Guadalupe de los Reyes, MEXICO
Guadalupe de los Reyes is a gold and silver project comprised of 6,302 hectares and located in the Sierra Madre Range in Sinaloa, Mexico. This historic mining district, dating back to 1772, has produced over 600,000 ounces of gold and 40 million ounces of silver.
The project is currently 100% owned by Vista Gold Corp. On January 16, 2014 Cangold announced a signed Letter of Intent whereby Cangold will be granted an option to acquire from Vista up to a 100% interest (subject to certain underlying royalties) in the mining rights to the Guadalupe de los Reyes Project.
The historic workings at Guadalupe de los Reyes occur in a low sulfidation vein system that extends over one kilometer in strike length and at least 400 metres down dip with open mineralization and the potential for higher gold and silver grades at depth.
A Preliminary Economic Assessment (“PEA”) carried out on the project by Tetra Tech for Vista in 2013 estimated an Indicated resource of 6.8 million tonnes at a grade of 1.73g/t gold and 28.71g/t silver (380,100 oz gold and 6,315,300 oz silver) as well as an Inferred resource of 3.2 million tonnes at a grade of 1.49g/t gold and 34.87g/t silver (155,200 oz gold and 3,639,000 oz silver). Cangold is considering the resource in the PEA to be a historical estimate as Cangold's qualified person has not done sufficient work to classify the estimate as a current mineral resource for Cangold, as per NI 43-101 requirements. (Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. A copy of this report is available on SEDAR under Vista’s profile.)
The 2013 PEA envisaged an open pit operation, while Cangold is considering a combined open pit and underground approach with a higher grade. Following the signing of a formal Option Agreement, the Company plans to undertake a complete review of all previous work, conduct additional baseline studies, diamond drilling, and advance the project to the pre-feasibility stage.
Terms of the option call for Cangold to pay to Vista a total of US$5,000,000 in staged payments over three years (a total of $1,000,000 in the first year) in order to acquire a 70% interest in the project. Cangold may then purchase the additional 30% by making a positive production decision and paying to Vista US$3,000,000 plus an escalator payment based upon the price of gold and the number of NI 43-101 Measured and Indicated gold equivalent ounces over and above those in the March 2013 PEA, at the time of the decision. Should Cangold elect not to place the project into production, Vista will have the option to buy back the original 70% for US$5,000,000 plus a similar escalator payment.
Initial fieldwork on Cangold Ltd.'s Guadalupe de los Reyes (GDLR) gold-silver project in Sinaloa state, Mexico, has returned high-grade gold and silver assays. Cangold geologists are focusing on detailed geological mapping, trenching, and rock sampling in order to further define the numerous mineralized structures on the property (click here to see map).
The Phase 1 program commenced along the southern extension of the Zapote zone, with some excellent results, including 6.0m of 2.66g/t gold and 218g/t silver, 2.5m of 2.51g/t gold and 622 g/t silver, and 3.0m of 1.25g/t gold and 164g/t silver. Elsewhere, sampling of the Zapote zone returned values such as 15m of 6.12g/t gold and 23g/t silver and 34m of 1.63g/t gold and 13g/t silver, from areas of previous drilling and historic mining. The southeastern extension of the Zapote zone was followed intermittently to connect with the Tahonitas zone, revealing several hundred metres of previously untested vein material that will be further mapped and sampled.
"This is an excellent start to our field work on the GDLR property", stated Robert Archer, President & CEO. "The Zapote Zone was already the highest priority and best defined target, with an Indicated Resource Estimate of 3,905,000 tonnes at 1.65g/t gold and 16.52g/t silver (207,200 oz gold and 2,074,400 oz silver). These recent results highlight the potential to increase the grade and further extend the known mineralization."
To date, assays have been received for 120 channel and grab samples taken in the Phase 1 program - 52 from Zapote, 21 from Tahonitas, 12 from Mariposa, and 35 from various nearby alteration/structures. Individual assay results range from Nil to 18g/t gold (10% greater than 4g/t gold) and Nil to 622g/t silver (10% greater than 50g/t silver). An additional 165 samples from Zapote North and South, San Miguel, and Guadalupe are in the laboratory with results anticipated by month end.
The Zapote zone is more than one kilometre in strike length and typically five metres thick with certain 'blow out' areas to 30 metres. It strikes NNW with a moderate southwest dip and consists of quartz breccia with silicified clasts of volcanic host rocks bordered by strong silicification and quartz stockworks. Gold and silver values are closely associated with pale green quartz with a bladed texture in both the breccia and stockwork.
Sampling along the Tahonitas zone, approximately 300 metres along strike to the southeast of Zapote, returned mostly modest values within the quartz breccia. Results were highlighted by 3m of 3.69g/t gold and 40g/t silver indicating that higher grade mineralization does exist.
The Mariposa structure varies between three and 30 metres in thickness and is more than one kilometre long extending to the northwest from the junction with Zapote. Vein material displays the same characteristics of gold-silver mineralized material at the Zapote zone, namely green coloured quartz and associated bladed textures. There has been minor development of the vein on three levels of historic workings and, in 1994, 10,000 tonnes grading 5.2g/t Au were reportedly mined, according to government records. More recent work includes a single drill hole which cut 3.1m of 4.0g/t gold and 25g/t silver. Initial surface sampling on the Mariposa zone returned lower grades such as 12.15m grading 0.44g/t gold and 4g/t silver, potentially being higher in the epithermal system. The extent of the underground workings is unknown but the Company plans to clean out and resample as much as possible in advance of further drilling.
Phase 1 field work is continuing, with detailed geological mapping and sampling of high priority targets (Zapote, Mariposa, Guadalupe, San Miguel / Las Primas, and Noche Buena zones). The goals of the program are to 1) better understand the characteristics of the zones that will be drilled for further definition of their mineral resource estimates leading into a pre-feasibility study, 2) to enlarge known mineralized zones, and 3) to aid in vectoring for "blind" targets for drill testing. Due to tilting of the epithermal system and some extreme elevation changes, surface sampling may actually be above the vertical interval hosting the best epithermal gold-silver mineralization.
The Guadalupe de los Reyes Project comprises 6,302 hectares, and covers a past-producing district dating back to 1772. A Technical Report and Mineral Resource Estimate carried out on the project by Tetra Tech in 2013 were re-issued for Cangold on May 20, 2014. The resource comprises 6.8 million tonnes at a grade of 1.73g/t gold and 28.71g/t silver (380,100 oz gold and 6,315,300 oz silver) in the Indicated category and 3.2 million tonnes at a grade of 1.49g/t gold and 34.87g/t silver (155,200 oz gold and 3,639,000 oz silver) in the Inferred category, all at a cut-off grade of 0.50g gold per tonne.
Diamond drilling by Vista Gold Corp. ("Vista") in 2012 demonstrated both bulk tonnage potential for the GDLR project, as well as high grade gold-silver mineralization originally exploited in the 18th and 19th centuries. One example that demonstrates the locally high grade nature of the mineralization came from the San Miguel zone where Vista drill-hole 12SM-08 intersected 4.0 metres of 12.69 g/t gold and 348 g/t silver and Cangold re-assays returned 13.02 g/t gold and 403 g/t silver over the same 4.0 metres.
As announced on April 15, 2014, the Company signed a formal agreement whereby Cangold has been granted an option to acquire from Vista, up to a 100% interest (subject to certain underlying royalties) in the mining rights to the Guadalupe de los Reyes Gold-Silver Project. The Company received formal approval for the transaction and concurrent financing from the TSX Venture Exchange on July 23, 2014.
Robert Brown, P. Eng., Director and VP Exploration for Cangold is the Qualified Person for the Company. He has reviewed the technical information referenced above and has approved this news release. The Company's QA/QC program includes the regular insertion of blanks, duplicates and standards into the sample shipments.