Juniors eye Mexican gold prospects (December 08, 2003)

Vancouver — The rising price of bullion has prompted a growing number of junior companies to explore targets in Mexico.

The latest company to set its sights on the country is Grayd Resource (GYD-V), which acquired the La India property in Sonora state, within the prolific Sierra Madre gold belt.

The 4.8-sq.-km project is 15 km northwest of the 3-million-oz. Mulatos deposit, being worked by Alamos Gold (AGI-V), and comprises two separate claims blocks separated by 1,050 metres.

Easily accessible by an all-weather road, the property covers the western end of a large hydrothermal system that is characterized by intense argillic alteration and silicification. Three zones of gold mineralization with artisanal workings have been identified.

The La India zone is marked by classic high-sulphidation-style gold mineralization over an area measuring 1,000 by 600 metres. Argillically altered intrusive rock is exposed at lower elevations, whereas vuggy silica exists above the argillic alteration and pervasive silicification on the ridge tops. A total of nine grab samples collected from the face and walls of three short adits driven into the altered intrusive returned up to 6.87 grams gold and 39.2 grams silver per tonne.

In the upper portions of the ridge, quartz-barite veinlets have been detected in 1-to-5-metre-wide structures that commonly cut the silicified rocks. Quartz-barite and kaolin veins cut the pervasively silicified rhyodacite volcanics throughout the area.

The La Espanola zone is 500 metres northwest of the La India zone and marked by intense silicification with anomalous gold values over a 500-by-700-metre area. Within the zone, a 20-metre-wide structure can be traced for 200 metres before being lost, owing to a lack of outcrop exposure. Five grab samples collected from an old cut on the northern end of the structure returned from 0.12 gram up to 32.5 grams gold.

Moving 300 metres to the west, two additional structures yielded values of 3.5 and 6.1 grams gold over 1 metre.

The La Cieneguita zone, 125 metres west of La Espanola, is marked by an 800-by-300-metre area of alteration with anomalous gold values. In the centre of this zone is a 10-to-20-metre-wide mineralized hydrothermal breccia that can be traced for 450 metres along strike. In total, 12 samples were collected returning values ranging up to 6.21 grams gold.

Grayd can earn a 100% inter- est in the property by paying US$555,000 over four years, including US$15,000 upon regulatory acceptance and US$20,000 in six months. The vendor retains a 1% net smelter royalty, half of which Grayd can purchase at any time in return for US$750,000.

On a production decision, the company has nine months in which to pay the vendors a one-time payment of US50 per recoverable ounce, based on the reserves outlined in a bankable feasibility study.

Grayd has 27 million shares outstanding and recently traded at 23.


Farther south, in Chihuahua state (but still in the Sierra Madre belt), the former management team of Corner Bay Resources is preparing to explore the El Indio property. (The Corner Bay team discovered the nearby Alamo Dorado Silver deposit and was subsequently bought out by Pan American Silver [PAA-T] earlier this year.).

Under the banner Stingray Resources (SRY-V), Peter Mordaunt, the president, has acquired three closely spaced concessions totalling 24 sq. km. Under the deal, Stingray can earn a 75% stake by paying $500,000, issuing 250,000 shares, and spending $1 million over seven years.

“In the central and northwestern area of the El Indio property, an elongated area of alteration approximately 1.5 kilometres long by 250 metres wide is readily visible,” says company geologist Victor Jaramillo. “Rock alteration, stockwork quartz veining, vuggy textures, chalcedonic quartz, anomalous arsenic, antimony, mercury, and samples with values above 1 gram gold per tonne are all very strong indications that the El Indio property may host an epithermal precious metal deposit.”

To fund exploration, Stingray has arranged a $5-million private placement of 5 million units priced at $1 a piece. A unit holds one share and half a warrant. A full warrant allows the holder to buy another share at $1.50 for two years.

The main El Indio property hosts a series of north-northwest-striking fault zones that range up to 300 metres in width.

Grab samples collected from the central part of a 1,500-by-250-metre limonitic area yielded 4.19 grams gold over 2 metres, while two contiguous samples taken from an old trench averaged 2.67 grams gold over 4 metres.

The northern part of the Delta 1 property is underlain by rhyolitic-to-dacitic lithic ignimbrites, whereas andesites and andesitic agglomerates are under the southern part.

One sample taken across 2 metres in a breccia structure returned 1.2 grams gold; another, collected in a zone of narrow veinlets, yielded 4.48 grams gold.

The third property in the land package is Cerro Pelonachi. Here, hydrothermal alteration was identified over 1 sq. km. Previous work returned up to 2.52 grams gold from a tourmaline-rich breccia.

Stingray has 5.7 million shares outstanding and recently traded at $1.15.

Ross River

In Sinaloa state, Ross River Minerals (RRM-V) is working the 200-sq.-km. El Pulpo property. The junior can earn a 50.1% stake in the copper-gold project from Almaden Minerals (AMM-T) by spending US$2 million and issuing 425,000 shares by April 30, 2008. Ross River can expand its interest to 60% by spending an additional US$1 million by April 30, 2010.

Situated northeast of Mazatlan, the project hosts several promising prospects over 12 sq. km.

The El Bagre target is marked by calc-alkaline intrusive quartz stockwork mineralization, where four grab samples collected over 1 sq. km averaged 1.43% copper plus 0.13 gram gold and 52.4 grams silver per tonne.

Moving 3 km to the east, the La Cetolla prospect hosts classic copper-gold porphyry mineralization. Work in the early 1970s outlined a 1,100-by-230-metre area on surface that averaged 0.94% copper. In 2002, Almaden sampled an area immediately to the south and got values ranging from 0.29% to 0.79% copper and up to 0.8 gram gold.

Some 1 km north of the El Bagre prospect is the Papaya target. Ross River collected nine samples from a vein, and seven of these returned more than 1 gram gold per tonne. The highest value was 30.7 grams gold. Subsequently, the junior collected 20 random samples over a 2-km strike length; the average values were 12.3 grams gold, 267.8 grams silver and 0.46% copper.

The La Trucha target lies 2 km north of the Papaya target and is marked by two float samples collected separately by Almaden and Ross River, 50 metres apart. These assayed 18 grams gold and 410 grams silver, and 24.4 grams gold and 792.2 grams silver. In total, 21 samples taken from the target averaged 8.64 grams gold, 357.6 grams silver and 1.12% copper. A further five samples, collected 1 km along strike to the southwest, averaged 3.42 grams gold, 222.3 grams silver and 1.11% copper.

Ross River is trenching and mapping the La Trucha and Papaya targets. Geophysical work and drill-testing will follow.

The junior has 15.9 million shares outstanding and recently traded at $1.09.


In San Luis Potosi state, Newport Exploration (NWX-V) has teamed with Cardero Resources (CDU-V) on the Franco gold project.

Situated 70 km southwest of the city of San Luis Potosi, the 9.8-sq.-km concession hosts a series of antimony-arsenic geochemical anomalies coincidental with hydrothermally altered rocks covering a 2-sq.-km area.

Newport can earn a half-stake in the property by paying $70,000 by March 3, 2004, and spending $250,000 by Aug. 3, 2004. Newport must also pay $60,000 by Sept. 30, 2004.

Newport has 8.2 million shares outstanding and trades at around 34.


In Nayarit state, Cream Minerals (CMA-V) has a drill turning on the Nuevo Milenio property, near Tepic. The 1,400-metre program will test several epithermal gold targets over a large area of alteration.

The first two holes are collared on the Cerro Chacuaco zone, which is marked by silicification, quartz veining and quartz stockwork up to 450 metres wide. Grab samples over the zone returned 0.68 gram gold and 246 grams silver.

At the Dos Hornos-San Miguel-Santa Gertrudes structure, the junior aims to drill two holes to test a 100-metre-wide zone comprising quartz with disseminated sulphides. Here, samples returned up to 6.5 grams gold and 326.6 grams silver over 6 metres.

Another northwest structure, One Bocas, has been traced for 400 metres along strike. Samples have yielded up to 0.48 gram gold and 127.6 grams silver. Cream has laid out two holes for this area.

At Chacuaco West, a single drill hole will test disseminated mineralization in argillic lithic rhyolite tuffs.

Cream has 24 million shares outstanding and recently traded at 45.


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