royalty right at any time at a consideration
of US$ ,000,000. The agreement also provides for a net production
royalty at US$ 4 per troy ounce for the first 450,000 ounces
of gold product and reducing to US$ 3 per troy ounce once
that quantity of production is exceeded.
Prospectivity and exploration target
Manantiales is located within a relatively unexplored
low sulphidation epithermal district which includes the adjacent
Casposo epithermal gold-silver deposit, Castaño Nuevo
an abandoned gold mine (10 kilometres north-east) and the Castaño
Viejo an abandoned lead - silver - zinc -gold mine (13 kilometres
to the north).
The project area adjoins and is immediately to the north of
Troy Resources Casposo project. Troy Resources is operating
a 400,000 tonne per year carbon-in-pulp gold processing plant
based on a 0.4Moz gold and 17Moz silver resource. Manantiales
shares a similar geological environment including rock types
and structures that host Casposo mineralisation.
Historical Exploration
Early exploration activities focused on mapping and
sampling of two vein systems identified from historical rock
chip samples at Julietta Norte and La Puerta. During the initial
field program a new vein was discovered at Manantial, 1.5 kilometres
west of Julietta Norte. A program of mapping and surface channel
sampling the Manantial and Julieta Norte vein systems was completed
to drill ready status within six months of the Initial Public
Offering.
Recent exploration activities
The inaugural Manantiales diamond drilling program was completed
in September 2010 for a total of 19 diamond holes for a total
1,635.67 metres, comprising:
- Manantial vein - 15 holes totalling 1,383.02 metres;
and
- Julietta Norte - 4 holes totalling 252.65 metres.
Manantial vein drill results
The drilling program was designed to test the Manantial vein,
where high-grades were reported from channel sampling at surface,
at depths of between 30 and 110 metres below the surface.
The deeper diamond core holes, MDH019, MDH014 and MDH002,
intersected significant widths of high-grade gold with silver
credits. Significant intersections within the high grade zone
include:
- MDH019 - 12.6m at 5.04 g/t gold and 37 g/t silver from
82.78m
Incl. 5.2m at 11.3g/t gold and 65g/t silver from 83.4m
Incl. 0.7m at 57.4 g/t gold and 350 g/t silver from 85.3m
Incl. 0.73m at 13.8 g/t gold and 73 g/t silver from 87.15m
- MDH014 – 8.34m at 3.07g/t gold and 6g/t silver from
94.2m
Incl. 3.4m at 6.53 g/t gold and 12 g/t silver from 99.2m
Incl. 0.7m at 19.4 g/t gold and 28 g/t silver from 99.2m
This high-grade mineralisation appears to have a minimum
length of 80 metres, widths ranging between 4.5 to 12.5 metres,
and is still open along strike and to depth.
The shallower holes were typically lower grade than the surface
channel sample results; however, it is not known if this is
due to the drill spacing missing potential lenses or a possible
vertical control on the mineralisation in the system.
Manantial vein longitudinal section demonstrating the
high-grade zone and potential strike and depth extensions.
The company believes that the stratigraphy and
geochemistry (low silver, high mercury) suggests that the
Manantial vein represents a shallow epithermal level, suggesting
good potential for a preserved system at depth.
Julieta Norte vein drill results
The Julieta North vein system is located some 1.7 km southeast
of Manantial vein and represents the northern extension of
Troy´s Julieta prospect. Holes MDH015, MDH016, MDH017
and MDH018 tested over 175 metres of discrete pinching and
swelling vein in outcrop, at shallow levels. The northernmost
hole, MDH016, returned 1.02 metres at 4.4 g/t gold and 16
g/t silver from 29.73 metres, and MDH017 returned 0.75 metres
at 4.8 g/t gold and 7 g/t silver from 62.9 metres.
Since the vein has been mapped in outcrop to the north of
MDH016 and the geochemical signatures are similar to Troy’s
Julieta vein, drill testing to greater depth is planned during
the next phase of drilling.
La Puerta Este vein discovery
The La Puerta Este vein is situated 500 metres east of the
La Puerta vein. The vein trends north-south to north-west,
is dipping steeply to the west and extends 500 metres along
strike. The steep topography around the vein presents a vertical
exposure of 250 metres along strike, which will allow the
testing of the vein at different epithermal levels, which
was seen to be significant in the recent drilling of Manantial
vein.
As also previously recognised at the Manantial vein, the stratigraphy
and geochemistry (low silver, high mercury) suggests that
the La Puerta vein at surface represents a shallow epithermal
level, suggesting good potential for a preserved system at
depth.
Significant channel sample results include:
- Channel 30: 1.05 metres (0.85 metres true width) at 9.22
g/t gold and 12 g/t silver; and
- Channel 37: 1.6 metres (1.4 metres true width) at 5.66
g/t gold and 15 g/t silver.
Exploration strategy
The follow-up program will involve further drilling and the
continuation of the regional exploration program currently
underway.
Planning for a second drill program in early 2011 will be
aimed at:
- Testing extensions of high grade mineralisation along
strike and to depth at the Manantial vein;
- Second-pass drilling to check extensions along strike
and to test deeper levels of the Julieta Norte vein; and
- Exploratory drilling of the untested La Puerta vein system.
Project-scale exploration is continuing with the aim of identifying
new targets for drilling. The initial focus is to sample potential
extensions of the La Puerta group of vein systems, including
the La Puerta Este discovery. Target generation will first
cover the five kilometres of untested ground between the La
Puerta and Julieta Norte veins, and gradually work northwards
towards the Manrique prospect.
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