December 2011 Quarter - Activity Report

Transcription

1 Unit 9, 44 Belmont Ave Belmont WA 6104 (PO Box 745, Belmont, WA 6984) Perth, Western Australia Tel: ASX:AVK 31 January 2011 ASX ANNOUNCEMENT December 2011 Quarter - Activity Report Drilling & surface sampling confirm Porphyry Cu-Au-Mo Mineralisation at Cerro Blanco Project Three diamond drill-holes completed for 1,579 metres Pervasive porphyry Cu-Au-Mo mineralisation encountered in all holes Higher grade zones include: MC % Cu, 0.21 g/t Au, 248ppm Mo (Cu%Eq 0.81% Cu) from 357m incl: 0.66% Cu, 0.25 g/t Au, 244ppm Mo (Cu%Eq 1.03% Cu) from 358m MC % Cu, 0.11 g/t Au, 225ppm Mo (Cu%Eq 0.58% Cu) from 158m MC % Cu, 0.20 g/t Au, 36ppm Mo (Cu%Eq 0.33% Cu) from 5m Surface sampling and mapping extend Copper Hill mineralised zones Planning underway for continued drilling Despoblados Prospect access road completed Despoblados surface sampling yields positive results, e.g. 0.28g/t Au, 33.58g/t Ag, 117ppm Cu, 72ppm Mo Tres Amigos Project Au-Cu drilling targets defined San Francisco Project access road (55km) completed East Sancarron Project exploration commenced Figure 1 Mineralised zone (Sample No 6841) in Copper Hill access road: 11m averaging 0.77g/t gold ACN

2 Summary Argentina Mining Limited (ASX:AVK) ( Argentina Mining or the Company ) completed its Phase 2 deep diamond drilling program at the Copper Hill Prospect, part of the Cerro Blanco Porphyry Cu-Au-Mo Project, in December This phase commenced in mid-september 2011, with an exploration update being released to ASX on 24 November Three diamond drill-holes comprised this phase; they were designated MC-2 (487m), MC-4 (421m) and MC-5 (671m), for a total advance of 1,579m (Table 1). These holes tested targets indicated by the two initial 400m deep proof-of-concept diamond drillholes, MC-1 and MC-3, ground magnetics completed in the June 2011 Quarter, and by the High Chargeability Zone (HCZ) target interpreted from Induced Polarisation and Resistivity (IP) geophysical surveying completed in the September 2011 Quarter. All of these holes intersected pervasive grade disseminated porphyry copper-gold-molybdenum mineralisation. Several zones of higher grade were reported (Table 2). Gold occurs consistently throughout the mineralised system, with grade varying in direct association with that of copper and molybdenum. A 122m near-surface gold-enriched zone was intersected in MC-5, including 24m averaging 0.2 g/t Au and 0.16% Cu from 5m depth (Table 2). The target HCZ was not completely tested because two holes, MC-2 and MC-4, were terminated before target depth due to technical issues encountered by the drilling contractor. Extensive bulldozed road and drill pad excavations at Copper Hill exposed large zones of weathered bedrock under a thin layer of talus. These zones were systematically sampled, with highlights including an 11m long zone averaging 0.77g/t Au (Figure 1). On completion of the drilling program, a Chilean geological consultant, Orlando Alvarez Campos, who has extensive experience in porphyry copper mining and exploration, comprehensively reviewed the exploration undertaken at Copper Hill. The consultant is now preparing an Independent Report on the project for the Company. Exploration continued at the Tres Amigos gold-copper project. Results of an IP survey conducted in September 2011 were interpreted by an independent geological consultant, with proposals made for reconnaissance drilling. Preparation was undertaken for exploration at the San Francisco Cu-Au-Ag Project, 140km north of Cerro Blanco, with the construction and refurbishment of a 55km access road. Reconnaissance exploration commenced at the Company s East Sancarron Cu-Au Project, located 37km south-east of Barrick s operating Veladero gold mine (12Moz Au Reserves). Access to the neighbouring La Ortiga and San Crispin Projects was assessed, with exploration planned to commence at San Crispin in late January

