Penoles Project
- Introduction:
- Commodity:Gold, Silver
- Location:Durango, Mexico
- Size:350 km²
- Option:Optioned to Sierra Madre Developments Inc.
- Status:Currently drilling 2,500 metres on El Capitan 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 and the El Capitan disseminated epithermal gold system. Riverside’s partner, Sierra Madre, has recently completed a total of 2,220 meters of HQ core drilling in 18 drill holes at the El Capitan target. Several of the drill holes encountered mineralized intervals with potentially economic grades in excess of 70 meters in thickness (See El Capitan section). The results of this recent program have advanced the project another step closer towards delineating a potential resource and the recently announced metallurgy was also favorable with greater than 60% leachable gold results. (News Release, Oct 24, 2011)
A recent soil sampling program returned assay results including greater than 1 g/t gold in soils from a detailed program designed to assess potential western extensions of the El Capitan oxide gold zone. Additional drill testing at El Capitan is underway with an anticipated 2,500 m drill program.
The drill program completed by Sierra Madre Developments in October 2011 shows positive drill results on the Capitan target including 33.50 metres of 1.7 g/t gold (CDDH-11-17) and 33.85 metres of 1.4 g/t gold (CDDH-11-18) which are some of the best drill results ever reported from the Penoles Project in Durango, Mexico.
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 now 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 2011and 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 Jesus Maria 2011 Trenching and Drill Results
Highlighted Results from Summer 2011 Drill Program
Highlighted Results from 2011, 2008 and 2004 Drill Programs
Riverside and Sierra Madre Developments Inc. (TSX-V: SMG) have signed a binding letter of agreement to jointly develop the Penoles Property in March 2011.In order to exercise the Initial Option Sierra Madre must issue Riverside an aggregate 4,500,000 Sierra shares at a minimum value of $0.50 per share, make total cash payments of $2,850,000 to Riverside and underlying concession holders, and incur an aggregate $3,000,000 in exploration expenditures on the Peñoles Property within 24 months of the agreement. Upon the completion of this Initial Option, Sierra Madre will control a 51% interest in the Property.
- Jesus Maria Diagrams:
- San Rafael Diagrams:
