Corporate Profile
Introduction
Latin Gold Limited ("Latin Gold") is a public company listed on the Australian Stock Exchange. Latin Gold listed on 6 June 2001 and has offices in Perth, Western Australia and Lima, Peru.
Latin Gold is a junior exploration company focused on exploration, primarily for gold but also for base metals, in South America. Latin Gold's assets include the Paron Gold Project, which it has an option to purchase 100% of between now and August 2007 and 100% of the Coyhaique gold project in Southern Chile.
Latin Gold's corporate office is in Perth, Western Australia. Head Office-Operations is in Lima, Peru where Executive Director-Operations Mr. Simon Titchener resides, along with our exploration team headed up by Gonzalo Lemuz. Latin Gold have also established a field office at the Paron gold project in the Ancash Department near the town of Cadaz, 448 km's north east of Lima.
Latin Gold continue's to see opportunity for considerable growth in shareholder value by identifying opportunities in Latin America. Unlike the mature Australian resources/exploration market, Latin America provides exploration opportunities for projects the size and potential that would not be available to juniors in Australia.
An example is the Paron gold project where Latin Gold have secured an option over the project for consideration of an option payment of US$1.7 million, staged over 16 months with the final payment due in August 2007, as well as the option to purchase the NSR that Barrick Gold have over this project for an additional US$200,000 prior to decision to mine. This project has an existing non JORC resource of between 200,000 and 250,000 ounces Au grading approximately 3 g/t with Ag credits of + 8 g/t. , which equates to Us$9.50/ ounce under the current base case non JORC resource estimate.
2. Projects
2.1 Paron Gold Project- Ancash Department Peru.
The Project
Based on estimations completed in 1994 and 1996, the Paron gold project has an existing non JORC resource of between 200,000 and 250,000 ounces grading around 3 g/t Au with Ag credits of + 8 g/t.
Latin Gold have an option to purchase 100% of the project, including a royalty, with total payments of US$1.9 million over a 16 month period with the final payment due in August 2007.
Location and Access
The Paron project is located in north-central Peru in the department of Ancash, approximately 16km east of the town of Caraz.
It is located 40 km to the north and 120 km south respectively of Barrick Gold's ("Barrick") Pierina (210 MT @ at 1.1 g/t for 7.5 million ounces) and Alto Chicama/Lagunas Norte (255 MT @ 1.1 g/t for 9.1 million ounces) gold mines.
Access to the project is via 448kms of paved highway from Lima to Caraz. From Caraz to Paron the road is unsealed but suitable for 2 wheel drive vehicles.
Latin Gold are currently employing a work crew to undertake manual improvements to this track.
Physiography and Climate
Paron lies on the western flank of the Cordillera Blanca at around 3,200 metres. The town of Caraz is situated at 2,500 metres.
In the project area topography is steep with hillsides between 38-45 degrees in gradient. The local vegetation consists of brush and cactus, which is indicative of a semi-arid environment.
The rainy season, which extends from November through to April, is not severe enough to restrict exploration and potential mining activities.
Exploration History
Paron has over 100 small artisanal pits and short tunnels (adits) up to 15 metres in length distributed over the prospect area. There is at least one additional adit of more substantial length which has caved but will be re-opened by Latin Gold if possible.
Local knowledge suggests that much of this artisanal work began with Portuguese miners in the 1600's and continued to the late 1890's.
No production records are available but production is assumed to be small and was concentrated on the exploitation of high grade pockets of gold mineralisation.
Between 1994 and 1996 Paron was explored by Compania Acuarios Minera y Exploradora who completed regional and prospect sampling, reopened some of the historic adits, developed 3 new adits and completed 7 diamond drill holes in 1994 and 55 diamond holes in 1995.
Some metallurgical test works was also completed, and show that the ore leaches in conventional circuits with recoveries of +88% in fresh rock.
In 2000 Compania Minera Barrick (Barrick) reviewed the project area.
Regional Geology
Paron is contained within a northwest trending belt of complexly folded and faulted, Late Mesozoic marine sediments intruded by Tertiary batholithic rocks of granodioritic composition. The oldest rocks in the region are Cretaceous quartzites, shales, and minor coal seams.
The Paron mineralisation is hosted by a batholith of monzo-granitic composition, and the emplacement of this batholith has been structurally controlled with intense mylonitic textures adjacent to the faulted contacts.
The faulting at Paron is thought to have provided the conduit for the hydrothermal mineralising solutions. This is supported by additional gold bearing systems located northwest and southeast of Paron.