3 Cerro Blanco Cu-Au-Mo Project Diamond Drilling The Company's Phase 2 drilling program commenced on schedule on 15 September Technical issues, including difficult ground conditions and drilling equipment failure, resulted in the program finishing behind schedule on 15 December Table 1 Copper Hill Diamond Drillhole Collar Data Drillhole No Northing* (mn) Easting* (me) Collar RL (m) Azimuth (Deg Mag) Dip (Deg) Depth (m) MC MC MC MC MC Vertical Total Advance 2,379.8 *Coordinate System: Gauss Kruger, Zone 2, Campo Inchauspe, as used in Argentina Pervasive copper-gold-molybdenum mineralisation and alteration is visible in core from all three drill-holes, confirming the existence of a potentially large, typical Andean porphyry copper-gold-molybdenum style deposit. Table 2 Copper Hill Significant Drilling Intercepts - Phase 2 drilling Drillhole No From (m) To (m) Length (m) Cu % Au g/t Mo % CuEq* % MC including MC MC MC MC MC MC As reported in ASX release 24 November 2011, the first Phase 2 diamond drill-hole MC-4 was terminated in mineralisation at 421m before fully penetrating the IP High Chargeability target. Although the hole did not attain its design depth, porphyry Cu-Au-Mo style mineralisation was intersected throughout the hole, with a significant zone averaging 0.47% Cu, 0.21g/t Au and 0.25% Mo (*Copper Equivalent 0.81% Cu) from 357m (Table 2). 3

4 The second Phase 2 drillhole, MC-5, was drilled vertically to intersect any potential supergene enrichment zone and the principal key HCZ geophysical target. A distinct and highly anomalous gold-mineralised zone reported in the first 122m of this drill-hole, including 24m averaging 0.2 g/t Au from 5m below surface (Table 2). The near-surface location and thickness of this zone is encouraging, suggesting potential for discovery of gold cap - style deposits which has potentially positive implications for any future resource development. This zone has so far been intersected by only one hole and further testing with shallow drilling is warranted to determine its depth and lateral extents. The third Phase 2 drillhole, MC-2, was sited 138m north of the MC-4 collar and drilled on an azimuth oblique to grid east to test a mapped zone of mineralised dacitic breccia and to fulfil the deeper objectives of MC-4 which had finished short of its target. MC-2 was terminated at 487m, also before achieving target depth, although it intersected pervasive disseminated porphyry Cu- Au-Mo mineralisation, with some higher grade zones reported (Table 2). Figures 10 and 11 at the rear of this report depict cross sectional geological and alteration interpretations from the Phase 2 drilling. Phase 2 total drilling advance was 1,579m, 421m short of the 2000m planned in this program. To date, a total of 1,428 diamond drill core samples have been prepared for geochemical analysis and QA/QC testing. Road and Drill Site Construction Access roads built using a D8-T bulldozer at the Copper Hill prospect now total 13km. Five drill sites have been constructed. A further 60km of track have been constructed or upgraded at Cerro Blanco for internal communications and drill pad access. Surface Geochemical Sampling A total of 311 geochemical rock-chip and channel samples have been collected at Copper Hill, with the objective of confirming and extending known mineralised areas. Rock-chip and channel sampling has highlighted several zones of anomalous copper, molybdenum and gold, with grades up to 0.93% Cu (Sample # 5057) and 0.77g/t Au over a composite 11m sample (Sample # 6841) in channel sampling of one access track embankment (Figure 1). This composite sample is being re-split at 1m intervals and re-analysed to identify any higher grade zones. The result is viewed as encouraging as it may define potential for either a disseminated low grade near-surface gold-cap or a mineralised stock-work. These results are still being compiled and interpreted. Surface geochemical sampling results and geological and alteration mapping have defined an obvious zone of geochemical continuity of copper mineralization in the northern part of Copper Hill (Figure 2a) that has yet to be tested by drilling. 4

5 Molybdenum (Figure 2b) also shows an anomalous distribution along an inferred WNW-ESE trend, coincident with a number of major observed structures. This trend highlights potential in the central sector of Copper Hill. The distribution of gold anomalism (Figure 2c) highlights an area with gold potential to the north-east and south-east of the Phase 1 and 2 drilling areas. Figures 2a-c - Thematic maps of surface geochemistry for (from L to R) Cu, Mo and Au Figures 12 and 13 at the rear of this report depict the current state of geological and alteration mapping at Copper Hill. Independent Expert Review Following the completion of the Phase 2 drilling at Copper Hill, Argentina Mining invited a Santiago, Chile, based independent geological expert, Orlando Alvarez Campos, to review the Company s progress on the project. Mr Alvarez is a professional geologist, with over 40 years experience in the porphyry copper industry. He has held senior executive positions with CODELCO CHILE and Compañía Minera Cerro Colorado (now a subsidiary of BHP Billiton) and as a senior geological consultant since He was extensively involved in Chuquicamata, the world s largest open pit copper mine and has worked on numerous other projects. Mr Alvarez and his consulting group are preparing a comprehensive report on exploration at Copper Hill to assist with exploration planning. This report is due February Despoblados and La Fortuna Au-Ag-Cu Prospects, Cerro Blanco Project Concurrently with exploration at Copper Hill, the Company constructed 16.6km of access road to the Despoblados La Fortuna prospect areas, about 10km to the south-west of Copper Hill. This was to facilitate access for mapping and geochemical sampling, and for possible future drilling (Figure 3). The main feature at Despoblados is an extensive and visually prominent outcropping zone of pervasive alteration where limited previous exploration reported anomalous gold in rock samples (AVK Prospectus dated 25 October 2010). 5

6 Detailed sampling and mapping is now underway. Early field mapping and sampling shows that the predominant alteration-style is Quartz-Alunite, characteristic of high sulphidation mineralising systems. These altered rocks are overlain by a thick silicified breccia or silica cap, cut by chalcedony and crystalline quartz veins and veinlets. A rock-chip channel sample of these rocks (Figure 4) has provided encouraging assay results of 0.28g/t Au, 33.58g/t Ag, 117ppm Cu and 72ppm Mo over 0.5m (Sample No. 5084), while rock chip sample numbers 5065 and 5066 assayed 0.27g/t Au, 0.6g/t Ag, 0.19% Cu, 15ppm Mo and 0.29g/t Au, 3.0g/t Ag, 0.27% Cu, 24ppm Mo, respectively. Figure 3 - New Despoblados access road Figure 4 - Geochemically anomalous silicified and brecciated outcrop at Despoblados San Francisco Cu-Au-Ag Project The Company s San Francisco Project is located 140km north of Cerro Blanco and 50km north of the Casposo gold mine operated by Troy Resources Limited. Previous exploration at San Francisco established a number of porphyry copper-gold and epithermal gold-silver targets in Miocene volcanics and intrusives, associated with regional-scale structural features and intense hydrothermal alteration anomalies. Sampling by Western Mining Limited in 1996 reported gold grades in rock chip samples up to 2.38 g/t Au. In December 2011, AVK built or repaired 55kms of road (Figures 5 and 6), to gain access to the first target area in the Las Leñas Valley for reconnaissance mapping and geochemical sampling, scheduled to commence in February Figure 5 Trace (in red) of rehabilitated mining road to the Las Leñas Prospect at San Francisco (Google Earth image) Figure 6 Photo - part of new Las Leñas access road 6

7 Tres Amigos Au-Ag-Cu Project Tres Amigos is located 52km north-east of Cerro Blanco. An independent consulting geologist has completed interpretation of modelled 3D geophysical data from a 33 line kilometre IP survey undertaken on 6 lines spaced 300 metres apart at the project during the September 2011 Quarter. Interpretation of geophysical data, mapped geology and structure has defined several targets for supergene-enriched porphyry copper. Two drill-holes, 200m apart, are proposed. The principal geological feature at Tres Amigos is a prominent intrusion of quartz diorite into a folded and regionally-metamorphosed Precambrian to Palaeozoic fine-grained phyllitic sedimentary suite of rocks. This intrusion underlies the south-western sector of the tenement area and has caused fracturing, brecciation and contact metamorphism of the intruded country rocks and is also associated with propylitic (quartz-sericite-pyrite) and local potassic alteration. Small-scale historical mining has been undertaken on vein deposits hosted by radial shear zones around the margins of the intrusive body. These veins are characterised by high proportions of sulphides and low quartz, with gold and copper content being enhanced by oxidation. Amiches Cu-Au Project No field work was undertaken at the Amiches Project during the December 2011 Quarter. Regional Exploration East Sancarron, La Ortiga and San Crispin Projects Late in December 2011, Argentina Mining commenced exploration on its Regional Exploration group of projects, East Sancarron, La Ortiga and San Crispin. These three project areas are the northernmost of the Company s tenement portfolio and are located within a 50km radius of Barrick s operating Veladero Gold Mine which produced 1,120,000 ounces of gold in Initial exploration focussed on East Sancarron, a copper-gold project to which good access is obtained via a formed road which is maintained by Barrick Gold. The nearby La Ortiga and San Crispin projects lie within 10km of formed roads. Access to these projects from the formed roads was investigated during the East Sancarron reconnaissance program, with plans being prepared for construction of connecting access into the properties and improvement of existing exploration tracks. The East Sancarron Project (Figure 7) encompasses an area of 62.8sq.km. in the mountainous Valle de Cura which is a recognised world-class gold province. The area is underlain by large volumes of sub-aerial Tertiary andesitic volcanics and related sediments. The Tertiary rocks are deformed and faulted by east-dipping thrust-faults and are partially obscured by huge volumes and thicknesses of unconformably overlying younger glacio-fluvial sedimentary deposits. 7

8 Figure 7 - Location - East Sancarron Project (yellow outline on Google Earth Image) The exploration targets are altered and mineralised Tertiary volcanics and coeval intrusive rocks. Several areas of interest were mapped and sampled during this reconnaissance survey e.g. altered, ferruginous and silicified andesitic volcanics (Figure 8 - Sample # 5758), with a suite of stream sediment, rock chip and talus samples submitted for geochemical analyses. Figure 8 - Outcrop of altered, ferruginous andesitic agglomerate (Sample # 5758) at East Sancarron 8

9 Figure 9 - Tertiary volcanics showing evidence of thrust-stacking, with some sample locations marked Reconnaissance exploration carried out at East Sancarron revealed lithological units with known mineralization potential, in the regional metallogenic context. Results of geochemical sampling are pending and are expected to enable refinement of areas of highest exploration potential. Regional Mining, Exploration and Legislative Developments Argentina Mining monitors activities at several major porphyry copper projects located within the same region as the Company s Cerro Blanco Project. Developments, particularly in regional miningrelated infrastructure, have the potential to impact positively on the Cerro Blanco Project. In December 2011, Xstrata (LSE:XTA) published an increased Mineral Resource Estimate for El Pachón of 2.740Bt at a grade of 0.48% copper, using a cut-off grade of 0.2% copper. Production commencement is scheduled for On 19 January 2012, shareholders of Minerás Andes Inc. (TSX:MAI) and US Gold Corporation (NYSE: USG) approved the creation of a merged entity McEwen Mining Inc. which will own 100% of the Los Azules Porphyry Cu-Au Project (Mineral Resource 1,037Mt at 0.55% Cu, 0.07 g/t Au). Stillwater Mining Company (NYSE:SWC, TSX:SWC-U) intends to expend US$25 million per year over five years to further explore and evaluate its Altar Porphyry Cu-Au project which it acquired in 2011 for a reported US$487m. Coro Mining Corp. is challenging the provincial government of Mendoza which in August 2011 declined to ratify Coro s already-approved Environmental Impact Declaration ("EID") on its San Jorge Porphyry Copper-Gold Project, blocking progress to mining. San Jorge is located 40km south-east of Cerro Blanco, in Mendoza Province. Coro Mining announced that is also finalizing an engineering study for an alternative development strategy for San Jorge. El Pachón, Altar, Los Azules and San Jorge are located within a 100km radius of Argentina Mining s Cerro Blanco Project. 9

10 March 2012 Quarter Planned Activity Exploration planned for the March 2012 Quarter includes: Completion of the Independent Expert s review of the results of all exploration at Cerro Blanco. Detailed geological and structural mapping and geochemical sampling at Copper Hill. Further drilling is currently being planned to test the northern and eastern flanks of Copper Hill for leached cap gold and copper zones and underlying primary porphyry copper-goldmolybdenum mineralisation. Regional rock chip and stream geochemistry over the La Fortuna and Despoblados prospects in the southern Cerro Blanco Project area. Structural mapping, verification geochemistry and possible scout drilling at Tres Amigos. Reconnaissance mapping and geochemistry at San Francisco. Reconnaissance exploration and access development at the northernmost Regional Project areas at East Sancarron, La Ortiga and San Crispin. Option Agreements The following option payments were made during the Quarter, as scheduled in Argentina Mining s Prospectus dated 25 October 2010: Project Date Due US$ Cerro Blanco 31/12/11 50,000 1 Amiches 1 31/12/11 30,000 Amiches 2 31/12/11 10,000 Amiches 4 10/12/11 5,000 Amiches 5 10/12/11 5,000 Tres Amigos 23/10/11 15,000 Tres Amigos 15/12/11 15,000 San Francisco 31/12/11 30,000 2 Regional Exploration 30/12/11 25,000 Notes 1 and 2. US17,000 and US$10,000, respectively, of these amounts which are payable to Jorge Bastias are required by ASX to be paid in Restricted Securities of the Company, the number of which are to be calculated by dividing the higher of $0.20 and the Market Value (the volume weighted average price of the Company s shares as traded on ASX over the five trading days prior to the date of the cash payment). The Restricted Securities will be escrowed until 8 March Company Contacts: Eduardo Videla Managing Director +61 (0) Steve Shedden Chairman +61 (0) info@argentinamining.com.au Trading Codes The Shares trade under ASX code: The Options trade under ASX code: AVK AVKO 10

11 Notes: All samples were prepared and analysed at Alex Stewart Assayers, Argentina in Mendoza Province. Intercepts calculated using following assumed parameters: maximum 2m internal dilution, no external dilution, minimum mining width 2m, cut-off grades 0.2% Cu for intercept quoted for MC-4; 0.15g/t Au for intercept quoted for MC-5. * Copper Equivalent Calculation The Copper Equivalent (Cu%Eq*) calculation utilizes the total assumed commodity price for each metal (below), each multiplied by the required conversion factor and summed to yield a total commodity $ value for the relevant intercept, which is then expressed as an equivalent percentage of copper. These assay results are exploration results only and no allowance is made for recovery losses that may occur, should mining eventually result, as metallurgical and other process factors remain uncertain. However it is the Company s opinion that the elements considered in this calculation have a reasonable potential to be recovered and may constitute an important contribution to the resource being contemplated, as evidenced in similar copper-gold-molybdenum porphyry-hosted mines elsewhere in the world. The purpose of presenting this value is to provide a common single commodity unit for comparison of intercepts and the likely value of their contribution to any future resource determination. Copper Equivalent conversion factors and long-term commodity price assumptions used are as follow: - Copper Equivalent Formula = Cu% + (Mo ppm x ) + (Au ppm x 0.73) - Commodity price assumptions Cu (US$ 2/lb), Mo (US$ 15/lb), Au (US$ 1,000/oz) About Argentina Mining Limited Argentina Mining Limited is exploring a suite of gold and base metal projects located in the Andean Cordillera and Pre-Cordillera mountain regions in San Juan Province, Argentina. These projects range from previously established copper-molybdenum projects at Cerro Blanco, gold and copper mineralisation at Amiches, San Francisco and Tres Amigos and the three Regional Exploration tenement areas near Barrick Gold Corporation s major Veladero (Reserves 12Moz Au) and Pascua- Lama (Reserves 17.8Moz) gold operations. Exploration in 2011 focussed on the Company s flagship Cerro Blanco Project, where an Andeanstyle large-tonnage porphyry copper-gold-molybdenum mineralised system centred on the Copper Hill Prospect was tested by preliminary drilling, geophysics and geochemistry. Exploration has commenced at the Company s other projects, Amiches, San Francisco and Tres Amigos, which include significant vein gold-copper and porphyry copper targets, and the Regional Exploration Project near Barrick Gold Corporation s major Veladero (Reserves 12Moz Au) and Pascua-Lama (Reserves 17.8Moz) gold operations. Argentina Mining s cornerstone investor is lndependence Group NL (ASX: IGO), which holds a 19.9% stake in the Company. Competent Person s Statement Information in this report relating to Exploration Results is based on information compiled by Mr. Doug Bright, a Member of the Australasian Institute of Mining and Metallurgy and a director of and consultant to Argentina Mining Limited. Mr. Bright has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Bright consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 11

12 Figure 10 Interpreted Cross-section DDHs MC-2 & MC-4 showing Alteration (solid colour) & Lithology (hatching) - Copper Hill Prospect

13 152m continuous anomalous gold (>/= 0.1g/t Au) from surface to 152m, incl. - 24m at 0.2g/t gold from 5m to 29m. - 22m at 0.17% copper from 5m 27m. Figure 11 Interpreted Cross-section DDH MC-5 showing Alteration (solid colour) & Lithology (hatching) - Copper Hill Prospect

14 Figure 12 Geological Map of Copper Hill Prospect, Cerro Blanco Project

15 Figure 13 - Alteration Map of Copper Hill Prospect, Cerro Blanco project