Technical Reports - Mammoth Resources Corp.

Transcription

GEOLOGICAL REPORT AND EXPLORATION SUMMARY
OF THE URIQUE PROJECT
Municipality of Urique
CHIHUAHUA STATE,
MÉXICO
December 14, 2011
Submitted by
P. C. Gibson, Ph.D., CPG
Hacienda del Nopal 6506
Col. Haciendas del Valle
Chihuahua, Chihuahua, CP 12317
México
Prepared for
MAMMOTH CAPITAL CORP.
#1610 – 1066 West Hastings Street
Vancouver, B.C.,
Canada, V6E 3X1
In Compliance with NI 43-101
GEOLOGICAL REPORT AND EXPLORATION SUMMARY OF THE
URIQUE PROJECT
Table of Contents
TABLE OF CONTENTS
i
DESCRIPTION OF TERMS ......................................................................................................... iv
CONVERSIONS............................................................................................................................ vi
STATEMENT OF QUALIFICATIONS AND CONSENT ......................................................... vii
CONSENT ..................................................................................................................................... ix
0.0.
Summary ............................................................................................................................. 1
1.0
Introduction......................................................................................................................... 4
2.0
Reliance on Other Experts .................................................................................................. 6
3.0
Property Description and Location ..................................................................................... 7
4.0
Accessibility, Climate, Local Resources, Infrastructure and Physiography..................... 12
5.0
History............................................................................................................................... 14
6.0
Geological Setting and Mineralization ............................................................................. 16
8.0
Exploration........................................................................................................................ 21
8.1
Urique South ..........................................................................................................23
8.1.1 Urique District (Urique Camp) ..................................................................24
8.1.2 Other Areas ................................................................................................37
8.2
Urique North ..........................................................................................................38
8.2.1 San Pedro ...................................................................................................38
8.2.2 Cuiteco .......................................................................................................47
9.0
Drilling.............................................................................................................................. 51
10.0 Sample Preparation, Analyses and Security ..................................................................... 52
11.0 Data Verification............................................................................................................... 54
12.0 Mineral Processing and Metallurgical Testing ................................................................. 54
13.0 Mineral Resource Estimates ............................................................................................. 54
14.0 Adjacent Properties........................................................................................................... 54
15.0 Other Relevant Data and Information............................................................................... 56
16.0 Interpretation and Conclusions ......................................................................................... 57
17.0 Recommendations............................................................................................................. 58
18.0 References......................................................................................................................... 61
i
Technical Report on the Urique Project
FIGURES
FIGURE 1 LOCATION OF THE URIQUE PROJECT, CHIHUAHUA STATE, MEXICO......................................6
FIGURE 2 LOCATION OF THE URIQUE PROJECT AND OTHER SIGNIFICANT PROJECTS AND MINES IN
THE SIERRA MADRE GOLD BELT. .............................................................................................................10
FIGURE 3 URIQUE PROJECT CONCESSION MAP. .............................................................................................11
FIGURE 4 RUGGED TOPOGRAPHY OF THE URIQUE CANYON, CHIHUAHUA STATE, MEXICO.............14
FIGURE 5 GENERALIZED REGIONAL GEOLOGIC MAP, URIQUE PROJECT. GEOLOGY MODIFIED
FROM SGM 2004, 2006, 2008..........................................................................................................................17
FIGURE 6 LOCATION OF THE URIQUE NORTH AND SOUTH SECTORS AND EXPLORATION AREAS AT
THE URIQUE PROJECT.7.0 DEPOSIT TYPES..............................................................................................20
FIGURE 7 GEOLOGIC AND TARGET MAP, URIQUE SOUTH SECTOR, CHIHUAHUA STATE, MEXICO. .25
FIGURE 8 PANORAMA OF THE URIQUE CAMP, CHIHUAHUA STATE, MEXICO. .......................................26
FIGURE 9 HISTORIC MINE IN THE URIQUE CAMP ...........................................................................................26
FIGURE 10 GEOLOGIC MAP OF THE ROSARIO AREA SHOWING THREE LARGE CROSSCUTS THAT
ACCESSED THE VEIN SYSTEMS, AND GEOPHYSICS TRAVERSES. ....................................................28
FIGURE 11A. GEOLOGIC PLAN MAP OF PART OF THE ROSARIO WORKINGS, SHOWING GOLD
ASSAYS. ...........................................................................................................................................................29
FIGURE 12 GEOLOGIC CROSS SECTION, ROSARIO AREA, URIQUE PROJECT, CHIHUAHUA STATE,
MEXICO. THE SECTION IS APPROXIMATELY ALONG LINE RL-2 IN FIG 10.....................................31
FIGURE 13 EXAMPLE OF THE NARROW VEINS THAT ARE EXPOSED IN THE ROSARIO WORKINGS..32
FIGURE 14 VERTICAL VEIN PROJECTION OF THE MONO VEIN, ROSARIO MINE, SHOWING
LOCATION OF POSSIBLE “CLAVO” OR ORE SHOOT. THE PLAN MAP IN THE LOWER PORTION
OF THE FIGURE SHOWS PART OF THE ROSARIO WORKINGS OF FIG. 11. ........................................34
FIGURE 15 COMPARISON OF CROSS SECTION FROM FIG. 11 WITH IP PSEUDOSECTION OVER THE
ROSARIO AREA. .............................................................................................................................................36
FIGURE 16 EXPLORATION AREA OF THE, URIQUE NORTH SECTOR, CHIHUAHUA STATE, MEXICO. 41
FIGURE 17 PORTAL OF THE HISTORIC SANGRE DE CRISTO MINE..............................................................42
FIGURE 18 GAMBUSINO WORKINGS IN THE SAN PEDRO AREA OF THE URIQUE PROJECT. ................42
FIGURE 19 QUARTZ VEINING IN DIORITIC INTRUSIVE ROCK, SAN PEDRO AREA, URIQUE PROJECT.43
FIGURE 20 GEOLOGIC MAP, SAN PEDRO AREA, URIQUE PROJECT, CHIHUAHUA STATE, MEXICO. ..44
FIGURE 21 VEIN AND TARGET MAP, SAN PEDRO AREA, URIQUE PROJECT, CHIHUAHUA STATE,
MEXICO............................................................................................................................................................45
FIGURE 22 COMPARISON OF GEOLOGIC CROSS SECTION AND IP PSEUDOSECTION ON LINE SPL-3
AT SAN PEDRO. ..............................................................................................................................................46
FIGURE 23 PANORAMA OF THE CUITECO AREA SHOWING STRONG ALTERATION IN THE CENTER
OF THE PHOTO. ..............................................................................................................................................47
FIGURE 24 VIEW OF STRONGLY ALTERED VOLCANIC ROCKS IN TRAIN CUT, CUITECO AREA.
PHOTO BY ING. CARLOS JURADO. ............................................................................................................48
FIGURE 25 GEOLOGIC MAP, CUITECO AREA, URIQUE PROJECT, CHIHUAHUA STATE, MEXICO. .......49
FIGURE 26 STRONG CLAY-SERICITE PLUS PYRITE ALTERATION WITH STRATIGRAPHIC CONTROL,
CUITECO AREA. .............................................................................................................................................50
FIGURE 27 CAVERNOUS AND SACHAROIDAL RESIDUAL SILICA EXHIBITING STRATIGRAPHIC
CONTROL, CUITECO AREA. PHOTO BY C. JURADO.............................................................................50
ii
TABLES
TABLE 1 CONCESSION DATA FOR THE URIQUE PROJECT ..............................................................................9
TABLE 2 SELECTED ASSAY DATA FROM MINES IN THE URIQUE CAMP...................................................27
TABLE 3 SELECTED ASSAY RESULTS FROM VEINS IN THE ROSARIO AREA, URIQUE DISTRICT .......35
TABLE 4 ASSAY RESULTS, LA PATRICIA MINE AREA....................................................................................37
TABLE 5 ASSAY RESULTS, DON ANCHONDO MINE AREA............................................................................37
TABLE 6 ASSAYS FOR SELECTED SAMPLES, SAN PEDRO.............................................................................39
TABLE 7 2008 URIQUE PROJECT DRILL DATA..................................................................................................52
TABLE 8 PROPOSED EXPLORATION BUDGET, URIQUE PROJECT. ..............................................................60
iii
DESCRIPTION OF TERMS
TERM
1,990,382 N
412,132 E
Ag, As, Au, Bi, Cu, Fe, Hg, K,
Pb, Sb, Te,, and Zn
Alteration
Anomalous (anomaly)
Breccia
CAD and USD
Calc-silicate alteration
Chargeability
Clavo
CRM
DDH
Epithermal
FeOx
Gambusino
Gm/Tonne or g/t
GPS
IP
I.N.E.G.I.
Ing.
JV
Km, Kms
Ltd, Inc
M, Ma, MT
m.a.s.l.
G12B39, G13A41
CaO, MgO, SiO2; K2O
Mineralization (mineralizing)
oz, ppm, ppb, ºC, mm, cm, m,
Km, Km2,
N, S, E, W, NW, etc
No.
HQ, NQ Core
NAD27
NSR
“on trend” or “on Strike”
Pole-Dipole
Pseudosection
DESCRIPTION
UTM grid measurement in metres north of the equator
UTM grid measurement in metres east of the central Meridian
Chemical symbols from the periodic group of elements. silver (Ag), arsenic (As), gold (Au), bismuth (Bi), copper
(Cu), iron (Fe), mercury (Hg), potassium (K), molybdenum (Mo), lead (Pb), antimony (Sb), and zinc (Zn).
Physical and chemical changes to the original composition of rocks due to the introduction of hydrothermal
fluids, of ore-forming solutions, to changes in the confining temperature and pressures or to any combination of
these. The original rock composition is considered "altered" by these changes, and the product of change is
considered an "alteration". (From Hacettepe University online dictionary, after AGI)
a. A departure from the expected or normal. b. The difference between an observed value and the corresponding
computed value (background value). c. A geological feature, esp. in the subsurface, distinguished by geological,
geophysical, or geochemical means, which is different from the general surroundings and is often of potential
economic value; e.g., a magnetic anomaly. (From Hacettepe University online dictionary, after AGI)
Means fragmental rocks whose components are angular and, therefore, as distinguished from conglomerates as
not water worn or rounded. May be sedimentary or formed by crushing or grinding along faults or by
hydrothermal explosions.
Canadian dollars, United States of America dollars.
An alteration consisting mainly of calc-silicate minerals
A measurement in the Induced Polarization (IP) geophysical method, a measurement of the amount of the decay
in electrical current measured after turning off a current that is injected into the ground at electrodes
Ore shoot in the Spanish language mining lexicon
Consejo de Recursos Minerales (also Coremi). The former Mexican Geological Survey now renamed the "SGM"
Diamond drill hole
Said of a hydrothermal mineral deposit formed at relatively shallow depths within the Earth's surface and at a
relatively low temperature range (50 to 200 degrees C), occurring mainly as veins. Also, said of that depositional
environment.
Iron oxide
Mexican term for miners who exploit at a small rustic scale, commonly illegally
Grams per Tonne. Where a gramme (also gram) is a unit of measure equal to 1/1000th of a kilogram. A Tonne is a
metric Tonne having a unit weight of 1,000 kilograms.
An electronic device that records the data transmitted by the geographic positioning satellite system.
Induced polarization, a geophysical method whereby electrical currents are injected into the ground, and the
decay in the resultant charge is measured at electrodes after the current has been turned off.
Instituto Nacional de Estadística y Geografía
Ingeniero, a formal salutation for Engineer, as in Doctor (Dr.) or Mister (Mr.). In common use in Mexico.
Joint venture
Kilometre, Kilometres
Limited, Incorporated
Million, Million years, Million Tonnes
Metres above sea level
Index numbers for 1:50,000 scale maps in Mexico that cover the project area
Calcium, Magnesium, silica and potassium oxides respectively. Major rock forming chemical compounds.
The presence of minerals of possible economic value – and also the process by which concentration of economic
minerals occurs.
Units of measure: ounce, parts per million, parts per billion, degrees Celsius, millimetre, centimetre, metre,
kilometre and square kilometres.
North, south, east, west, northwest, northeast etc.
Number
Specifies the diameter of a cylinder of drill core, HQ has a 63.5 mm diameter. NQ has a 47.6 mm diameter.
Ellipsoid model of the Earth’s surface, in common use in Mexico
Net Smelter Return
A definable geographic direction or orientation of strata, objects or occurrences.
A method or array for measuring induced polarization (IP)
The way IP data is reported along traverses, showing the station separation (N) and the depth of recording in
multiples of N, generally with Chargeability, resistivity and metal factor, generally areas with low resistivity and
high chargeability.
iv
QA/QC
S.A de C.V
Sedar
SEMARNAT
Showing
Quality assurance and quality control
Sociedad Anónima de Capital Variable, a type of Corporation in Spanish
Legally required Canadian System for Electronic Document Analysis and Retrieval (SEDAR)
The Federal Mexican equivalent of the Environmental Protection Agency
Servicio Geologíco Mexicano -The Mexican Geological Survey, a branch of the Federal Government, formerly
the Consejo de Recursos Minerales
A location where alteration and/or mineralization occurs at surface.
Significant gold intercept
Drill core intervals that assayed anomalous gold over one or more consecutive sample intervals.
Silication
Silicification
Rock alteration with addition of silica by formation of silicate minerals (vs silicification)
Rock alteration with addition of silica minerals
A metamorphic rock rich in calcium bearing silicate minerals (calc-silicates), commonly formed at or near
intrusive rock contacts by the introduction of silica rich hydrothermal fluids into a carbonate rich country host
rock such as limestone and dolomite. Also, part of an alteration process for the introduction and formation of ore
forming mineralization and a common host for mineralization/ore.
Mine working used to extract ore.
A focus or loci for exploration
Toronto Stock Exchange, a division of the TSX
Means the northern portion of the Urique Property, which generally lies on the plateau above the Urique canyon
Means the southern portion of the Urique Property, which generally lies within the Urique canyon.
Means the contiguous group of claims indicated in Table 1 and Figure 3 of this report.
Universal Transverse Mercator coordinate system, used for locating points on the earths surface projected onto a
flat surface, and separated into zones to limit distortion, in the case of the Urique Project zones 12 and 13
Ellipsoid model of the Earth’s surface
SGM
Skarn
Stope
Target
TSX
Urique North (Urique Norte)
Urique South (Urique Sur)
Urique Project or Property
UTM
WGS84
v
CONVERSIONS
The following table sets forth certain standard conversions from the Standard Imperial units to
the International System of Units (or metric units).
To Convert From
To
Feet
Metres
Miles
Kilometres
Acres
Hectares
Tonnes (T)
Short tons (t)
Grams per tonne
Parts per million (ppm)
Grams
Grams per ton
Ounce (troy)
Ounces (troy) per Tonne
Metres
Feet
Kilometres
Miles
Hectares
Acres
Short tons
Tonnes
Parts per million (ppm)
Grams per ton
Ounces (troy)
Ounces (troy) per ton
Grams
Grams per Tonne
Multiply By
vi
0.3048
3.281
1.609
0.621
0.405
2.471
1.102
0.907
1.0
1.0
0.032
0.029
31.103
34.438
STATEMENT OF QUALIFICATIONS AND CONSENT
CERTIFICATE OF AUTHOR
STATEMENT OF QUALIFICATIONS:
P. Craig Gibson, PhD, Certified Professional Geologist
Hacienda del Nopal 6506
Col. Haciendas del Valle
Chihuahua, Chihuahua, CP 12317
México
E-Mail: [email protected]
I, P. Craig Gibson, hereby certify:
1. That I am a Certified Professional Geologist #11096 with the American Institute of
Professional Geologists of Westminster, Colorado since 2007.
2. That I graduated with a BS degree in Geosciences in 1984 from the University of Arizona,
and MS. and PhD degrees in Geology in 1986 and 1992 respectively, from the Mackay
School of Mines, University of Nevada, Reno.
3. That I have accrued 25 years of experience in exploration, evaluation, discovery and
research of mineral deposits in North and South America. Relevant experience includes
investigation, evaluation, and exploration of multiple types of mineral systems
throughout Mexico since 1993.
4. That I have personally conducted an examination of the Urique Property, with a two
hour visit on August 31, 2011 being the latest.
5. That I am the author of the Technical Report titled “GEOLOGICAL REPORT AND
EXPLORATION SUMMARYOF THE URIQUE PROJECT, MUNICIPALITY
OF URIQUE, CHIHUAHUA STATE, MÉXICO” dated December 14, 2011, and am
solely responsible for its content.
6. That I have read the definition of "qualified person" set out in National Instrument 43-l0l
("NI 43-101") and certify that by reason of my education, affiliation with a professional
association (as defined by NI 43-101) and past relevant work experience, I fulfil the
requirements to be a “qualified person" for the purposes of NI 43-101.
7. That I am acting as a Qualified Person, and as an independent Technical Advisor to
Mammoth Capital Corp., and that I do not have any present interest or involvement in
the Urique Project or Property or shares or interest in Mammoth Capital Corp., nor do I
expect to receive any such interest or shares.
8. I had prior involvement originally as co-founder and an owner of EXMIN S.A. de C.V.,
and subsequently as Vice President, Exploration and a shareholder of EXMIN Resources
Inc. I was responsible for supervising exploration work at the property for EXMIN and
its Joint Venture Partner, Yale Resources Inc., until April, 2009, when EXMIN
Resources sold the property to Yale Resources Inc.
vii
9. As of the dates of this certificate, to the best of my knowledge, information and belief,
the Technical Report contains all such scientific and technical information that is
required to be disclosed to make this Technical Report complete and accurate, and not
misleading. I am not aware of any material fact or material change with respect to the
subject matter of the Technical Report which is not reflected in the Technical Report.
viii
CONSENT
I, P. Craig Gibson, consent to the public filing of the technical report titled GEOLOGICAL
REPORT AND EXPLORATION SUMMARY OF THE URIQUE PROJECT,
MUNICIPALITY OF URIQUE, CHIHUAHUA STATE, MÉXICO dated December 14,
2011 (the “Technical Report”) by Mammoth Capital Corp.
I also consent to any extracts from or a summary of the Technical Report in the Filing Statement
in respect of the Qualifying Transaction being filed by Mammoth Capital Corp.
I certify that I have read the Filing Statement in respect of the Qualifying Transaction that the
report supports being filed by Mammoth Capital Corp. and that it fairly and accurately represents
the information in the technical report for which I am responsible.
Dated this 14th day of December, 2011.
Signed and sealed,
P. Craig Gibson
ix
GEOLOGICAL REPORT AND EXPLORATION SUMMARY
OF THEURIQUE PROJECT
0.0.
Summary
The Urique Project, wholly owned by Yale Resources Ltd. (Yale), is 289.8 square
kilometres in size located in the Urique Municipality of southwestern Chihuahua State, Mexico.
Mammoth Capital Corp. (Mammoth) commissioned this report after entering into an agreement
to option the property from Yale. Mammoth can earn a 70% interest by paying Yale $50,000
($25,000 received), issue to Yale 1,700,000 shares in Mammoth, and incur a total of $3,000,000
in exploration expenditures on the Property over a four year period. Mammoth can earn the
remaining 30% interest in the Property by issuing an additional 500,000 common shares to Yale
and must have completed a resource estimate on the Property delineating at least 300,000
equivalent ounces of gold in the measured and indicated categories within an additional three
years. In this case, Mammoth must issue an additional share for each equivalent ounce of gold
within the measured and indicated categories, subject to a minimum of 300,000 shares and a
maximum of 2,000,000 shares. If Mammoth does not elect to acquire the remaining 30% of the
Project, Mammoth and Yale would form a joint venture and contribute to future work programs
in the proportion of their respective interests
The Urique Project is an early stage exploration project. Past exploration from 2005 to
2010, consisting mostly of mapping and sampling at the surface and in underground workings,
but also including geophysical surveys and limited drilling, has resulted in the identification of
several targets that are prospective for precious metal mineralization. The Project has been
separated into two areas, the Urique North (Urique Norte) and Urique South (Urique Sur),
mainly due to access issues and that different field crews advanced exploration in each area at
the same time out of separate field offices. This division also aids map work as the two areas are
in different UTM zones
In the Urique North area, exploration work has been done in three areas, the Cerro
Colorado, San Pedro, and Cuiteco target areas; the Cerro Colorado area was subsequently
dropped. In the Urique South area, exploration work focused on the Urique camp near the
pueblo of Urique, where several targets were mapped and sampled in a reconnaissance fashion.
The Rosario mine area was identified as a primary exploration target and further mapping and
1
sampling was completed. The exploration included IP and magnetic surveys conducted at the
Cerro Colorado, San Pedro and Rosario targets, and a preliminary diamond drill program
completed at Cerro Colorado and San Pedro.
The San Pedro target is located near the town of Cerocahui and surrounds the historic
past producing Sangre de Cristo mine. A key concession at Sangre de Cristo was not controlled
by Yale at the time of the exploration programs, but this concession, San Pedro, was
subsequently declared free and was staked by Yale in late 2010. With respect to the application
for the San Pedro concession: all necessary steps have been taken by Minera Alta Vista, S.A. to
obtain such concession and the only remaining step is the signature of the Director of the
Department of Mines and assignment of the title number; the Mexican Federal Government has
approved and granted such concession and issued a temporary number which signifies the
validity of such concession; upon granting of such concession, Minera Alta Vista, S.A. will be
the recorded holder and such concession will expire 50 years from its date of issuance; and due
to the fact that such concession has already been granted, there are no limitations whatsoever
retarding the current or future work on such concession. Mapping and sampling have defined
several vein systems that provide possible high grade gold-silver targets and potential bulk
tonnage targets at or near their intersections. IP and magnetic surveys identified anomalies along
the projected structures. Two drill holes tested outlying portions of the target, but were not
sufficient to adequately explore the area.
Mapping and sampling in the Urique camp was also advanced, particularly at the Rosario
mine. At El Rosario, a series of five main sets of veins was exploited in the past from several
hundred metres of crosscuts and stoping. The vein system measures about 800 metres along
strike and is about 400 metres in width as presently defined. The veins are relatively narrow,
varying from less than 10 cm to about 40 cm in width, but yield very high silver and some gold
assays, and sampling of wider zones or vein-sets indicates the potential for high grades over
normal mining widths. The veins are hosted by altered andesite and sedimentary rocks that have
been intruded by a granitic pluton, forming a hornfels. Sample assays in these areas combined
with the multiple high grade vein structures indicate the potential for encountering a bulk
tonnage deposit in this material.
2
The Urique Project lies in a well mineralized region of the northern Sierra Madre
Precious Metal belt. Exploration completed on the Property to date has identified several
exploration targets that warrant further work. In the opinion of the author, the exploration work
has been carried out within industry standards and is reliable. The author has recommended an
exploration program consisting of additional mapping and sampling, as well as drilling of the
San Pedro and Rosario targets. The proposed budget for this work is $ 440,000.
3
1.0
Introduction
Preparation of this Technical Report was undertaken on behalf of Mammoth Capital
Corp. (“Mammoth” or the “Company”) to document work programs and data generated by Yale
Resources Ltd. (“Yale”) on the Urique Property (“Urique Project”, “Property” or “Project”) since
acquisition of the Property in 2006. The Urique Project, in Chihuahua State, Mexico, is wholly
owned by Yale's Mexican subsidiary, Minera Alta Vista S.A. de C.V., and covers approximately
290 square kilometres in the Urique Municipality (Fig. 1). Mammoth has agreed to option the
Urique property from Yale under the following terms:
1.)
Mammoth can earn a 70% interest by paying Yale $50,000 ($25,000
received), issue to Yale 1,700,000 shares in Mammoth, and incur a total of
$3,000,000 in exploration expenditures on the Property over a four year
period.
Mammoth must issue 100,000 common shares upon receipt of Exchange
approval to the proposed qualifying transaction and must issue a further
100,000 shares within 6 months of such approval. Subsequent share issuances
of 300,000 at the 12 month anniversary and 400,000 on each subsequent
anniversary will also be due in order to keep the Option Agreement in good
standing.
The first year's requirement will be $300,000 in exploration
expenditures followed by a further $500,000 in the following year, $800,000
in the third year and $1,400,000 in the final year of the Option Agreement.
2.)
Mammoth can earn the remaining 30% interest in the Property by issuing an
additional 500,000 common shares to Yale and must have completed a
resource estimate on the Property delineating at least 300,000 equivalent
ounces of gold in the measured and indicated categories within an additional
three years.
Upon completion of the resource estimation Mammoth would then be required
to issue an additional share for each equivalent ounce of gold within the
measured and indicated categories, subject to a minimum of 300,000 shares
and a maximum of 2,000,000 shares.
4
3.)
If Mammoth does not elect to acquire the remaining 30% of the Project after
completing the 4 year earn in of 70%, Mammoth and Yale will form a joint
venture and contribute to future work programs in the proportion of their
respective interests. .
The author of this Technical Report performed the initial site visits and reconnaissance
sampling and recommended the acquisition of the land package for EXMIN S.A. de C.V., a
private Mexican company co-founded by the author, in 2005 and 2006.
The author also
supervised work programs from 2006 to 2008 undertaken on the behalf of Yale by EXMIN
Resources Inc. and its then wholly owned Mexican subsidiary, EXMIN, S.A. de C.V. (together,
“EXMIN”), under a joint venture agreement (“Urique Joint Venture”). The author, a Certified
Professional Geologist of the American Institute of Professional Geologists, and Qualified
Person under NI 43-101 requirements, was in charge of the exploration programs at the Project
as Vice President, Exploration of EXMIN under the JV agreement. EXMIN was subsequently
acquired by Dia Bras Exploration (“Dia Bras”) and was delisted, and EXMIN S.A. de C.V. is
now a wholly owned subsidiary of Dia Bras.
The author was intimately involved in the exploration programs described in this report
through 2008 and visited the Project and region numerous times between 2006 and 2010. The
latest visit to the Project was on August 31, 2011 in the company of Mammoth Capital
principals, and consisted of a short visit to small prospect pits in the San Pedro area during a
helicopter over flight review of the Property and nearby mines and districts.
This Technical Report is an accurate representation of the status and geologic potential of
the Urique Project based on the information available to the author, including the author’s
personal familiarity with the Property gleaned during numerous field visits conducted from 2006
to 2011, and on a review and compilation of published and unpublished geological, and
geochemical data obtained from corporate, private, and government sources as listed in the
References section at the end of this Technical Report. Exploration data was collected by
experienced geologists and technicians, consistent with acceptable industry standards and
provides a credible, reliable database.
5
Figure 1 Location of the Urique Project, Chihuahua State, Mexico.
2.0
Reliance on Other Experts
Exploration data was collected by experienced geologists and technicians under the
supervision of the author, consistent with acceptable industry standards and provides a credible,
reliable database. The report benefited from discussions with Ian Foreman, President of Yale
Resources, and a qualified person under NI 43-101 guidelines.
It was not within the scope of this Technical Report to independently verify the legal
status or ownership of the Urique Property.
The author was intimately involved in the
acquisition of the concessions that comprise the Property by EXMIN Resources Inc., including
title and survey information of all of the concessions and other ownership information available
in the Public Mining Registry of the General Direction of Mines, as well as the investigations
into the surface ownership in the areas that comprise the Property from the National Agrarian
6
Reform. The author was also a participant in negotiations with Yale for the sale of the Property
and transfer of the concession titles to Yale in 2009.
Yale has provided the author with a list of the concessions that currently comprise the
Property and has stated that they are held under its wholly owned Mexican subsidiary Minera
Alta Vista, including a new San Pedro concession that was staked by Yale in November 2010.
With respect to the application for the San Pedro concession: all necessary steps have been taken
by Minera Alta Vista, S.A. to obtain such concession and the only remaining step is the signature
of the Director of the Department of Mines and assignment of the title number; the Mexican
Federal Government has approved and granted such concession and issued a temporary number
which signifies the validity of such concession; upon granting of such concession, Minera Alta
Vista, S.A. will be the recorded holder and such concession will expire 50 years from its date of
issuance; and due to the fact that such concession has already been granted, there are no
limitations whatsoever retarding the current or future work on such concession. The author has
not independently verified the status of the concessions, but has no reason to believe that
ownership and status are other than has been represented; however, the author disclaims
responsibility for verification of the current surface and mineral ownership of the Urique
Property.
3.0
Property Description and Location
The Urique Project is located in the prolific Sierra Madre Precious Metal Belt in
southwestern Chihuahua State, Mexico (Fig. 2). The Project, wholly owned by Yale Resources
Ltd. through its wholly owned Mexican subsidiary, Minera Alta Vista, S.A. de C.V., comprises
10 mineral concessions and an application for the mineral concession known as the San Pedro
concession, covering a total of 28,980.53 hectares that stretch over a 40 km distance elongated
from north to south (Fig. 3).
The north end of the elongated concession block is at
approximately 27º25’ north latitude and the southern end is at approximately 27º05’ north
latitude, with the center of the elongated concession block located at approximately 108º
longitude and 27º15’ latitude (see Fig. 5). Table 1 below lists the mining concessions that make
up the Project.
7
As described in the previous sections, the Property, other than the application for the
mining concession known as the San Pedro concession, was acquired by Yale through an
agreement with EXMIN. As part of this agreement, a 2% Net Smelter Return royalty was
granted to EXMIN for the concessions that currently make up the Property, other than the San
Pedro concession staked by Yale in late 2010. One half of this royalty, or 1%, may be purchased
for one million Canadian dollars. This royalty is now held by Dia Bras Exploration.
With respect to the application for the San Pedro concession: all necessary steps have
been taken by Minera Alta Vista, S.A. to obtain such concession and the only remaining step is
the signature of the Director of the Department of Mines and assignment of the title number; the
Mexican Federal Government has approved and granted such concession and issued a temporary
number which signifies the validity of such concession; upon granting of such concession,
Minera Alta Vista, S.A. will be the recorded holder and such concession will expire 50 years
from its date of issuance; and due to the fact that such concession has already been granted, there
are no limitations whatsoever retarding the current or future work on such concession. As part of
the option agreement between Mammoth and Yale described previously, Mammoth has granted
to Yale a 2% Net Smelter Return royalty on the San Pedro concession; one half of this royalty, or
1%, may be purchased for 500,000 Canadian dollars. To the author’s knowledge, there area no
other royalties, back in rights, or payments due on the Property.
A new Mining Law was passed by the Mexican Legislature in 1993 and opened the
industry to increased exploration by foreign interest. Mineral concessions in Mexico can only be
held by Mexican Nationals or Mexican incorporated companies, but there are virtually no
restrictions on foreign ownership of such companies. To acquire a concession, a principal
monument must be erected and located and an application submitted to the Federal Mining
Directorate. The concession must subsequently be located by an official surveyor and the
concessions are registered with the Public Registry of Mining when titled.
8
Table 1 Concession data for the Urique Project
Concession
Area
Hectares
Urique Project
Diana de Oro
Diana de Oro Fraccion 1
Diana II
22,493.8526
30.0000
103.0504
11.8031
4,881.3547
899.0182
San Pedro
149.8076
San Pedro I
San Pedro II
San Pedro III
Carolina
Total Urique Project
90.0000
88.0000
88.0000
145.6392
28,980.5258
Title
Date
Title No.
Expiry
Date
Registered Owner
12-Aug-05
12-Aug-05
12-Aug-05
12-Aug-05
12-Aug-05
20-May-05
225290
225291
225292
225293
225294
224570
11-Aug-55
11-Aug-55
11-Aug-55
11-Aug-55
11-Aug-55
19-May-55
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
-
Temp.
concession #
016/45665
50 years from
grant of perm.
title #
Minera Alta Vista
31-May-05
31-May-05
31-May-05
20-Sep-05
224679
224680
224677
225521
30-May-55
30-May-55
30-May-55
20-Sep-55
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
Minera Alta Vista
In the past, two types of concessions were in effect: Exploration and Exploitation. An
Exploration Concession can be valid for up to six years if work is performed on the ground,
assessment reports are filed in May of each year, and taxes are paid in advance in January and
July of each year.
The tax amount and assessment is based on the area and age of the
concession. An Exploration concession may be converted to an Exploitation concession prior to
expiry. An Exploitation concession is valid for fifty years and can be renewed, and the taxes are
higher. The types of concession were changed with a the Mining Law Reform in 1999, and now
only one type of concession, Mining, is recognized, with a renewable 50 year term from the
original title date as long as taxes are paid and assessments are filed; this 50 year period was
retroactive for concessions in good standing including the concessions that comprise the Property
other than the application for the San Pedro concession, such that the concessions expire in 2055
and the San Pedro concession will expire 50 years from its date of issuance.
In Mexico, tax payments (Derechos Sobre Mineria) must be made bi-annually, in January
and July, to keep a concession in good standing once it has been titled. The tax payments are
based on the size as well as the age of the concessions. The tax payments for the Property are
estimated at $35,000 per semester. Annual assessment work (Montos Minimos de Inversion)
must also be completed, and documentation must be filed by May 31 for the previous calendar
year. The author has not verified that the tax payments are up to date or that the assessment
documents have been filed after 2008 and is relying on disclosure by Yale.
9
Figure 2 Location of the Urique Project and other significant projects and mines in the Sierra Madre Gold
Belt.
10
Figure 3 Urique Project concession map.
11
In Mexico surface rights are owned by private persons or ejidos (local communal
organizations), and agreements for access must be made with the surface owners to do
significant work. The surface rights covering the Urique Project include at least two ejidos as
well as private parcels. Agreements with the owners of the surface rights over the areas that
were explored by drilling in 2008 were obtained, but are not currently active. The author knows
of no reason that similar agreements cannot be made for future programs.
Environmental permits required for early stage exploration that affects small surface
areas, such as for road and drill pad construction for small programs, are simple forms filed with
the government advising that work will commence, but require that agreements be made for
surface access. These forms were filed by the Urique Joint Venture prior to drilling in 2008 but
are not currently in effect. The author has no reason to believe that similar environmental
permits cannot be obtained, and knows of no environmental liabilities at the Property.
To the author’s knowledge there are no other permits or agreements that are needed to
explore the Urique Property, and there are no other significant factors or risks that may affect
access, title or the right to perform work on the Property.
4.0
Accessibility, Climate, Local Resources, Infrastructure and Physiography
The Urique municipality is located in the Southwestern portion of Chihuahua State in the
Sierra Madre Occidental geographic province, and the Barrancas (Canyons) sub-province. The
Project extends for about 40 kilometres north-south from the pueblo of Cuiteco to south of the
town of Urique, locate 240 km southeast of the city of Chihuahua. Access to the Project is by
travel on Federal Highway 16 that connects Chihuahua to Hermosillo, Sonora, via Cuauhtémoc
(95km) and La Junta (50km), and by the Creel highway that branches south 16 km east of La
Junta for a distance of 150 km to San Rafael (Fig. 1). At San Rafael a generally good quality dirt
road that winds about 100 km through the Sierra Madre passes through the north-south
concession package of the Project, including the towns of Cuiteco, Bahuichivo, Cerocahui, Mesa
de Arturo, and Urique. The total travel time from Chihuahua to San Rafael is about 4 hours, to
Bahuichivo about 6 hours, and to Urique about 8 hours. The Chihuahua-Pacific railway line
crosses the northern portion of the property with stations of Cuiteco and Bahuichivo; this railway
line carries freight as well as tourists. The power grid extends through all of the listed towns, but
12
service can be sporadic during the rainy season, generally from mid July to late September.
There are landing airstrips at Cerocahui, Urique, and in Cieneguita to the south of Mesa de
Arturo.
The topography in the region is characterized by a high plateau with elevations ranging
from 1,800 to 2,000 metres above sea level, which is cut by deeply incised canyons or barrancas
(Fig 4), with elevations ranging from 500 to 800 metres above sea level at the canyon floors.
Vegetation in the plateau region varies from grasslands to pine forests, while vegetation in the
canyons is more typical of deserts and tropical regions. The Project is located on the following
topographic sheets issued by INEGI and Mining Geology sheets issued by the SGM: G12-03 and
G13-01 1:250,000 sheets and the G12-B39 (Temoris), G12-B49 (Cieneguita-Lluvia de Oro),
G13-A31 (San Rafael), and G13-A41 (Batopilas) 1:50,000 sheets.
The climate in southeastern Chihuahua is generally arid, but with a notable rainy season
in summer, usually beginning in July and ending in September or October. Temperatures in the
higher elevations are moderate in summertime but commonly reach 0 degrees C in winter.
Temperatures in the canyons are moderate in winter, but can reach extremes of more than 45
degrees C in summertime.
The Project is in the early stage of exploration, and for the work done since 2009 surface
rights for exploration and mining operations have not been needed. Surface access agreements
will be necessary to conduct drilling programs as recommended in this report. Agreements for
surface access for part of the Property were obtained previously for the drilling program
conducted in 2008, but have now expired. The author believes that obtaining surface access
agreements that cover the areas of interest of the Project will not be a problem based on the past
relationship of the parties involved. The availability of office and camp space, power, water and
operational personnel is sufficient and can be obtained in the nearby communities or through
equipment contractors. In general, surface and water rights for any future mining operations can
be obtained by agreements with the local owners, power is available in the region through the
electrical grid that has been upgraded due to new mining operations in the region, and personnel
for future operations can be obtained from the relatively well educated local population.
13
Figure 4 Rugged topography of the Urique Canyon, Chihuahua State, Mexico.
5.0
History
According to the Chihuahua State Mining Monograph prepared by the Servicio
Geologico Mexicano (Mexico Geological Survey), the Urique region saw past production from
numerous small mines (SGM, 2007). The Urique camp, discovered in 1689 (Hernandez P.,
2011), was the largest in the area and has had past production of unknown tonnage from at least
four mines. Production in 1929 was reported to be 44 kg of Au, 1,061 kg of Ag, 7,990 kg of Pb
and 2,686 kg of Cu (SGM, 2007). Small scale production in the area has continued to the
present.
The history of the Project prior to 2005 is unknown and there is no evidence in the
Mexican archives of foreign companies working in the area. The land position that comprises
the Urique Project was originally assembled by EXMIN Resources Inc. in 2005 and 2006, and
was the subject of an option agreement with Yale signed in August, 2006 (Urique Joint Venture
or JV). Under the terms of the original agreement, Yale could earn up to a 75% interest in the
Project by making exploration expenditures of US$ 4,500,000 and issuing 1,500,000 shares to
the company over the five year term of the option.
14
According to annual financial statements, Yale Resources has spent a total of $1,991,421
on the Urique Project from acquisition in 2006 until Oct. 31, 2010. Of that total $831,446 is
stated as ‘Acquisition Costs’, hence more than one million dollars has been credited as
exploration costs. The following is a summary of the work accomplished by Yale during that
time.
Field work was initiated in September 2006 consisting primarily of mapping, prospecting
and sampling. In the southern portion of the Property first pass reconnaissance work included
the sampling of sixty (60) historic workings, mines and prospects. A total of 271 rock samples
were collected
Work performed during 2007 consisted of trenching at Cerro Colorado, and field work in
south of the property resulted in the identification of three new targets: the La Mariscal, El
Hueso, and El Sauz. In late 2007 field crews identified of a significant new mineralized target,
the El Rosario target.
In 2008, work at Urique was dominated by drilling and geophysics. A total of 1,706 m
was drilled in 11 HQ sized drill holes. In addition the company completed 13.35 kilometres of
geophysical survey (IP and ground magnetics) within the Cerro Colorado, San Pedro and El
Rosario targets. In addition initial sampling was done inside the workings within the El Rosario
target. Expenditure on geophysical surveying amounted to approximately $54,000 and the
estimated expenditure for drilling at San Pedro amounted to approximately $45,000.
In February 2009, Yale announced that it had agreed to purchase the Urique Project from
EXMIN Resources. Yale agreed to pay EXMIN US$250,000 and to issue one million shares to
EXMIN for 100% of the rights to the concessions, subject to a 2% net smelter return. With the
completion of the sale of the Urique Project, the option agreement between the two companies
covering the Project became null and void. The purchase of the Urique Project by Yale was
completed on April 8, 2009.
Since acquiring the Property, Yale Resources has undertaken multiple field campaigns at
Urique. Work included geological mapping, prospecting, trenching, rock sampling, and silt
sampling. Yale has submitted a total of 470 samples from the Urique Property. In total Yale’s
geologists spent a combined 320 man days in the field and the company has incurred
expenditures relating to exploration activities on the Project from September 2008 of
15
approximately $77,000. The field work completed on the property to date is summarized in
section 8.0, Exploration.
6.0
Geological Setting and Mineralization
The geologic setting for the Urique Property is a Tertiary to Cretaceous age volcano-
sedimentary assemblage within the Sierra Madre Occidental Geological Province of
northwestern Mexico. The rocks exposed in the region are dominantly Tertiary intermediate to
felsic volcanic and volcaniclastic rocks (Fig. 2). An upper, relatively flat-lying sequence of
rhyolitic rocks, consisting mostly of ash flow and air fall tuffs, overlies a dominantly andesitic
sequence of flows and pyroclastic rocks, and lesser felsic pyroclastic rocks. These two general
units are commonly referred to as the Upper and Lower Volcanic complexes or sequences in
northern Mexico, although the ages of the rocks have not been correlated throughout the region.
Most of the mineralization in the area is below the extensive felsic volcanic rocks up the Upper
Volcanic sequence that tend to cover the mineralization. Rocks of the Upper Volcanic sequence
are locally overlain by a sequence of volcano-sedimentary rocks ranging from agglomerate to
andesite breccia, of probable Tertiary age as well as Tertiary or Quaternary basalt.
The Tertiary rocks locally unconformably overlie basement rocks of Cretaceous or
possibly Jurassic age.
The basement rocks are part of a volcano-sedimentary sequence
composed dominantly of andesitic volcanic rocks with local limestone and clastic sedimentary
rocks.
This unit has been correlated by the Servicio Geologico Mexicano with the well
mineralized Guerrero terrain of central Mexico (SGM, 2008).
The basement rocks and the lower part of the Tertiary sequence have been intruded in
places by late Cretaceous to early Tertiary granitic plutons. These intrusions are intimately
related to mineralization in several districts in the region, including the contact related skarn
deposits at Piedras Verdes and Bahuerachi (Fig. 5), as well as the replacement gold-silver deposit
at Lluvia de Oro. Similar intrusions occur in the Urique canyon where they may be associated
with mineralization.
16
Figure 5 Generalized regional geologic map, Urique Project. Geology modified from SGM 2004, 2006, 2008.
17
The structural geology of the region is dominated by large scale normal faulting, largely
in a north-northeast and north-northwest trend (Fig. 5). The older, more mineralized rocks of the
lower Tertiary and the basement rocks are exposed where they have been uplifted by faulting and
where erosion has exposed them in the deep canyons characteristic of this part of the Sierra
Madre Occidental. Felsic dikes are observed within the northerly trending structural zones in
several districts in the region, and are commonly spatially associated with mineralization.
Mineralization in the region typically occurs within intermediate rocks of the Lower
Volcanic complex, but locally extends into the rhyolitic rocks of the Upper Volcanic complex.
Alteration associated with mineralization is comprised mainly of silica with locally strong pyrite
and clay-sericite alteration. Silication and skarn mineralization are also locally observed at
intrusive contacts.
The geology of the Urique Property has generally not been mapped in detail. The
Property is dominantly underlain by rocks of the Upper Volcanic complex, consisting mainly of
felsic volcaniclastic rocks. Poorly welded tuffs form low lying hills in the plateau regions in the
northern and southern portions of the Property, and thick exposures of variably welded
ignimbrites are exposed in the walls of canyons near the towns of Urique and Cuiteco (Fig. 5).
These rocks overlie rocks of the Lower Volcanic sequence composed of andesitic flows and flow
breccia, as well as volcano-sedimentary rocks of intermediate composition in the Cuiteco and
San Pedro areas, as well as in the Urique canyon (Fig. 5). These rocks are probably dominantly
Tertiary in age, but may also be locally Cretaceous.
Granodioritic rocks intrude the Lower Volcanic sequence in the Urique canyon south of
the town of Urique (Fig. 5). These rocks have not been observed to intrude rocks of the Upper
Volcanic sequence within the Property. Small rhyolitic intrusions are described in the Cuiteco
area, but have not been mapped in detail.
Several mineralized areas are present within the boundaries of the Project, which has
been divided into two sections, Urique North and Urique South, based on geographic location
and access (Fig. 3). The Urique North area consists of the portions of the concession block that
lie outside of the Urique canyon, and the Urique South area lies within the Urique canyon.
Mineralization in the Urique North sector includes the Cuiteco, Cerro Colorado and Sangre de
Cristo-San Pedro areas, while mineralization in Urique South includes the Urique district or
18
camp, and several areas with known mineralization to the south, including El Frijolar, Los Alisos
and El Platano.
Mineralization in the Urique North area of the Project has been described at the Cuiteco
and San Pedro target areas. At Cuiteco, a large area of clay-silica-pyrite alteration with local
silica alteration that occurs in bedded rocks of the upper part of the lower volcanic sequence.
The altered area measures several hundred meters across and locally contains alteration
controlled in stratigraphic units of the volcanic sequence. Areas of vuggy residual silica and
sacharoidal silica have been observed but have not been mapped in detail. These areas may be
related to small rhyolitic intrusions (Jurado, 2010).
At San Pedro, precious metal bearing quartz veins are present within rocks that may be
part of the upper portion of the Lower Volcanic sequence. Here veins have been worked by
Gambusinos or informal miners, and important historic production occurred at the Sangre de
Cristo mine that is on a concession owned by a third party and is mostly internal to the Property
boundaries.
Mineralization within the Urique South area is exposed in the Urique canyon, mainly
below the contact between the Upper and Lower Volcanic sequences. At the Urique district or
camp, mineralization consists of narrow veins hosted by basal Tertiary volcanic rocks and
underlying Cretaceous volcanoclastic basement rocks exposed in the bottom of the canyon.
These rocks have been intruded by a granodiorite batholith that may be related to mineralization.
Upper Tertiary felsic volcanic rocks overly the older rocks and form the walls of the canyon.
Several other mineralized areas are present in the Urique Canyon south of the Urique
camp but have not been studied in detail. At Los Alisos, a large area of alteration is associated
with a granodioritic intrusion in andesitic rocks, and copper and gold have been mined from
small workings (Aparicio and Farias, 1975). Much of this alteration zone lies on concession
owned by third parties that are surrounded by the Property, but gold bearing veins have been
sampled on the Property (Gibson, 2008).
The exploration program at the Urique Project has been based on the occurrences of
mineralization within the Property and on the presence of historic mining activity. Exploration
work carried out to date by Yale has given results that indicate that further work is required.
19
Figure 6 Location of the Urique North and South sectors and exploration areas at the Urique Project.7.0
Deposit Types
20
Structurally controlled vein and breccia mineralization occurs throughout the Urique
Project and is similar to other low sulphidation epithermal veins in the Sierra Madre mineralized
belt such as Palmarejo (Coeur), Ocampo, (Gammon Gold), and Dolores, (Minefinders) (Fig. 2).
Low sulphidation (also termed adularia-sericite) epithermal veins are characterized by deposition
at relatively shallow depth and low temperatures, and are generally composed of quartz veins
with or without carbonate minerals and containing important precious metals with relatively
minor base metals, and are characterized as having large areas of clay-illite alteration at shallow
levels and quartz-adularia alteration at deeper levels.
Some veins contain more important
concentrations of base metals, principally lead and zinc, and have been termed Cordilleran or
intermediate sulphidation veins. Both types of veins have been observed at the Project.
In addition, the geological setting and local alteration at Cuiteco (Urique North) and Los
Alisos (Urique South) demonstrate a potential for high sulphidation epithermal mineralization
such as that found at El Sauzal, Goldcorp's operating gold mine located approximately 10
kilometres to the south of southern Urique Project boundary. These deposits are generally
closely associated with intrusive activity and contain areas of alunite-clay alteration with areas of
residual vuggy silica formed by acid leaching. High sulphidation deposits are characterized as
relatively gold-rich with little silver, and may contain important copper.
Porphyry and contact related skarn and replacement mineralization is present in several
districts in the region, including Piedras Verdes-Bolivar (Dia Bras), Bahuerachi (Jinchuan
Group), Corralitos-Batopilas (Dia Bras), and Lluvia de Oro (Aparicio and Farias, 1975; SGM,
2007). Intrusions are known in several parts of the project areas and the possibility of similar
occurrences in the Urique canyon cannot be discounted.
8.0
Exploration
The primary exploration targets on the property package are large scale precious metal
mineralized systems. Seven general mineralized areas were identified by the author during a
preliminary exploration program in 2005 and 2006, consisting of reconnaissance field visits and
a review and compilation of available geologic data, mainly from the Consejo de Recursos
Minerales (now known as the Servicio Geológico Mexicano -equivalent to Mexican Geological
Survey) (Aparicio and Farias, 1975, SGM, 2007) (Fig 3).
21
Exploration work was carried out to evaluate several of these areas in 2006 to early 2009
by the Urique Joint Venture and by Yale Resources in 2009 and 2010, with analysis and
interpretation of the data ongoing in 2011. Since June of 2009 Yale Resources has undertaken
multiple field campaigns at the Urique Project. Work included geological mapping (surface and
underground), prospecting, trenching, rock sampling (surface and underground), and silt
sampling. Yale has submitted a total of 470 samples from the Urique Property. In total Yale’s
geologists have spent a combined 320 man days in the field and the company has incurred
expenditures relating to exploration activities on the Project from September 2008 approximating
$77,000.
The Project was divided into two sections, Urique North and Urique South, based on
geographic location and access. Sampling programs included first pass sampling, including grab
samples and chip samples to determine whether precious metal values were present, and
subsequent detailed sampling of surface and underground exposures, and of trenches to expose
the mineralization in areas with little natural exposure. Much of this latter sampling consisted of
channel sampling, where continuous narrow (approximately 10 cm wide) samples are taken
across mineralized structures or veins, separating vein material from visibly mineralized or
altered wallrock and unmineralized rock.
A geophysical survey was carried out in 2008 covering two areas of the current Project
by Geofisica TMC S.A. de C.V. of Mazatlan, Mexico. The geophysics consisted of time-domain
pole-dipole IP and ground magnetometer surveys. The main purpose of these surveys was to use
geophysical methods to help map the geological units and structural features underlying the area
studied and to give an idea as to the distribution of disseminated and stringer metallic sulfides in
the bedrock, which could be potentially of economic interest if found to carry significant
concentrations of precious metals (Lambert, 2008).
The time-domain I.P. survey was carried out using a pole-dipole electrode configuration
along survey lines spaced at about 400 to 500 meters that cross approximately perpendicular to
the structural fabric. The dipole dimension (“n”) was 50 meters and successive separations at
multiples of n=1 to n=6 times the dipole dimensions were used in order to investigate at depth.
The transmitter electrodes were placed at points located as far away as practically feasible from
the extremities of the survey lines. The results of the I.P. surveys are presented in the form of
22
pseudo-sections of the apparent resistivities and the measured chargeabilities along each
recording line using the data from I.P. decay curve and the apparent resistivity of the earth at
each station and “n” separation. The average apparent chargeability is a direct measure of the
polarization of the underlying earth.
The Earth’s magnetic field was also measured at each station spaced at 50m along the
survey line. The magnetic survey data is useful for identifying structures that juxtapose rocks of
different magnetic properties and possible intrusive lithologies that affect the Earth’s magnetic
field. In general the magnetic surveys did not yield useful information due to the wide line
spacing that made correlation of data between sample lines difficult.
The Urique North area consists of the portions of the concession block that lie outside of
the Urique canyon, and the Urique South area lies within the Urique canyon. The Project
division also aids field work and map preparation because the Urique North zone is largely in
UTM zone 12, and the Urique South zone is largely in UTM zone 13. The coordinates for maps
of the entire Project are generally in UTM zone 12.
Mineralization in the Urique North sector includes the Cuiteco and Sangre de Cristo-San
Pedro areas, while mineralization in Urique South includes the Urique district or camp, and
several areas with known mineralization to the south, including Los Alisos and el Platano. These
will be described in detail below for the Urique South and Urique North sectors.
8.1
Urique South
Yale began regional work in the area in 2007 with a focus on the evaluation of several
large areas with abundant small mines, prospects, and showings. Approximately sixty mines and
prospects have been identified in the southern portion of the Urique Property, and encompass the
Urique district or camp at the Urique pueblo (Fig. 5). Considering the large number of targets,
not all of them have been properly followed up after an initial visit.
As an example, at
Guasimitas two 80 cm samples assayed 16.35 and 8.38 g/t gold, and several small mines high
silver values in excess of 500 g/t from dumps and veins (see table of selected assay results,
below). Although there is currently one clear priority target, the El Rosario mine in the Urique
camp, it is strongly recommended that more detailed mapping and sampling being completed on
the next level of priority targets as there may yet be a better one that has yet to be recognized.
23
8.1.1
Urique District (Urique Camp)
The Urique district is located at the bottom of the Urique canyon, which is downstream
from the Barranca del Cobre (Copper Canyon) (Fig. 7, 8). The district was discovered by the
Spanish in 1690 during the colonial period, although it was probably previously known to the
indigenous Tarahumara people (SGM, 2007; Hernandez P., 2011).
Mining in the district
probably continued intermittently for the next two centuries, and ended in the late 1920’s during
the Mexican revolution. Reported production in 1929 was 44 kg of Au, 1,061 kg of Ag, 7,990
kg of Pb and 2,686 kg of Cu. These grades probably resulted from hand selection of broken rock
and are historical in nature, and should not be construed as being a reliable estimation of grades
for future exploration targets.
The Urique district measures approximately 3 km by 2 km in area and to date, Yale has
identified more than 20 historic mines/workings (Figs. 7, 9). The extent of a majority of these
workings is unknown; however it is thought that several are considerable in size.
The El Rosario mine area, located just east of the town of Urique on the opposite side of
the Urique River (Fig. 8), was identified as a prime exploration target based on the presence of
extensive underground workings and numerous high grade veins exposed at the surface, and is
discussed in more detail below. Highlights from this and other historic mines in the Urique
district are included in the Table 2.
El Rosario. The historic Rosario area was an important past producer in the Urique
district. Formal mining of the Rosario area ended in the late 1920’s (SGM, 2007) and consisted
of several hundred metres of underground workings that exploited a system of at least 5 sets of
narrow high grade veins from three, large, partly interconnected workings or crosscuts (Fig. 10).
Yale has mapped and sampled the Rosario adit extensively (Fig. 11), but the El Salto and
Texcalama adits require additional follow-up sampling and mapping. The crosscuts intersect the
north-trending vein system on three different levels of the historic mine (Fig. 12). A fourth,
potentially important working, Feliciano, was located near the northern end of the vein system
(Fig. 10) but has not seen any exploration work. Numerous small mines, prospects and stopes, as
well as surface exposures have also been mapped and sampled (Fig. 7, Table 3).
24
Figure 7 Geologic and target map, Urique South sector, Chihuahua State, Mexico.
25
Rosario
Mine
Urique
Figure 8 Panorama of the Urique camp, Chihuahua State, Mexico.
Figure 9 Historic mine in the Urique camp
26
Table 2 Selected assay data from mines in the Urique camp.
Area/
Width
Sample*
(m)
La Recompensa
835
0.50
836
0.50
841
Dump
Mina El Chapote
848
Dump
La Veranera
857
0.76
La Esmeralda
858
0.15
859
1.00
Mina Cerro Garcero
889
1.00
Mina Las Delicias
910
Dump
Aguaje Seco
914
0.05
915
Dump
Las Minitas
918
Dump
La Patricia
919
0.60
920 HW
0.10
921 FW
0.10
Average
0.80
Mina La Pobre
946
0.15
948
0.30
949
0.50
Las Guasimitas
4523
0.80
4524
0.80
Au
(g/t)
Ag
(g/t)
Cu
%
Pb
%
Zn
%
1.04
0.75
3.52
46.5
52.5
51.6
-
-
-
0.45
>1500
1.0
1.7
1.2
2.10
676
1.2
1.4
-
0.21
0.07
153
48.7
0.1
0.2
2.7
1.9
0.1
0.1
0.67
175
-
1.1
3.0
0.24
667
0.2
1.5
2.1
0.07
0.92
146
1370
0.5
1.2
4.1
3.6
0.02
1830
3.4
0.2
-
0.01
4.42
0.86
0.67
47.7
656
1815
345
-
0.4
0.9
0.8
0.5
-
0.53
0.15
0.21
3220
27.2
37.3
0.5
0.1
>20
0.2
0.4
1.2
0.2
0.2
16.35
8.38
30.5
36.4
-
-
-
HW and FW indicate hangingwall and footwall samples
27
Figure 10 Geologic map of the Rosario area showing three large crosscuts that accessed the vein systems, and geophysics traverses.
28
Figure 11a. Geologic plan map of part of the Rosario workings, showing gold assays.
29
Figure 11b Geologic plan map of part of the Rosario workings, showing silver assays.
30
The El Rosario target is made up of a system of generally north striking vein sets within
an area of about 200 metres in width and 800 metres along strike and is open at depth and along
strike (Fig. 10, 12). The vein sets tend to be 3 to 8 metres wide and are made up of several to
tens of narrower veins (Fig. 13). At least one vein set, El Mono vein system, was mined
extensively above the lowest level in the Rosario tunnel, possibly extending to the surface (Fig.
14). An attempt was made to correlate vein sets cut in underground workings with those
exposed at the surface; five vein systems were identified, termed Vein 1 to Vein 5, with
summary assay results shown in Table 3 below.
Figure 12 Geologic cross section, Rosario area, Urique Project, Chihuahua State, Mexico. The section is
approximately along line RL-2 in Fig 10.
31
Figure 13 Example of the narrow veins that are exposed in the Rosario workings.
A surface and underground sampling program was carried out in early to mid 2008 at the
Rosario target covering an area of about 1 km by 500 meters. Surface samples include rock chip
and chip channel samples, while underground samples are mostly narrow (approx. 10 cm wide)
channel samples across the mineralized structures, although some chip sampling over wider
areas to identify possible stockwork or disseminated mineralization in the wallrock was carried
out. Where discrete veins are present, the veins were sampled separately from wallrock if
possible; for some samples, assay results for vein and wallrock samples have been combined
using weighted averages as indicate in Table 3. Samples generally weighed 2-3 kg. Although
sampling of narrow high grade veins can result in values that are skewed to higher assay values,
the methods utilized and multiple sample campaigns can help mitigate this possibility and the
results are believed to be representative of the mineralization present. Results from the initial
work completed in the Rosario area highlighted the presence of very high grade, generally
narrow veins with as much as 8.88 g/t gold and 8,290 g/t silver with important base metal values
from veins generally less than about 0.5 metres in width. Samples of somewhat wider veins plus
mineralized wallrock have yielded assays of as much as 1,640 g/t silver over 1.05 metres, 441 g/t
silver over 2.35 metres and 8.1 g/t gold over 0.85 metres have been reported (Table 3).
32
Subsequent work focused on evaluating the potential for wider veins and possible lower
grade mineralization in the altered wall rocks to the vein systems. Sampling of wider structures
and mineralized wall rocks adjacent to the narrow veins has yielded assay values ranging from
37 to 440.9 g/t silver and 0.1 to 0.25 g/t gold over sample widths of 1.5 to more than 4 metres
(see table of assay results). The veins appear to be spatially related to granodioritic dikes (Fig.
12). The dikes have altered the andesitic host rocks to hornfels and epidote over an area
approximately 175 metres wide and over 400 metres long. Sampling of the altered rocks has
yielded anomalous gold and silver values of as much as 0.78 g/t gold and 257 g/t silver over a 5
metre sample width (Sample 9106, Table 3). These wider mineralized zones provide a bulk
tonnage target for further exploration.
A new gold-rich zone was found in the El Mono vein system (vein set 4) in 2009 within a
previously unsampled extension to the El Rosario tunnel during a program that included
reconditioning, mapping and sampling (Fig. 11). This gold-rich zone extended for about 60
metres along the Rosario tunnel, and consists of 22 samples with values ranging from 0.06 to
11.57 g/t gold and 6.6 to 358.7 g/t silver. Highlights from the underground sampling include:
- 9.74 g/t gold and 356.7 g/t silver over 1.68 m,
- 3.69 g/t gold and 112.7 g/t silver over 1.10 m, and
- 3.53 g/t gold and 243.1 g/t silver over 0.40 m.
The sampling completed in the workings at the historic Rosario mine are interpreted to
define an ore shoot within the El Mono vein that extends from the Rosario tunnel to the surface,
a vertical distance of more than 200 metres and about 150 metres along the vein (Fig. 14). This
ore shoot is open at depth, but is probably partly exploited above the Rosario tunnel.
A geophysical survey, consisting of pole-dipole induced polarization (IP) and ground
magnetics was undertaken over the Rosario mine area (Fig. 10). Although the magnetic survey
did not yield useful information, partly due to wide line spacing, the IP survey showed strong
anomalies (Lambert, 2008). The IP anomalies occur in the general area of the vein systems at
Rosario, and may correspond to the structural zone and the intrusive body and related alteration
in the wallrocks of the vein systems (Fig. 15).
33
Figure 14 Vertical vein projection of the Mono vein, Rosario mine, showing location of possible “clavo” or ore
shoot. The plan map in the lower portion of the figure shows part of the Rosario workings of Fig. 11.
34
Table 3 Selected assay results from veins in the Rosario area, Urique district
Vein
Vein 1
Vein 2
Vein 3
Vein 4
Vein 5
Level/sample
Surface
7466
Rosario level
9050
9053
Width (m)
Au (g/t)
Ag (g/t)
Cu (%)
Pb (%)
Zn (%)
0.85
8.13
25.0
-
0.1
-
0.65
NA
0.28
0.36
61.8
269
0.4
0.8
0.1
0.2
0.2
0.1
0.14
0.89
122
245
-
0.3
0.3
0.3
-
2.87
1155
1.1
2.7
0.2
4.93
804
0.2
0.4
0.1
0.80
0.10
4.37
1.27
0.27
0.60
0.28
2.14
0.25
0.32
1.30
1.46
405.3
3220
174.7
290
1320
457
0.2
1.2
0.1
0.1
0.6
0.7
0.9
7.4
1.9
0.3
1.1
0.9
0.9
6.9
0.4
0.1
0.2
0.4
0.10
3.72
425
0.6
0.4
0.8
0.95
1.60
0.79
0.13
54.8
55.6
0.2
0.2
0.2
0.1
0.3
0.25
0.80
1.15
2.65
1.45
3.59
0.41
0.27
0.12
0.15
842
48.5
82.9
157
229
0.2
0.1
0.1
3.8
0.2
2.2
0.4
0.4
4.9
0.1
0.3
0.2
0.2
0.10
0.10
0.35
2.24
0.5
0.2
0.4
1.3
0.2
0.2
2.20
0.36
0.09
0.36
88.1
98
0.1
0.1
0.1
0.5
0.2
1.2
0.80
2.75
1.55
0.25
1.05
0.20
2.35
0.20
0.12
0.50
0.83
0.78
1.22
5.77
0.52
1.73
0.52
2.78
8.88
1.09
581
149.7
251.3
1450
1640.8
8290
440.9
3640
1030
196
0.2
0.2
0.3
1.6
0.1
1.0
0.3
-
5.3
0.6
0.9
4.2
1.1
5.0
1.4
11.7
8.6
0.8
0.5
0.1
0.1
0.2
0.3
0.6
0.2
0.3
1.8
0.1
1.55
5.00
1.15
1.20
0.27
0.78
0.13
0.71
37.1
257
38.7
109
0.1
-
0.1
0.8
0.1
0.1
0.0
0.1
0.2
0.1
Possible vein 2 at surface
8449
0.40
8450
0.20
Texcalama level
6842
0.17
El Salto Level
6858
0.22
Surface workings
7483-84
including 7483
9010-14
including 9012-13
including 9013
9014
El Salto level
6859
Rosario level
9129
9135
Surface
9028
9030
9044
9045-47
including 9047
Texcalama mine
6838
6840
Rosario level
9116
9121
Surface workings
9031
9039-43
including 9041-43
including 9042
7485-86
including 7485
7487-98
including 7487
7490
7491
Rosario Level
9103
9106 wall rock
9108
9113
35
1550
524
Figure 15 Comparison of cross section from Fig. 11 with IP pseudosection over the Rosario area.
Other mines. Work at other mines and prospects in the Urique camp was also completed.
The most interesting have been the La Patricia and Don Anchondo areas, as shown in the Tables
4 and 5 below.
36
Table 4 Assay results, La Patricia mine area
SAMPLE
Width (m)
7401
0.95
7402
1.00
7413
1.00
7434
0.10
7436
0.20
7437
0.25
7448
0.45
7450
0.75
7451
0.75
7452
1.00
7453
1.00
Extension under cover
7414
Soil
7431
Soil
Au (g/t)
0.02
<0.005
0.01
6.61
0.05
0.76
0.02
1.15
0.37
0.01
0.01
Ag (g/t)
127.0
21.0
17.2
1310.0
96.1
493.0
22.4
308.0
541.0
19.9
19.3
0.24
0.23
Pb (%)
0.4
4.0
0.3
1.5
0.6
0.5
0.8
0.4
0.3
219.0
25.0
0.5
0.2
Table 5 Assay results, Don Anchondo mine area
SAMPLE
6802
6805
6808
6877
6878
6879
6880
6881
6882
6883
6884
8.1.2
Width (m)
1.40
2.50
1.00
1.08
0.30
0.40
0.20
0.12
0.35
1.60
0.20
Au (g/t)
4.65
0.28
1.61
0.11
0.27
0.22
0.29
0.23
0.12
0.34
0.12
Ag (g/t)
131.0
3.1
55.6
4.4
8.6
6.5
10.4
6.2
4.9
8.2
2.4
Pb (%)
0.2
0.3
0.2
0.4
0.3
0.3
-
Zn (%)
0.1
0.2
0.5
0.5
0.2
0.1
-
Other Areas
A number of other targets have been visited and sampled throughout the southernmost
portion of the Urique Property (Fig. 7). Three key ones are:
•
El Platano: Reported to contain a 1.2 km long vein that averages 4 metres in width; 3
samples taken by the CRM, averaged 4.0 metres in width with 1% Cu and 84 g/t Ag.
Sampling by Yale returned 3.4 m grading 2.08 g/t gold, 1.1m grading 2.48 g/t gold and
63.7 g/t silver, and 0.7 m grading 0.78 g/t gold and 250.0 g/t silver.
•
Los Alisos: A large visible iron oxide anomaly, possibly consisting of advanced argillic
alteration, surrounding an intrusion at Cobriza with anomalous copper and gold values;
the CRM had compared this area to area around the El Sauzal mine prior to its discovery
(Aparicio and Farias, 1975). This target lies at least partially on ground controlled by
other companies.
•
El Frijolar: An alteration zone approximately one square kilometre in size that is rich in
iron oxides. A 0.5 m vein is reported to outcrop for 50 metres - 2 samples by the CRM
gave 4.2 g/t gold and 46.9 g/t gold (Aparicio and Farias, 1975) – this has not been
followed up by Yale.
37
8.2
Urique North
The Urique North area lies on the west rim of the Urique canyon and extends in a north
south direction from Cuiteco in the north to Mesa de Arturo in the south (Fig. 16). The area
includes two target areas, San Pedro, near the pueblo of Cerocahui, and Cuiteco, near a pueblo
with the same name that lies on the Chihuahua-Pacific railway line.
A third area, Cerro
Colorado, was explored by Yale but was dropped in 2010.
Regional exploration, including reconnaissance mapping and sampling and stream
sediment sampling, has been completed over the portions of the Urique North area between the
main exploration targets. To date no significant mineralization has been identified other than in
the areas mentioned.
8.2.1 San Pedro
Early in 2007 exploration work in the northern part of the property focused on the San
Pedro target area which surrounds the historic Sangre de Cristo mine (Fig. 17), owned by a third
party.
Past reconnaissance by EXMIN had identified several small mines and prospects
developed by gambusinos or small miners on quartz veins with assays ranging from 6.6 to 35 g/t
gold and 61 to 401 g/t silver over 0.3 to 1.1 metre vein widths (Fig. 18, 19) (Table 6). The area
consists of several intercalated lithologies of Tertiary volcanic rocks cut by several sets of veins
and vein sets (Fig. 20).
Three sets of veins, with strikes to the northeast, northwest and north-south, were
identified during subsequent geologic mapping by Yale in early to mid 2007, and areas of
widespread alteration near vein intersections were identified as possible bulk tonnage targets
(Fig. 21). Approximately 292 channel samples were taken in surface exposures and trenches in
an area measuring 2 km by 0.5 to 1 km. Most of the samples were taken by separating vein
material from altered wallrocks and unmineralized rock in individual samples, with the average
grades for mineralized intervals based on weighted averages (Table 6). In the opinion of the
author, the sampling is representative of the mineralized systems present.
Several of the narrow vein systems have yielded high-grade precious metals assays,
ranging up to 137.5 g/t gold and 133 g/t silver over 0.25 metres (Table 6). Also, sampling at the
intersections of some north-south and northeast vein sets yielded assays of 0.33 g/t gold and 7.6
g/t silver over 21.65 metres. Four prospective areas for further exploration were identified, but
38
the two main areas were on ground not controlled by the Urique Joint Venture at the time
because the concessions had been cancelled but had not been declared free for staking by the
Mexican government (Fig. 21). This ground was subsequently staked by Yale in November,
2010. This mining concession has been already approved and granted by the Mexican Federal
Government. All necessary steps have been taken by Minera Alta Vista, S.A. de C.V. to obtain
it. The Mexican Public Mining Registry has informed Yale that the only step left is the signature
of the Director of the Department of Mines and assignment of the title number. In the meantime,
the temporary number for such concession is 016/45665 which signifies the validity of the
concession. Upon granting of the concession San Pedro, Minera Alta Vista, S.A. de C.V. will be
recorded holder, and the concession will not expire until 50 years from its date of issuance. Due
to the fact that the concession has been already granted there are no limitations whatsoever
regarding the current or future work on the concession.
Table 6 Assays for selected samples, San Pedro
Area/
Sample*
Width
(m)
Au
(g/t)
Vein NE 1
3715
3712-3714 FW
3716 HW
3671, 3672
3673
3670
0.35
12.0
4.0
1.3
1.5
Dump
4.38
0.33
0.21
3.65
0.49
12.50
38.6
11.0
1.4
14.0
2.2
42.5
2.10
0.35
0.20
0.52
2.87
20.70
9.4
36.8
133.0
0.33
7.6
Vein NE 3
3803-3805
3734
3733
Intersection NE and NS Veins
3710-3716
21.65
Ag
(g/t)
Vein NW 6
3708
3726
2699
3821
3822 FW
3824
3825 HW
0.30
0.25
0.70
0.25
3.0
0.50
1.7
7.07
137.50
0.86
2.41
1.01
0.36
2.40
19.8
133.0
8.7
28.8
17.0
6.1
0.2
Split, Vein NW 4
3817
3820
0.30
0.20
12.45
21.40
129.0
42.6
HW and FW are hangingwall and footwall samples of
the immediately preceding vein sample
39
A geophysics program conducted at the Project included 4.8 line km of IP and ground
magnetometer surveys within the San Pedro target area (Fig. 21). Although the magnetic
surveys did not yield useful information, in part due to widely separated lines, the IP, using a
pole-dipole arrangement with a 50 metre spacing did yield useful data (Lambert, 2008). The IP
results identified geophysical anomalies that appear to coincide with mineralized structures and
veins, and appear to reflect the dip of the structures as measured on the surface (Fig. 22).
40
Figure 16 Exploration area of the, Urique North sector, Chihuahua State, Mexico.
41
Figure 17 Portal of the historic Sangre de Cristo mine.
Figure 18 Gambusino workings in the San Pedro area of the Urique Project.
42
Figure 19 Quartz veining in dioritic intrusive rock, San Pedro area, Urique project.
Two diamond drill holes were completed in the San Pedro target area in late April and
early May, 2008 at the end of a larger drill program on the Cerro Colorado area that was
subsequently dropped. These holes were drilled on lower priority target areas on the ground
controlled by the Urique Joint Venture before the ground covering the better targets was acquired
(Fig. 21). Hole UDO-08-1 tested veins at the northern portion of the target underneath one of the
trenches with anomalous values. This hole cut a zone of strong quartz vein stockwork and
silicification that corresponds with that exposed in the trench. The interval returned anomalous
values of gold and silver. The second hole drilled in the San Pedro target was USP-08-1,
designed to test the extension of the high grade veins to the south of the surface exposures on the
San Pedro concession that was not controlled by the Urique Joint Venture. This hole did not
reach the target as it was stopped short. Subsequent drilling in this area should include some
road building to drill closer to the projection of the mineralized structures.
43
Figure 20 Geologic map, San Pedro area, Urique Project, Chihuahua State, Mexico.
44
Figure 21 Vein and target map, San Pedro area, Urique Project, Chihuahua State, Mexico
45
Figure 22 Comparison of geologic cross section and IP pseudosection on line SPL-3 at San Pedro.
46
8.2.2
Cuiteco
At Cuiteco, located in the northern most portion of the property, a large area of alteration
measuring several hundreds of metres across is exposed in road cuts and in the cuts for train
tracks (Fig. 23, 24). This widespread alteration is hosted in a series of Tertiary volcanic rocks
(Fig. 25) and consists largely of clay-sericite, silica and pyrite and is similar to that observed at
high structural levels in several districts in the Sierra Madre Occidental. Preliminary mapping
and sampling was conducted at Cuiteco in September to November, 2007; 146 samples were
taken over an area of about 1.5 km by 3 km. A NNW trending structural zone with some
anomalous geochemistry, including base metals, silver, mercury and locally, gold was identified.
In the most recent work in early 2010, several large (+100 metre) zones of cavernous and
sacharoidal silica, locally constrained by the volcanic stratigraphy, were recognized and seem to
be related to rhyolitic intrusions (Jurado, 2010) (Fig. 26, 27). This material was originally
interpreted as vuggy silica in a high sulphidation setting, but it may have formed due to acid
leaching. Additional field work is required to properly understand this large area of potentially
significant alteration.
Figure 23 Panorama of the Cuiteco area showing strong alteration in the center of the photo.
47
Figure 24 View of strongly altered volcanic rocks in train cut, Cuiteco area. Photo by Ing. Carlos Jurado.
48
Figure 25 Geologic map, Cuiteco area, Urique Project, Chihuahua State, Mexico.
49
Figure 26 Strong Clay-sericite plus pyrite alteration with stratigraphic control, Cuiteco area.
Photo by C. Jurado
Figure 27 Cavernous and sacharoidal residual silica exhibiting stratigraphic control, Cuiteco area.
Photo by C. Jurado.
50
9.0
Drilling
A drill program was conducted at the Urique Project from March to May, 2008. Most of
the area that was drilled was subsequently dropped due to escalating payments to the underlying
owner. Limited drilling was done in the San Pedro target area (Table 7). The most important
targets at San Pedro were in an area that had yet to be declared free for staking and were not drill
tested. This concession, San Pedro, was subsequently declared free and was staked by Yale in
November, 2010. With respect to the application for the San Pedro concession: all necessary
steps have been taken by Minera Alta Vista, S.A. to obtain such concession and the only
remaining step is the signature of the Director of the Department of Mines and assignment of the
title number; the Mexican Federal Government has approved and granted such concession and
issued a temporary number which signifies the validity of such concession; upon granting of
such concession, Minera Alta Vista, S.A. will be the recorded holder and such concession will
expire 50 years from its date of issuance; and due to the fact that such concession has already
been granted, there are no limitations whatsoever retarding the current or future work on such
concession.
The core was logged and then selected intervals were sampled using a blade type
hydraulic splitter. Samples were generally 0.5 to 2 meters in length depending on the geology,
and half of the split sample was sent to the laboratory for analysis. The remaining half of the
core was retained on site for future reference. Sample standards and blanks were inserted in the
sample stream for quality control-quality assurance.
Two diamond drill holes were drilled in the San Pedro target area (Table 7, Figs. 20, 21).
Hole UDO-08-1 tested veins at the northern portion of the target near and down dip of a trench
that yielded 22 meters with 0.107 g/t gold, including 6 meters with 0.225 g/t gold, with elevated
antimony and mercury values.
The hole cut a 21.8 meter interval of strong quartz vein
stockwork with silicification that yielded locally anomalous concentrations of precious metals
and indicator elements antimony and mercury; the best sample was 2 meters with 0.143 g/t gold.
This interval is interpreted to correspond with that exposed in the trench, and is believed to
approximate true with as it cut across the structure at a high angle. This drill hole demonstrated
the continuity of the mineralized structure at depth below surface exposures, but the amount of
drilling was insufficient to make conclusions as to the potential of this mineralized structure.
51
Table 7 2008 Urique Project Drill Data
Hole
Easting
Northing
Inclination
Azimuth
TD (m)
UDO-08-01
793,731
3,023,435
-50
90
243.1
USP-08-01
794,364
3,021,669
-50
68
99.85
Comments
Target 4, anomalous
metals
No intercepts, cut short
The second hole drilled in the San Pedro target was USP-08-1, and was designed to test
the extension of the high grade veins approximately one kilometre to the south of the surface
exposures in the centre of the San Pedro target. This hole was started on an existing road far
from the surface exposures and did not reach the target because the hole was stopped short as it
was determined that the downhole depth to the projected target was too great. Subsequent
drilling in this area should include some road building to drill closer to the projection of the
mineralized structures.
10.0
Sample Preparation, Analyses and Security
All samples taken at the Project were labelled with the sample site number and a tag with
the number was placed in the sample bag. All samples were stored at the Urique Joint Venture’s
rented field offices and were kept secure by company personnel at the site. Samples were
bundled into large rice or sugar sacks that were labelled with identifiers for the company, project,
the range of sample numbers included, and the total number of bags in a shipment. Samples
were either picked up by laboratory personnel in their vehicle, or were delivered to the laboratory
preparation facility by project personnel.
Samples from the Urique Project exploration program were prepared and analyzed by
several laboratories during the course of exploration: these laboratories, ALS Chemex, Stewart
Group – Echo Tech Laboratories, and Inspectorate, are all independent of Mammoth and are
accredited. ALS Chemex (now ALS Group) is a worldwide analytical laboratory with completed
registration to ISO 9001:2008, and a number of analytical facilities have received ISO/IEC
17025:2005 accreditations for specific laboratory procedures. The Stewart Group operates a
worldwide network of analytical and testing laboratories; several labs have received ISO 17025
accreditations for specific laboratory procedures. Stewart Group was recently purchased by ALS
Group. Inspectorate (also Inspectorate IPL) is a worldwide analytical and testing laboratory and
several labs have received ISO 17025 accreditations for specific laboratory procedures.
52
Samples generally consisted of 1.5-5 kg of material and include rock chips, stream
sediments and soil samples. For the early stages of exploration only internal lab quality control
samples were utilized, and no company standards were inserted.
For the later stages of
exploration, including the soil and stream sediment samples, standards and blanks were inserted
into the sample stream. The standards utilized were obtained from WCM Minerals of Canada,
and were samples PM 1130 (gold and silver) and PB 130 (copper, lead, zinc, and silver). Blanks
were made from several materials. All of the laboratories utilized have strict internal quality
control/quality assurance procedures, including insertion of standard and blank samples, as well
as systemic duplicate sample assays.
For samples sent to ALS Chemex, the preparation and analyses were performed in their
facilities in Mexico and Vancouver, respectively. Gold analyses were performed by 30 gram fire
assay with an AA finish. Gold analyses for samples with more than 10 g/t gold in the initial
assay (overlimit) were reanalyzed by gravimetric methods. Silver was analyzed as part of a
multi-element ICP package with an aqua regia digestion. Samples with overlimit silver (> 100
g/t Ag) in the initial assay were reanalyzed by AA.
Samples submitted to Stewart Group, Echo Tech Laboratory, Ltd. were prepared and
analyzed in their labs in Mexico and Canada, respectively. Analyses were by 30 gram fire assay
with an AA finish for gold. Silver was analyzed as part of a multi-element ICP package with an
aqua regia digestion.
Samples submitted to Inspectorate IPL were prepared and analyzed at their labs in
Mexico and Canada, respectively. Analyses were by one assay ton fire assay with an AA finish
for gold. Silver was analyzed as part of a multi-element ICP package with an aqua regia
digestion.
For the drill program at the Urique Project, core samples were split lengthwise into two
approximately equal portions; one half was sampled and sent to the analytical lab, and the second
half was retained and stored on site at the Urique Joint Venture’s field office near the Project.
The Urique Joint Venture conducted an internal quality control/quality assurance program
consisting of insertion of standard and blank samples in the drill core sample stream. The
standards for the blind QA-QC were prepared by Inspectorate for EXMIN Resources.
53
Drill samples were prepared and analyzed by ALS Chemex in their facilities in Mexico
and Vancouver, respectively. Samples generally consisted of 2-7 kg of material. Gold analyses
were performed by 30 gram fire assay with an AA finish. Silver was analyzed as part of a multielement ICP package, originally with an aqua regia digestion, and selected intervals were reanalyzed using a 4 acid digestion due to the presence of oxide silver minerals that do not
completely digest using aqua regia.
The QA/QC samples inserted by both the laboratory and the blind samples have been
reviewed and the assay results fall within acceptable ranges. It is the opinion of the author that
the methods of sample preparation, security, analysis and quality control/quality assurance
procedures have been adequate for the exploration programs to date.
11.0
Data Verification
The data collected at the Project from 2006 to 2008 was done under the supervision of the
author, and no additional samples were taken for this report. The author was intimately involved
with the initial stages of exploration and reconnaissance, and supervised the work done later
under the Urique Joint Venture. In several areas, assay results from the initial reconnaissance
visits were confirmed and expanded on during subsequent more detailed mapping and sampling,
programs, including some trenching. It is the opinion of the author that the data presented in this
report is reliable.
12.0
Mineral Processing and Metallurgical Testing
No metallurgical tests have been made.
13.0
Mineral Resource Estimates
There is currently no mineral resource estimate at the Project.
14.0
Adjacent Properties
The Urique Project lies within a strongly mineralized region with several recent
discoveries and mines. Exploration and mining projects on adjacent properties include Monterde
(Kimber Resources), San Miguel (Paramount Gold), Cieneguita (Pan American Goldfields), El
54
Sauzal (Goldcorp), and Bolivar (Dia Bras Exploration) (Figs. 2, 5).
The Palmarejo mine
(Coeur), although not an adjacent property, is included in this discussion because it is located
near the Urique property and has similarities to the Urique district.
The Monterde property of Kimber Resources Inc. (Kimber), is adjacent to the northern
portion of the Urique property near Cuiteco. The main target at the Project is located about 20
km north of the Cuiteco target area, and consists of a series of low sulphidation epithermal vein
systems that have been explored by Kimber for the last several years. Kimber most recently
reported a NI 43-101 compliant drill indicated resource calculation in 2009 of 3.694M metric
tonnes at grades of 4.19 g/t Au and 165.2 g/t Ag utilizing a 3.0 g/t gold-equivalent cutoff, and
contains 375,000 oz gold and 19.7M oz silver without taking into account metallurgical
recoveries (Giroux et. al, 2009). The relatively high cutoff is reasonable for a lower tonnage
operation. A preliminary economic assessment is underway, and a slightly different in-pit
resource was reported in 2011 (Giroux et. al, 2011).
Paramount Gold and Silver Corp’s. (Paramount) San Miguel and Andrea project land
package is located adjacent to much of the western boundary of the Urique Property. The main
targets at San Miguel are located some 20-25 km west of the Urique north project area, and
consist of epithermal veins along a regional scale structural corridor. These veins are similar to
those found in the Urique district. Paramount has reported an NI 43-101 indicated resource of
4.392M metric tonnes at grades of 0.61 g/t Au and 57 g/t Ag containing 87,000 oz gold and 7.9M
oz silver using a cutoff of 25 g/t silver-equivalent (Gustafson, 2011).
The El Sauzal property of Goldcorp Inc. (Goldcorp) is adjacent to the southern portion of
the Urique property. The El Sauzal deposit is a high sulphidation epithermal system that lies and
is an operating mine located approximately 10 kilometres to the south of southern Urique Project
boundary. The mine has produced between 2 and 3 million ounces of gold, and is expected to
produce 150,000 ounces of gold in 2010. Although the El Sauzal deposit is not similar to the
main targets at the Urique Project, similar alteration occurs in the Urique south sector (at least
partially on concessions owned by third parties), and exploration for this type of mineralization
is warranted.
The Cieneguita property of Pan American Goldfields Ltd. (Pan American), formerly
Mexoro Minerals Ltd., is adjacent to the southwestern corner of the Urique property. Measured
55
and indicated resources were reported in 2009 to be 20.1M tonnes at grades of 0.74 g/t Au, 51.8
g/t Ag, 0.21% Pb, and 0.26% Zn (Wood, et. al, 2010). The Cieneguita deposit is described as a
diatreme breccia, the first recognized in the region. The alteration characteristics of this eroded
deposit are similar to those observed in the largely un-eroded Cuiteco area.
The Bolivar property of Dia Bras Exploration Inc. (Dia Bras) is located adjacent to the
southwestern boundary of the Urique property and lies between the El Sauzal and Cieneguita
properties. At the Bolivar property, also known as the Piedras Verdes district, porphyry related
skarn deposits contain copper and zinc mineralization with some gold and silver. Dia Bras has
been operation a pilot mining operation for several years, and in 2009 reported a measured and
indicated resource o 1.188M metric tonnes with 1.26% Cu, 2.35 % Zn, 0.28 g/t Au, and 11.1 g/t
Ag at a 1.00 copper-equivalent cutoff, with contained metals of 33 thousand pounds of copper,
61.6 thousand pounds of zinc, 10,620 oz of gold, and 1.17M oz of silver (Camus, 2009).
Although the targets currently being explored at the Urique property are of the epithermal vein
style, intrusion related mineralization is present within the district and exploration for this type of
mineralization is warranted at Cuiteco and in the Urique south sector.
The Palmarejo property of Coeur d’Alene Mines Corp. (Coeur) is not adjacent to the
Urique property, but is located in the general region, just west of the San Miguel property
described previously. The Palmarejo mine exploits rich clavos or ore shoots in veins similar to
those in the Rosario mine and the Urique district in general. On its website, Coeur reported yearend proven and probable reserves totalling 71.8 million silver ounces and 870,200 gold ounces
and measured and indicated resources of 16.6 million silver ounces and 191,474 gold ounces in
2010. The recently commissioned mine has capacity to produce 190,000 oz of gold and 9M
ounces of silver annually.
The information presented in this section has not been independently verified by the
author, and the results of work at the nearby properties are not necessarily indicative of the
mineralization that will be encountered with further exploration of the Urique Property.
15.0
Other Relevant Data and Information
The author knows of no additional relevant data or information.
56
16.0
Interpretation and Conclusions
The Urique Project is located in a strongly mineralized region that has seen important
historical production, as well as substantial modern exploration in the last 10 to 15 years by
several foreign companies. Several mines and development projects have resulted from this
work. The Urique Property covers several areas prospective for mineral discoveries, and has
been explored for precious metals by Yale Resources. Exploration programs carried out from
2005-2010 have identified several areas prospective for significant precious metal mineralization
warranting further work.
The Urique South sector of the Project lies within the Urique canyon and covers or
includes several mineralized areas. Yale has completed first pass reconnaissance work in several
areas, and has completed substantial exploration work at the Urique camp or district. The Urique
camp contains numerous small mines and prospects and had important but unknown historic
production.
Yale has identified a strong exploration target in the Rosario mine area in the Urique
camp. Work to date indicates that a gold-silver vein target exists, as well as a potential bulk
tonnage target. More work is needed in rehabilitating some of the underground workings and
completing a mapping and sampling program. Drilling of the Rosario target is also warranted.
The Urique North sector of the Project lies on the plateau west of the Urique Canyon.
Two main areas of interest have been delineated at San Pedro and Cuiteco. At San Pedro, goldsilver bearing veins have been mapped and sampled and provide potential high-grade exploration
targets. Potential for lower grade bulk tonnage mineralization occurs in areas near structural
intersections. The San Pedro area warrants more exploration work, including sampling and
perhaps trenching on the recently acquired San Pedro concession, and also warrants a drilling
program.
The Cuiteco area exhibits a large area of strong alteration measuring hundreds of metres
across. Exploration work to date has identified areas with anomalous metal values, but no
discrete target has yet been delineated. Further work to understand this mineralized area is
warranted.
57
Exploration work at the Urique Project has resulted in the identification of several target
areas that warrant further exploration, including drilling. In the opinion of the author, the work
performed to date has been completed within the standards of the industry and is provides is
reliable. The Project is at an early stage of exploration, however, and significant risks and
uncertainty remains before any economic value or viability can be determined.
17.0
Recommendations
Future exploration programs at the Urique Project should include work at several of the
target areas described previously in this report. Significant exploration efforts are warranted at
the higher priority San Pedro and Rosario targets, and a continuation of the exploration programs
at the lower priority Cuiteco and Urique canyon targets is also warranted. The recommended
exploration is described in more detail for each area below, and a proposed budget is presented
after the discussion.
In addition, according to representatives of Yale, the taxes at the Project area are
approximately 35,000 dollars every 6 months; therefore, the large land position should be
reduced to the best areas for exploration that have been identified. Reconnaissance work already
done has identified the areas of most interest, although some additional reconnaissance work
would probably also have to be completed prior to the land reduction.
At the Rosario mine target, work programs must include the continued rehabilitating and
opening the existing adits at Rosario, El Salto, Texcalama and Feliciano, followed by more
detailed mapping and sampling of the workings at El Salto, Texcalama and Feliciano. Also,
additional detailed surface mapping of the target area, including location of all workings and
prospects as well as structures, is necessary to create a 3D geological data base that would aid in
targeting for a drill program.
A 1,000 metre surface and/or underground drill program targeting lower grade, bulk
tonnage mineralization and high grade underground clavos or ore shoots is warranted in the
Rosario mine area. The exploration program described above for this area should provide
sufficient data to be able to determine the best drill locations and whether these are from the
surface or underground. Road building costs could be significant for a surface drill program due
to the topography and the orientation of the veins. The use of a drill rig capable of drilling low
58
angle or up-angle holes from the surface as well as underground should be evaluated, as this
would make the drill holes shorter and decrease road building costs considerably. This program
would preferentially be done in the dry period from October to June as the access on the east side
of the Urique River is difficult during the rainy season.
Work programs elsewhere in the Urique district should include more detailed mapping
and sampling of some of the other areas with an emphasis on the historic workings. Further
mapping, sampling and data compilation for the Sauz, Platano, Los Alisos, and Frijolar targets is
necessary to determine their importance, and to evaluate possible acquisitions of concessions
from third parties.
At the San Pedro target area, the exploration program should be continued to evaluate the
targets identified on the San Pedro concession once the Director of the Department of Mines has
issued the title number. This work should include remapping of the areas surrounding the
historic Sangre de Cristo mine and reevaluation of the sample results to date. The program
should be directed towards evaluating the bulk tonnage potential for the area and would include
more detailed mapping and sampling, including additional trenching. Subsequent drilling in this
area should include road building to drill closer to the projection of the mineralized structures
and the mapped intersections. A 1,000 metre drill program would be required in a first pass
effort to adequately test the main targets.
Exploration work at Cuiteco should include continuing work with local mapping,
sampling and prospecting. A soil sampling program also may prove effective in this area. The
exploration program should entail alteration mapping, possibly with a Pima survey.
A proposed budget for an approximately one year exploration program is presented in
Table 8 below, including 2,000 metres of drilling, estimated at $150 per metre including road
building and drill samples. Note that all costs are in Canadian dollars:
59
Table 8 Proposed exploration budget, Urique Project.
Urique South.............................................................................................................
Rosario Mine..................................................................................................
Mapping (2 months).......................................................................20,000
Sampling (300)...............................................................................15,000
Drilling (1000 metres)..................................................................150,000
Urique Canyon ...............................................................................................
Mapping (1.5 months)....................................................................15,000
Sampling (200)...............................................................................10,000
....................................................................................................................................
Total Urique South........................................................................................210,000
Urique North ............................................................................................................
San Pedro .......................................................................................................
Mapping (3 months).......................................................................30,000
Sampling (300 samples).................................................................15,000
Drilling (1000 metres)..................................................................150,000
Cuiteco ...........................................................................................................
Mapping (1.5 months)....................................................................15,000
Sampling (100 samples)...................................................................5,000
....................................................................................................................................
Total Urique North........................................................................................215,000
Reconnaissance/land reductions .............................................................................
Recon (1 month, 50 samples)..............................................................15,000
....................................................................................................................................
Total Reconnaissance......................................................................................15,000
....................................................................................................................................
Total Budget ......................................................................................CAD 440,000
60
18.0
References
Aparicio C., E. and Farias G., H., 1975, Reconocimiento geológico-minero regional del
área de Urique y sus porciones sur y sur-oeste en el Estado de Chihuahua, 84p.
Camus, Yann, 2009, Technical report resources update, February 2009, Bolivar Project,
Chihuahua Province, Mexico, 71p.
Gibson, P. C., 2008, Urique Project, Report for year 2, Yale joint venture; internal report
EXMIN Resources Inc.-Yale Resources, 22 p plus appendices.
Giroux, G. H., Gowans, R., Hennessey, B. T. Richards, J. B., and Mare, P. H., 2009, An
updated mineral resource estimate for the Carmen and Veta Minitas deposits,
Monterde Project, Guazapares municipality, Chihuahua State, Mexico, 115p.
Giroux, G. H., Godard, M, Gowans, Haile, J., Jacobs, C., Kirkham, G., and Leader, J.,
2011, Updated preliminary assessment of the Monterde project, Guazapares
municipality, Chihuahua State, Mexico, 153p.
Gustafson, M. M., 2011, Technical report on the San Miguel Project, Guazapares mining
district, Chihuahua, Mexico, 131p plus appendices.
Hacettepe University: Department of Mining Engineering Online Dictionary on Mining,
Mineral and Related Terms, www.maden.hacettepe.edu.tr/dmmrt/index.html.
Hernandez, P., I., 2011, Minas de la baja Tarahumara, Impresora Chihuahua, 364p.
Jurado, C., 2010, Informe sobre trabajos de reconocimiento en el área de Cuiteco, internal
company report, Yale Resources, 9p.
Lambert, G., 2008, Report on ground magnetometer and induced polarization surveys,
Urique Project, Chihuahua State, Mexico, 17p.
Servicio Geológico Mexicano, 2002, Carta geológico-minera Hoja Ciudad Obregon G1203, 1:250,000.
Servicio Geológico Mexicano, 2000, Carta geológico-minera Hoja San Juanito G13-01,
1:250,000.
Servicio Geológico Mexicano, 2004, Carta geológico-minera Hoja Temoris G12-B39,
Hoja Temoris, 1:50,000.
Servicio Geológico Mexicano, 2006, Carta geológico-minera Hoja Batopilas G13-A41,
1:50,000.
Servicio Geológico Mexicano, 2007, Monografía geológico-minera del estado de
Chihuahua, digital version, update in progress, 328p.
Servicio Geológico Mexicano, 2008, Carta geológico-minera Hoja Cieneguita G12-B49,
1:50,000.
Wood, D. R., Puritch, E. J., and Yassa, A. 2010, Technical report, geology and resources,
Cieneguita Project, Chihuahua, Mexico, 114p.
61

Technical Reports - Mammoth Resources Corp.

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