Prospect Geology and Mineralisation
The Paron gold resource lies on the side of a 38-42 degree dipping hillside which reflects a low angle normal fault. This fault zone has been intersected by drilling at the base of the scarp where it consists of a heavily gouged zone some 15 metres thick.
The mineralisation at Paron is low sulphidation epithermal with alteration characterised by multi-stage silicification and chalcedonic to cryptocrystalline quartz veining and sericitisation of the monzonite host. Silica crackle breccias and microbreccias which are also characteristic of epithermal gold systems occour throughout the project area. The alteration is tabular in shape and extends over an area 550 metres long with widths ranging between 80 and 350 metres. The thickness ranges from 2 metres to greater than 40 metres.
The quartz sericite alteration hosts the ore grade gold intersections. Where the alteration assemblage grades to quartz-sericite-chlorite and then chlorite-hematite, the grades of mineralisation decrease significantly and range between 10ppb and 500ppb.
The mineralised area contains up to 5% pyrite with lesser amounts of sphalerite and occasional chalcopyrite. The gold mineralisation however appears to post date the sulphide mineralisation as photomicrograph studies indicate the gold is contained as sub-micron particles along fractures within the pyrite. This is further supported by metallurgical test work which indicates that the gold is readily leachable, regardless of the sulphide content.
Providing a significant control for mineralisation is northeast fracturing. These fractures appeared to have been followed by the artisanal miners in search for higher grade pockets where oblique structures meet.
Exploration Upside
By modern standards Paron is relatively under explored. Whilst the work completed to date has probably outlined to a reasonable degree the boundaries of the outcropping mineralised zone no work appears to have been carried out to test for upside relating to faulted continuations or indeed or repetitions at depth within the hanging wall.
In addition no exploration has been carried out to explore for what is expected to be a significant hydrothermal pipe proximal to the Paron mineralisation.
These targets alone justify a significant exploration effort.
- Fault Extension Target
- Depth (Splay Fault) Extensions
- Hydrothermal Pipe
The western extent of the Paron mineralisation is truncated by a normal fault. Although the throw of this fault is not known, exploration to test for the possible down faulted extension within the footwall block is regarded as an easily explored target with significant upside. An exploration analogy is Porgera.
Drilling for this target will be carried out at the base of the scarp with a series of vertical and angle holes stepping back west and drilled easterly to intersect the fault.
At the same time drilling from the base of the scarp will be drilled to the east to test for potential repetitions of the Paron zone within the hanging wall and contained within splay faults off the main fault.
A secondary target of this drill programme will be the testing of the grade and westerly extent of the colluvium/alluvium mineralised zone.
There has been limited drilling through the alteration zone to test for repeats of the mineralised zones at depth. Epithermal systems can often show sub parallel repetitions at depth, and in the case of Paron this presents a very attractive target as the known alteration is sub tabular and influenced by micro and macro fracturing with a significant fault the likely conduit for the mineralising fluids.
A drilling programme to test the monzonite at depth (+200 metres) beneath the central and lower grade western zone will be an initial priority.
No exploration has yet been carried out to explore for the pipe providing the mineralisation. This is a secondary target as it will require information from the alteration mapping, planned drilling, and possible geophysics in order to narrow the possible target sites.
The following is an update on progress of the Paron exploration programme as at 31 July;
- Exploration office and camp established on site.
- Access agreement with local communidad completed.
- Suitable areas for infrastructure (leachpads, plant etc) have been applied for.
- Topological, alteration and detailed geological mapping has been completed.
- An extensive sampling programme of surface soils, rock chips and existing adits and tunnels has commenced.
- Drilling permitting is progressing with the first drilling campaign scheduled to commence in October 2006.
- Drilling contract to be finalised and signed this week.
- Digitising of the historic drill information and preparation of a 3 D model of the mineralised zone has commenced.
- Old drill core re-logged and sampled.
2.2 Coyhaique Gold Project- Region XI, Chile
The Patagonia Project encompasses a large precious metals target with district-scale dimensions and excellent potential to identify economic Au-Ag resources.
The project is located 15 kilometres to the east of Coyhaique in Region XI of southern Chile. Access and infrastructure are excellent.
Latin Gold have a 100% interest in the project. It consists of 69 contiguous mineral concessions covering 19,690 hectares within an area 30 kilometres long by 4 to 12 kilometres wide.
Seventeen extensive zones of Au-Ag mineralization have been identified to date within the property. They comprise classic low-sulphidation epithermal vein, breccia and stockwork systems ranging in strike length from 500 metres to several kilometres.
