An exploration and exploitation agreement with an Argentine company sets the stage for Plata Mining (ASE) to begin work on the Helvecia zinc property in the province of La Rioja.
The property consists of a 2,000-hectare cateo (mineral concession) and 11 minas (mining licenses) which were granted to past-producing mines in the cateo area.
The zinc mineralization at these past producers occurs as high-grade lenses and pods at the unconformity between an Ordivician formation of limestones and dolomites and a Carboniferous formation of conglomerates, red beds, bleached sandstones and continental sediments.
The exposed mineralization is oxidized and typically averages up to 40-49% zinc, 0.2-0.4% lead and 40-70 grams silver per tonne over 0.5 to 1.2 metres. The primary sulphide mineralization exposed underground at Helvecia returned up to 37.1% zinc, 2.2% lead and 135 grams silver over 3.5 metres.
During the 1970s, Cia Minera Aguilar drilled 4 holes north of the Helvecia mine area and encountered primary sulphide mineralization at the unconformity, with one hole averaging 9.6% zinc over 3.85 metres.
Watts, Griffis & McOuat describes the mineralization as apparently Mississippi Valley-type and says there is “considerable potential to outline minable reserves.”
Plata can acquire a 90% interest by spending US$1.3 million and paying $300,000 over three years. After the earning phase, the project will be held by a joint venture owned 90% by Plata (which must advance it to the bankable feasibility stage) and 10% by the Argentine company.
Following the feasibility study, each party must contribute its percentage share of all costs necessary to take the project into production. At this point, the Argentine company will have the right to make a 1-time election either to retain or convert its participating share position into a 10% net profit interest. If it elects to convert, Plata will own all the shares of the joint-venture company.