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CERRO CHOIQUE PROJECT

Commodity: Au

Location
The Project is located around 26 km to the ESE from Los Menucos town on the central part of Río Negro province. The mining property covers almost 13,800 hectares.

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Local Geology
In the Cerro Choique Project was identified a low sulfidation epithermal system, “Hot Spring” type, formed by veins and stockwork of quartz – chalcedony, hydrothermal breccias, silica sinter and sectors intensely opalized (cap silica), distributed in an area of 2,000 X 600 meters.
The mineralization is located in a pyroclastic sequence of rhyolithic to dacitic composition of Triassic age known like Los Menucos Complex.
A regional fault of strike N 120°, divides the project into two blocks. In the north block is outcropping the epithermal system of Cerro Choique, whereas in the south block there is a vein system of quartz-fluorite and an extensive area intensely argillized, silicified and brecciated.
It was determined a minimum of 12 pulses of silica injection, three of which of explosive character (represented by hydrothermal breccias) and the rest formed by quartz – chalcedony veins, with a predominance of chalcedonic and opal bands.

Geochemistry
During the different phases of investigation, were collected around 900 surface samples and 1,010 from the drill holes.
Next table shows some of the maximum grades obtained:



Exploration
The first prospecting and exploration works, began in 1996 with the execution of a grid of systematic surface sampling covering an area of 1,600 m x 500 m. The grid had 50 m by side and in each intersection was realized a chip sampling. Final result was the collection of 166 samples that showed an average grade of 168 ppb Au, with extreme values of 35 ppb Au and 902 ppb Au.
Subsequently were executed 8,750 m of access roads; 4,650 m of exploration trenches and 1,076 m of reverse circulation drill holes. Were constructed eight trenches, separated by 300 m each and lengths from 250 m to 820 m. On the trenches were collected samples each 25 m, reached a total of 134. Besides, were drilled 6 holes (reverse circulation) with final depths between 139 m to 217 m.
During 1997 a new surface sampling program was carried out. In that case were taken 70 samples which showed an average grade of 212 ppb Au, while two samples showed grades of 1,330 and 1,734 ppb Au.

The next exploration phase may consider the following works:

• Geophysical Prospecting (IP Resistivity and Ground Magnetic).
• Geochemistry (to complete the surface sampling over other sectors of the mining property).
• Special studies (PIMA, chalcography, petrography and fluid inclusions)
• Drilling program (minimum of 6,000 m DDH).

Preliminary Results
• Cerro Choique Project form part of a low sulfidation system, Hot Spring type.
•Were found evidences of repeated episodes of boiling (hydrothermal breccias, calcite pseudomorph type “bladed”, rhombic adularia). The importance of that resides in the fact that boiling process is the main mechanism for gold deposition in this type of systems.
• Veins and veinlets are formed essentially by chalcedony and opal, being less abundant those of quartz. In sectors where sugary quartz bands are predominant, gold grades reach until 2 ppm.
• According to the suggested textural model, the mineralized zone has not been exposed by the current erosion level and all indicates that exist very good possibilities to find a bonanza type deposit at depth. The macroscopic and microscopic studies, suggest that current erosion level could be between 0 and 200 m from the paleosurface.