Penoles
- Commodity:Gold, Silver
- Location:Durango, Mexico
- Size:350 km²
- Option:Optioned to Sierra Madre Developments Inc.
- Status:Drilling underway at Jesus Maria silver target
The Penoles Property is a 350 square km concession located in the Penoles Mining District, Durango, Mexico. The Penoles Mining District is where the mining company Compania Minera Industrias Penoles was founded 120 years ago and is located near the recent discoveries at Penasquito (Goldcorp) and Juanicipio (MAG Silver) which are in the same Durango-Zacatecas metalliferous region. The concession has a diversity of deposit types, including the Jesús María Pb-Zn-Cu vein system, San Rafael Ag vein system, El Tubo Au vein System, the Pinchanzo gold zone and the El Capitan disseminated epithermal gold system.
In 2012 Riverside’s partner, Sierra Madre, drilled the El Capitan target and discoved the Pinchanzo gold zone. Drill results in 2012 (News Release July 19, 2012 and July 12, 2012) complimented the highlights from 2011 and preliminary metalurgical testing was completed on the El Capitan zone (News Release, Sept 6, 2012). Results of the 2012 program are considered significant because El Capitan appears broadly similar to Argonaut Gold’ El Castillo Mine located approximately 90 kilometers south of El Capitan. Argonaut Gold is successfully heap leach mining El Castillo at an average grade of 0.32 g/t gold with a cut-off grade of 0.15 g/t Au.
Drilling Underway at Jesus Maria Silver-Gold Target at the Penoles Project:
Riverisde and joint venture partner Sierra Madre have started drilling at the Jesus Maria silver target which is a historic silver mine on the Penoles project. The diamond drill program will initially test beneath and adjacent to surface-sampled trench areas and along the structural trend of the vein system, and targets shallow intercepts along strike from high-grade Ag-Pb-Zn historic mine workings. (News Releas March 26th)
In addition to the Jesus Maria drill program, Riverside has also received a preliminary metallurgical testing report. Initial systematic column leach testing commenced for El Capitan utilizing approximately 1,200 kilograms of core from the 2011 drill program. An in depth explanation of the testing can be found here (News Release Sept 6, 2012)
El Capitan Target
The El Capitan Target is considered an advanced, bulk tonnage oxide gold prospect. Previous widely spaced drilling at El Capitan (3 holes completed by Aurcana in 2004 and 5 holes completed by Riverside in 2008) intersected a 30 to 70 meter wide zone of low grade, oxide gold mineralization that appears to be traceable laterally for more than a kilometer along a shallow, south dipping volcanic – sedimentary contact. The five hole drill program at El Capitan confirmed the hypthothesized epithermal style gold deposit located at the basal geologic contact. This geologic feature appears to be predictable and so far consistently traceable laterally into a wide and continuous surface exposed volcanic-sedimentary contact similar to other known gold districts such as Round Mountain, Nevada and Mulatos, Sonora. Preliminary geological work by Riverside indicated potential for a bulk tonnage, low grade deposit and this recent drill program has validated the conceptual model. A total of 22 drill holes (fifteen drill holes in 2011 and seven historic drill holes) have been completed within the Main Zone. This zone has been traced by drilling over a strike length of approximately 700 meters and appears to be open for expansion down dip and along strike to the west of the area that has been drill tested.
The geologic interpretation indicates potential expansion with further drilling and potential growth of the gold-rich mineralized volume. Holes 1 and 2 both intercepted the targeted silicified, oxidized volcanic-sedimentary permeable contact zone with gold values across selected intervals returning 9.80 metres of 1.07 g/t Au and 9.55 meters of 1.11 g/t Au, respectively. Longer intervals of 29.2 metres of 0.53 g/t Au and 32.3 metres of 0.66 g/t Au were intercepted in holes 1 and 2 respectively. Step out drill holes 3, 4, and 5, penetrated the stratigraphic contact with gold bearing intervals of 0.2g/t to 0.4g/t Au and begin to define a large volume, lower gold grade of mineralized rock. Results from the current drill program taken in conjunction with previous drill results from the Capitan Hill define a high grade, greater than 1 g/t, gold zone inside a large volume of approximately 0.5 g/t Au average grade in oxidized rocks. This mineralized area links with the surface exposed gold rich zone which has a strike of greater than 1,000 meters and has now been drilled over a 700m x 200m area and remains open to the Northwest of the contact zone.
Jesus Maria Target
Compania Minera Industrias Penoles mined the Jesús María vein system from 1887 to 1908 and produced grades from 300 to 2000 g/t Ag, 3-12% Pb, and 4-10% Zn to a depth of 200 meters.
In May, 2011 Riverside and Sierra Madre completed a mechanical trench sampling program at the Peñoles Property and reported high grade silver and gold results (News Release, May 5, 2011). Highlighted trench results at the Jesus Maria target returned 22m at 1.08 g/t Au, 224 g/t Ag, 2.5% Pb, and 1.7% Zn. These results are encouraging for Riverside as this trench is above the Jesus Maria drill target and along strike from previous mining. A second interval of 8.3m returned 1.68 g/t Au, 144 g/t Ag, 2.4% Pb and 2.2% Zn along strike showing further surface mineralization that will be tested by near term drill testing. The work at Jesus Maria reported gold values ranging from 1.4 meters returning greater than 1g/t Au. The silver values from the vein system at Jesus Maria were also very encouraging with results ranging from 7.8g/t to 572g/t, including 19 of the 34 samples returning greater than 100g/t Ag.
The current exploration progress on and around this former Penoles mine has identified quartz-calcite-pyrite veins with barite and chlorite selvages and silver minerals, galena, sphalerite, and minor chalcopyrite of up to 3 meters in width which have been mined along more than 600 meters of strike length. A moderately strong IP conductor has been identified along the vein which is interpreted as a fault structure with multiple episodes of shearing and is a potential drill target. Vein jogs and bends may be the nucleus of a possible high grade ore body with potential mineralized shoots hosting silver mineralization. Assay results from dump and surface vein exposures samples on the Jesús María target exceeded 255 g/t Ag.
A trenching program and a single drill a single hole was drilled to test beneath the historic mine workings was completed in the fall of 2011 and encountered multiple zones of silver-gold with associated lead and zinc mineralization. The trenching outlined new mineralization along strike, and confirmed previous results, reported by Riverside. The trenching delineated aggregate mineralized zones up to 20 meters in thickness (Trench 2). Six new trenches were completed by Sierra Madre to bedrock and identified high grade mineralized intervals up to 13.4 meters in width (Trench 4) averaging 1.7 g/t gold, 309 g/t silver, 2.4% lead and 0.6% zinc (including a 6.9 meter interval that averaged 3.1 g/t gold, 552 g/t silver 4.6% lead and 0.6% zinc).
The single drill hole that was completed below the historic mine workings at Jesus Maria encountered the highest individual silver value in this current program (1,757.7 g/t silver from a 0.2 meter wide interval) as well as intersecting three, mineralized intervals with an aggregate thickness of 8.5 meters. The first interval from 156.95 to 159.95 averaged 0.5 g/t gold, 209 g/t silver, 0.6% lead and 0.9% zinc. The second interval from 165.40 to 168.25 averaged 0.2 g/t gold, 86 g/t silver, 1.3% lead and 2.2% zinc and the third interval from 192.40 to 195.05 averaged 0.1 g/t gold, 91 g/t silver, 2.2% lead and 1.9% zinc. The 8.5 meter aggregate assay averaged 0.3 g/t gold, 131 g/t silver, 1.3% lead and 1.6% zinc. A summarized table can be found below under Drill Results.
San Rafael
The San Rafael vein system strikes east to west and contains several historical mining sites. It includes a major shaft exceeding 100 meters depth and an abandoned mill site at the centre of the vein system. The San Rafael vein was also historically mined by Compania Minera Industrias Penoles producing grades ranging from 300 to 1000 g/t Ag. Recent chip sampling by Riverside returned over 180 g/t Ag in various samples and has identified potential drill targets along the vein, particularly in structural flexures and wider quartz-sulfide shoots. The vein structures appear to have no known drilling although there are open stopes indicative of historical production.
A trenching program has been completed at the San Rafael vein system returned gold-silver-lead-zinc (Au-Ag-Pb-Zn) values and alteration with relative shallow mineralization textures that are consistent with an upper level for a vein system interpretation. This could indicate that higher grades could be found at depth and indeed they have been mined from the San Rafael structure. San Rafael trenching returned 9.4m at 0.25 g/t Au. Several intervals from the trenching program returned zones of gold mineralization surrounded by widespread haloes with trace element mercury, antimony and arsenic along with anomalous values of lead and zinc. These geochemistry results are favorable indications for the possibility that a preserved mineralized zone could be present at depth.
Highlight Summary of El Capitan 2012 Drill Results
Summary of Jesus Maria 2011 Trenching and Drill Results
Highlighted Results from Summer 2011 Drill Program
Highlighted Results from 2011, 2008 and 2004 Drill Programs
Under the terms of the Option Agreement, to earn a 51% interest in the Peñoles Project Sierra Madre will be required to make a firm commitment of another $500,000 in exploration expenditures before March 31, 2013, make a $400,000 payment (firm commitment) on March 31, 2013 (payable in cash or shares at Sierra Madre’s election - share payments based on the 20 day VWAP). To keep the option in good standing Sierra Madre will make a $1,250,000 cash payment to Riverside on June 30, 2013, incur an additional $750,000 in exploration expenditures by September 30, 2013, make a $100,000 cash payment to Riverside on December 31, 2013 and make a final payment of $1,500,000 to Riverside on December 31, 2013 (payable in cash or shares at Sierra Madre’s election – share payments based on the 20 day VWAP and subject to TSXV approval). The $500,000 in expenditures and the $400,000 payment due by March 31, 2013 are firm obligations.
- Jesus Maria Diagrams:
- San Rafael Diagrams:
