VANCOUVER — GMV Minerals (TSXV: GMV; US-OTC: GMVMF) is shifting the narrative around its Mexican Hat gold property, 115 km east–southeast of Tucson, Arizona. Earlier this year the company was outlining a near-term production story underpinned by a large-scale, column leach metallurgical test, a 20-tonne bulk sample and indications of an upcoming preliminary economic assessment (PEA). After historic data review and prospecting, however, GMV’s team now has its eyes on a potential grassroots discovery at the Hernandez Hill target.
The company acquired a 100% interest in Mexican Hat during the commodity downturn in 2014. The property was explored by Placer Dome through the early 1990s, but had gone through sporadic ownership without systematic exploration campaigns. Current resource modelling shows that the core concessions host 23.5 million inferred tonnes averaging 0.7 gram gold per tonne for 531,400 contained oz., at a cut-off grade of 0.2 gram gold.
“We’re the first company that has really consolidated the entire package and all the historic drilling,” president and CEO Ian Klassen said during an interview.
“With the technical work we have on the resource right now, we could be in a position to file a mine plan of operation and get into the regulatory process. As we’ve advanced our work programs on the property, however, we’ve come to realize that there’s quite a bit of potential to not only expand existing resources, but also in terms of discoveries,” he added.
The company put together a $3-million, non-brokered private placement in August wherein it issued 5.8 million units priced at 50¢. A unit consists of a share and half a purchase warrant, with each full warrant is exercisable at 65¢ for 18 months.
The story focused on development options at the time, and GMV outlined a 14-hole program to expand resources.
The current geological model at Mexican Hat defines mineralization that is structurally controlled by fault-fracture (joint) zones and related breccias, commonly found in alkaline volcanic rocks.
Gold is found in the “free form within fractures” that are often hematite altered, and the outstanding resource is reportedly constrained to re-altered (hematized) fractures that crosscut Tertiary volcanic rocks.
GMV initially targeted a southeast extension of the H2 zone, which has been traced for 600 metres along strike, and reported that its first four holes found “multiple structural zones with intense hematization,” though assays were pending at press time.
The company uncovered something unexpected, however, during soil geochemistry sampling to test areas covered with Quaternary sand deposits on Hernandez Hill, which lies 500 metres northeast of the Mexican Hat resource.
GMV outlined a coincident mercury, antimony and arsenic anomaly, with anomalous gold values across the northeastern part of the survey. The combined material pathfinder geochemical signatures — including gold, and a broad area of silicification and alteration — could indicate a conventional epithermal target often found in the Basin and Range province of the southwestern United States.
“Hernandez Hill is still based on soil samples, but if you dig into the technical details, you’ll see why we’re excited,” Klassen said. “We’ve sourced out epithermal experts familiar with this signature, and the consensus has been: ‘Gentlemen, drill that immediately.’ The trick is figuring out where to collar the holes, but the upcoming lithogeochemistry and geophysics will help. We expect to have results [shortly].”
The soil grid area hosts two topographic highs and includes areas of outcrop exposure, which is reportedly “otherwise rare, away from Mexican Hat hill itself.” The topographic highs are underlain by a well-fractured andesite that is silicified with chalcedony and opaline quartz.
The soil sampling program is being expanded to the north to provide better coverage, while a lithogeochemical program of the silicified region is pending. GMV hopes to mobilize a diamond drill to the target in early 2017.
“We started into this deal saying: ‘No exploration. We have a near-term production story here,’” Klassen said. “An open-pit, heap-leach opportunity remains in focus, and even if the Hernandez Hill discovery doesn’t yield ounces, we’re confident we are well on our way to expanding the resource with our step-out program. But I will say it is fun being involved in exploration again, and it’s certainly great that we can add that discovery theme to our story.”
GMV shares have traded in a 52-week range of 8¢ to 70¢ per share, and gained nearly 60% — or 18¢ — since July, en route to a 49¢-per-share close at press time.
The company has 32.5 million shares outstanding for a $16-million market capitalization, and reported $3.7 million in net working capital at the end of September.