CERRO PRIETO PROJECT MINERAL CONCESSIONS LOCATION AND ACCESS

Transcription

1 Cerro Prieto

2 CERRO PRIETO PROJECT MINERAL CONCESSIONS The Cerro Prieto Project is comprised of three mining exploitation concessions encompassing 2,723 hectares in northern Sonora, Mexico. Oroco holds a 100% interest, subject to a 2% NSR in the 215 ha San Felix and San Francisco concessions which contain the past producing Cerro Prieto Mine and polymetallic (Pb-Zn-Au-Ag-Mo) deposit as well as 1.7 kilometres of strike length of the mineralized structure that hosts them. Oroco has completed the acquisition of these two concessions by making payments totaling US $2,500,000. Oroco also holds an unencumbered 100% interest in the 2,508 ha Cerro Prieto North mineral concession, 1.9 kilometres north of the San Felix concession. LOCATION AND ACCESS The Cerro Prieto Project is located in the Cucurpe Mining District, Sonora, Mexico. Access from the regional centre of Magdalena de Kino (population 40,000) is by 40 km of paved road and 12 km of well maintained dirt road. Major electricity transmission lines are less than 5 km from the project and water is available on site. The town of Cucurpe, 12 km from the concessions, and Magdalena de Kino are sources of labour. A major highway connects Magdalena de Kino with Hermosillo in the south and the state of Arizona 80 km to the north.

3 40 80 Kilometers USA Tucson MEXICO Nogales Magdalena de Kino Cerro Prieto Project Hermosillo Sierra Madre Pacific Ocean

4 MINERALIZATION Mineralization (Pb-Zn-Au-Ag-Mo) at the Cerro Prieto Mine is contained in veins within an approximately 25 m thick major shear zone which cuts all units from Jurassic to Lower Tertiary in age. Within this shear zone are contained hanging wall and footwall veins, both of which are one to three m thick and dip steeply, as well as a series of secondary veins, stringers zones and silicification, ranging up to 40 cm thick, which together with the major veins produce a continuous mineralized zone of 6 m to in excess of 30 m thick. This principal structure is a regional structure that can be traced for approximately 10 km north and south of the mine with approximately 6.5 km of strike length potential contained on Oroco s concessions. At the mine site the structure strikes 350 and dips vertical to 80. Known mineralization extends from surface to below the lowest level of the historic workings approximately 335 m below, and is open at depth, to the north and to the south. The Project is interpreted to be a strong mesothermal mineralizing system no older than Tertiary in age. There is evidence to suggest that a younger epithermal mineralizing system containing higher grades of gold was injected after the top of the older mesothermal system was eroded, accounting for the depth of significant gold mineralization found at Cerro Prieto, from surface down to 1050 Level; a minimum of 320 m elevation. HISTORY The Cerro Prieto Mine operated from 1906 with production reportedly between 500 and 720 tpd of gold and silver ore grading 3 to 15 g/ton Au and 50 to 60 g/ton Ag. Mining operations ceased in 1912 at the time of the Mexican Revolution and were never resumed. A number of factors, including the 1966 mining law requiring 51% Mexican ownership, prevented further mining in the 20th century. Companies conducting exploration programs from 1969 to 1999 issued consistent reports of mineralization at Cerro Prieto. In 1998 Morgain Minerals Inc. conducted a reverse circulation drill program of 23 holes collared from surface. Results of the drill program include: Width (m) Est. True Au g/t Ag g/t Pb % Zn % Width (m) inc inc

5 Based on this drill program, Morgain concluded that in the area drilled the average thickness of the mineralized zone is 18.3 metres over a strike length of 725 metres and a vertical extent of 400 metres. Morgain reported that the mineralized zone is open to the north, extending at least 400 metres in that direction, and is mineralized to at least 50 metres below the present water table and is open at depth. Assays of underground chip samples from the mineralized zones in the historic workings undertaken by Morgain yielded average grades of 0.34 g/ton Au, 178 g/ton Ag, 2.0% Pb, 4.8% Zn, and 0.75% Mo across an average thickness of 6.3 m. Morgain management estimated that within the area of drilling and detailed work there is a bulk underground resource* of 7,061,129 tons at an average gold equivalent grade of 4.40 g/ton and an open pit resource* of 1,391,000 with an average gold equivalent grade of 2.47 g/ton (See Table for metal prices used in calculations. Molybdenum values were not included in the calculations). Morgain s estimates were reported as follows: Table 1: (From Morgain Minerals Inc Annual Report filed on SEDAR May 19, 1999) Open Pit and Bulk underground Resources (see attached longitudinal Section for location of blocks) Open Pit Tons True Width Meters (feet) GRADE* Gold Equiv.g/t 2.47 Blocks and B Bulk Underground Block C Block D Block E Block F Total 1,391,000 1,553,244 1,275, ,930 3,414,445 7,061, (35.4) 11.7 (38.5) 15.5 (51.0) 9.8 (32.3) 24.0 (79.0) 18.3 (60.0) Including only High Grade Zone in Block F Block F Total 2,541,385 6,188, (49) 13.5 (44.4) *All values based on a price of US $290 per oz gold, US $5.00 per oz silver, US $0.25 per lb lead, US $0.50per lb zinc. * Confirmation drilling proposed in the Company s exploration program will test the reliability of the historical estimates, which the Company considers would correlate to the inferred resource category under the current definitions of resources as stated in NI Oroco is not relying on these estimates as current estimates. See the cautionary note on the back page of this brochure regarding these historical estimates.

6 EXPLORATION Exploration to date by Oroco has confirmed mineralization consistent with that reported by previous exploration programs. The average assays of the samples taken by Oroco across the vein on the 800 level haulage drift of the Cerro Prieto Mine are 3.45 g/t Au, 6.22 g/t Ag, 0.54% Pb, and 1.27% Zn over a sampled strike length of 408 metres. The highest assay values reported in Oroco s exploration to date are g/t Au, 1,050.0 g/t Ag, % Zn, >30% Pb, and 0.605% Mo. Oroco s 2008 CDN 1$ million exploration program will include a 6,000 metre diamond drilling program in the area of the past producing Cerro Prieto Mine to confirm Morgain s results and test below the historic workings. The program will also include surface mapping, sampling within the historic Cerro Prieto Mine workings and surrounding property, trenching across the vein systems at 200 metre intervals, ground geophysical surveys and initial small scale (bench) metallurgical testing of the typical types of ore to characterize the mineralization. The geophysical surveys will include a ground magnetic survey to outline major structures and alteration and a test induced polarization survey. Longitudinal Section: Cerro Prieto Mine (From Morgain Minerals Inc Annual Report filed on SEDAR May 19, 1999)

7 Looking north towards the historic producing Cerro Prieto Mine with excavations visible

8 *Note that the only source that the company is aware of showing the results of the Morgain drill program or the average gold equivalents for Blocks A to F and the historical estimates, which were reported as preliminary reserve estimates, are the January 18, 1999 and March 16, 1999 Morgain news releases and Morgain's 1998 Annual Report filed on SEDAR May 19, No technical report of the drill program or which includes the historical estimates is available to the company. Consequently, the company does not know: the location of the drill collars or intercepts; the methodology used in the calculations of the average individual grades for each block; the average individual grades of each metal used to calculate the gold grade equivalent for each block; or the methodology and assumptions and parameters used in the preparation of the historical estimates. Also, the historical estimates are stated to have been prepared by Morgain management. The company is not aware of the technical qualifications of Morgain's management. The company presumes that Morgain management calculated the estimates using only geometrical parameters and assays taken at widely spaced intervals, not geostatistical information or economic factors to back up their valuations as is required in the calculation of reserves and resources by NI However, the gold grade equivalents and historical estimates are based upon assay samples, including the assay results from the 23 reverse circulation drill holes, and measurements obtained by engineers and geologists and assay results from a certified lab and which are consistent with results set out in other historical reports and with the company s own results. In the company's opinion the drill program result are relevant and reliable. It is also the company's opinion that the exploration results available to Morgain would have provided it sufficient information to calculate the reported historical estimates and that, subject to categorization of the category of reserve or resource, based upon the historical information available and the company's own sampling results, the estimates as calculated are reasonable. Confirmation drilling proposed in the Phase I exploration program will test the reliability. Also note that Morgain s historical estimates were prepared prior to the implementation of the Standards of NI and that under the current definitions of resources and reserves as stated in sections 1.2 and 1.3 of National Instrument or in the CIM Standards on mineral resources and reserves, there is no category of preliminary reserve estimate. However, based upon the available historical information and the company s own results, the company is of the opinion that under current definitions of mineral resources and reserves under National Instrument and the CIM Standards, the Morgain estimates would correlate to the inferred resource category. There is no more recent estimate or more recent data available, that the company is aware of, other than that sampling data obtained by the company. A qualified person has not done sufficient work to classify the historical estimates as a current mineral resource. The historical estimate is not being treated as a current estimate and the historical estimates should not be relied upon as a current estimate. OROCO RESOURCE CORP West Hastings Street Vancouver, BC V6C 2W2 T: F: