Peñoles Gold Silver Project
COMMODITY: Gold and Silver
LOCATION: Durango, Mexico
SIZE: 142 km²
OPTION: Available for partnership
The Peñoles Project includes two historic silver mines (Jesus Maria and San Rafael), an oxide gold prospect (referred to as El Capitan) and numerous exploration targets located in the historic Peñoles Mining District of Durango, Mexico. The Peñoles Project is host to multiple mineralized vein systems, fault zone structures, poly-metallic skarns, and silicified low-temperature gold-rich volcaniclastics. Approximately 86 diamond drill holes totalling more than 11,550 metres have now been completed at the Project. Drilling to date on the Peñoles property has defined significant intervals of near-surface silver mineralization (with associated gold, lead and zinc values) at Jesus Maria, and wide intervals of near-surface gold mineralization (with low silver values) at El Capitan that could potentially be amenable to open-pit extraction methods.
According to published historic records, Minera Industrias Peñoles was incorporated in 1887 to operate the Jesus Maria and San Rafael silver mines, and took its name from the local community of Peñoles. The full extent of the historic mine workings is unknown, but mining appears to have been selective and limited to within approximately 100 metres from the surface.
The only modern exploration work that was completed on the property prior to 2011 consisted of a four-hole drill program completed by Aurcana Corporation (“Aurcana”) in 2004, and surface mapping, sampling, a limited IP survey, and a five-hole drill program completed by Riverside in 2008 and 2009.
The drill holes completed by Aurcana and Riverside returned encouraging results and showed that El Capitan had potential to host a bulk-tonnage, low-grade gold deposit. Preliminary metallurgical tests completed by Sierra Madre in 2011 using Riverside drill core indicated that the gold mineralization at El Capitan could likely be recovered using cyanide leaching.
Since March 2011, exploration work and drilling funded by Riverside’s partner has primarily focused on the Jesus Maria Silver Zone and the El Capitan Gold Zone.
PAST PARTNER-FUNDED EXPLORATION RESULTS
The Peñoles project has an established (300k oz Au & 15M oz Ag) inferred resource, which remains open in multiple directions. Past partner-funded drilling, underground sampling and trenching at the historic Jesus Maria silver mine discovered high-grade Ag.
Highlighted drill results from previous campaign at Jesus Maria include:
· JM DDH 14-24: 7.15m at 988.43 g/t Ag & 1.24 g/t Au
· JM DDH 12-10: 4.25m at 732.24 g/t Ag & 1.2 g/t Au
· JM DDH 14-26: 3.00m at 573.8 g/t Ag & 0.29 g/t Au
· JM DDH 14-27: 18.7m at 203.92 g/t Ag & 0.65 g/t Au
*All intercepts above reported within first 150m from surface
Riverside’s previous JV partner failed to incur required exploration expenditures and the Company subsequently exercised its right to reacquire a 100% interest in the project. Riverside is currently exploring new partnership opportunities to grow the resource.
The Peñoles property lies in the Altiplano Sub province of the Sierra Madre Occidental (SMO). The SMO is a regionally extensive Eocene to Miocene volcanic field that extends from the US-Mexican border into Central Mexico. The Altiplano sub province is on the eastern flank of the SMO and comprises Jurassic to late Tertiary sedimentary and volcanic rocks (Sedlock et al., 1993). This district hosts extensive hydrothermal-related silver, gold and base-metal deposits and is generally referred to as the Faja de Plata, or Mexican Silver Belt.
The El Capitan deposit, the Jesus Maria deposit, and the San Rafael-El Tubo prospects of the Peñoles Project are located on the concessions owned by Riverside and they appear to be related to intersections between the northwest-striking and northeast-striking regional structures. These occurrences are also localized along the southern margins of a northeast-oriented magnetic anomaly identified from government airborne surveys.
During 2011 and 2012, drilling at El Capitan encountered numerous intervals of gold mineralization ranging from 50 m to 140 m wide. Mineralization is localized along the unconformity between Tertiary-age volcaniclastic rocks and Cretaceous-age sediments. The upper part of the mineralized zone consists of porous, volcanic agglomerate cut by narrow quartz veinlets and hydrothermal breccias (averaging 0.2 g/t to 0.5 g/t Au). At the base of the volcanic unit, there is a shallow-dipping, 10 m to 35 m wide silicified zone (averaging 0.7 g/t to 1.5 g/t Au), and, below this zone, there is a sequence of oxidized shales that is also cut by quartz veinlets and hydrothermal breccias (averaging 0.2 g/t to 0.6 g/t Au) with low silver values.
The Jesus Maria prospect was initially considered to be a relatively narrow but high-grade vein-type target; however, drilling carried out in 2013 and 2014 encountered 20 m to 80 m wide intervals of predominantly silver-rich mineralization (with accessory gold and base-metal values). Based on the widths of mineralization, the Jesus Maria might be amenable to open-pit extraction methods. At their eastern limits, the deposits are separated by approximately 300 m; however, the mineralized zones are interpreted as merging to the west. Additional drilling between the western limit of the Jesus Maria deposit and the El Capitan deposit could connect the two zones and delineate additional mineralization.
To date 86 holes have been drilled in the property.
The Mineral Resource statement for the El Capitan and Jesus Maria deposits is shown in Table 1.1; the resources are not constrained within pit shells but include mineralization, above cut-off, that is within a maximum depth of 150 m below surface. There are no adjustments for recovery or dilution in the statement of mineral resources. It is important to note that these are estimates of mineral resources, not mineral reserves, as the economic viability has not been demonstrated.