EXPLORATION ROUNDUP — Farallon continues drilling in Mexico

Exploration of the Campo Morado property in Guerrero state, Mexico, by Farallon Resources (FAR-V) has proved encouraging.

The property is situated in Lower Cretaceous rhyolitic metavolcanics and metasedimentary rocks, which are known to host numerous volcanogenic massive sulphide deposits. Farallon controls more than 2,781 sq. km in this region, which lies between Mexico City and Acapulco.

Mineralization was discovered there in 1898 and several mines operated until the outbreak of the Mexican Revolution forced their closure in 1912. After the revolution ended in 1920, development there was sporadic until the 1940s.

Ronald Thiessen, a director for Farallon, says that the company has completed more than 151 drill holes, totalling 27,000 metres, on the property. Results, however, have been received for only 79 holes, owing to a lengthy assay process.

To date, drilling has focused on two main targets, the Reforma deposit and the Naranjo zone.

The Reforma deposit, the larger and more developed of the two targets, has been drilled over a strike length of 600 metres and to a depth of 400 metres.

Drilling intercepted two distinct metal-rich horizons. The lower horizon contains high-grade gold and silver mineralization with high values for copper, lead and zinc, and the upper horizon contains significant copper and silver mineralization.

Intercepts from 37 holes drilled into the lower zone returned an average thickness of 7 metres with grades in the order of 4.73 grams gold and 238 grams silver per tonne, plus 0.58% copper, 1.88% lead and 4.53% zinc.

Drilling at the upper zone, which consists of rich copper-silver mineralization, intersected an average of 8.6 metres grading 49 grams silver, plus 2.1% copper.

These results, according to the company, could double a resource, calculated in 1912, of 7.7 million tonnes grading 2.26 grams gold and 127 grams silver, 1.04% copper.

The Reforma deposit has six levels of underground development and 12,000 ft.

of workings. Historical production focused on oxide mineralization. The vein structure strikes northwest and dips moderately, though it flattens at depth.

The Naranjo zone, which lies 1 km south of the Reforma, contains three principal massive sulphide horizons. The two upper horizons occur in the top and central portions of the felsic volcanic stratigraphy, while the lower horizon corresponds to the extension, into the Naranjo, of the Reforma deposit.

Drilling at Naranjo has also been successful, though grades there are generally lower. Hole N52 encountered 4.6 metres grading 4.92 grams gold, and hole N79 hit 16.25 metres of 4.39 grams gold and 175 grams silver.

Exploration Potential

The potential for extensions to these stratabound zones, according to Thiessen, is good. Both the Naranjo and the Reforma remain open along strike.

At Reforma, the surface gossan has been traced to the northwest for another 1,600 metres. Additional drilling will test for continuity between the two deposits, as well as extensions of the Naranjo to the south. Two rigs are drilling at Naranjo, and one at Reforma.

Another promising zone at the Campo Morado property is the Suiana deposit, which, thus far, has not received as much exploration as the Reforma and Naranjo. Farallon, however, plans a round of drilling there once a rig becomes available.

Historical reports indicate the deposit contains about 5.5 million tonnes grading 3 grams gold and 574 grams silver, including 0.4% copper and 7.5% combined lead-zinc. Those figures will be confirmed or revised once drilling begins.

Other prospective targets on the property include the Lucha and San Raphael deposits, some 3 km southwest of the Reforma.

Other companies active in the area include Valerie Gold Resources (VLG-V) and TVX Gold (TVX-T), which have a joint venture on the Mamatla Mineral Reserve to the northwest of Campo Morado. Peoles, a Mexican miner, operates the Tizapa mine and several exploration projects in the area with several joint-venture partners. Teck (TEK-T) operates the Nukay gold project, 50 km southeast of Campo Morado.