In common with well-known examples of this style of deposit around the world, the mineralization at the Patagonia Project exhibits complex multi-stage vein and breccia paragenesis, colloform and crustiform banding of chalcedonic, saccharoidal and fine comb quartz, and adularia. Gold and silver occur as the native metals, electrum, and as silver sulphides and sulphosalts. Outcrops and core show ample textural and mineralogical evidence for both fluid boiling and for magmatic/meteoric fluid mixing as mechanisms for gold and silver deposition.
The deposits exhibit strong structural control and are hosted by a thick sequence of felsic pyroclastics within the setting comprising an inferred collapse caldera and rhyolite flow domes.
The project is located along the northwestern margin of the Deseado Massif, a broad volcanic plateau occupying a large area of the Province of Santa Cruz in neighboring Argentina. The Deseado Massif is host to numerous low-sulphidation epithermal Au-Ag deposits. The most important deposits discovered to date include AngloGold's Cerro Vanguardia Mine (13 Mt @ 8.88 g/t Au and 106 g/t Ag), and Manantial Espejo (4.4 Mt @ 4.51 g/t Au and 264 g/t Ag), an advanced project currently being explored by Silver Standard.
Meridian Gold's Esquel Project (15.6 Mt @ 7.16 g/t Au and 12.8 g/t Ag) is located 300 kilometres to the north of the Patagonia Project, and Coeur d'Alene's Fachinal (4.1 Mt @ 2.37 g/t Au and 110 g/t Ag) and Cerro Bayo (660,000 gold equivalent oz) Mines are located about 100 kilometres to the south. The setting and style of mineralization in these deposits is very similar to that observed at the Patagonia Project.
Preliminary exploration over two field seasons by Homestake in the early 1990's very effectively outlined the broad potential of the property. However, the necessary detailed evaluation of the known targets was never carried out despite the presence of economic grades and widths of mineralization.
The known target zones were traced over extensive areas by reconnaissance mapping and outcrop sampling. They were further defined by limited hand- and backhoe-trenching and a preliminary phase of exploratory drilling. In retrospect, it is considered that this drilling was undertaken prematurely given the scope of the project. The holes were distributed throughout 8 large zones within which the target geology was not sufficiently understood at the time.
Subsequent work by Aur Resources over a single field season in the mid-1990's resulted in the acquisition of a large airborne geophysical database. It is considered that this information was under-utilized by Aur but will be very useful for future target identification. Aur carried out a moderate amount of drilling, but it was mainly directed at MMI (mobile metal ion) soil anomalies, whose reliability is suspect. Though the Aur Resources program did yield an economically significant drill intersection, this work did little to enhance the geological understanding of the mineralization and it's setting.
As a result of this exploration, Bonanza-style vein mineralization yielded spectacular surface assays ranging up to 426 g/t Au and 5,560 g/t Ag. Stockwork zones returned surface grades of up to 56 g/t Au and 50 g/t Ag. The better drill intersections from Homestake and Aur's drilling program included 1.30 metres @ 19.6 g/t Au and 27 g/t Ag in one of the vein systems, and 5.05 metres @ 6.19 g/t Au and 6.3 g/t Ag, and 9.76 metres @ 2.92 g/t Au in stockwork zones.
Patagonia Gold have explored the property under joint venture for the past 16 months (September 2003 until December 2004), which included a reverse circulation drilling campaign that commenced in December 2003. This campaign was originally intended to be a 10,000 metre program combining a mixture of reverse circulation and diamond drilling. A total of 81 RC holes for 5,299 metres was completed which tested 5 of the 17 mineralised zones that had been discovered on the 19,690 metre property. Significant drill-hole intersections included the following;
| Valenzuela Vein | ||||
| Drill Hole | From (metres) |
Intersection (metres) | Gold g/t |
Silver g/t |
| RC-89 | 112 | 1 | 12.50 | 20.5 |
| Violeta Vein | ||||
| RC-103 | 9 | 9 | 3.9 | 29.1 |
| RC-105 | 7 | 5 | 2.63 | 20.1 |
| RC-106 | 21 | 4 | 2.97 | 16.6 |
| RC-110 | 23 | 5 | 2.36 | 34.8 |
| RC-112 | 15 | 3 | 3.87 | 17 |
| Adriana Vein | ||||
| RC-122 | 125 | 3 | 8.05 | 35.6 |
| RC-48 | 25 | 3 | 3.7 | 25.6 |
| RC-49 | 18 | 3 | 3.5 | 33.9 |
| RC-57 | 12 | 3 | 3.8 | 26.5 |
| RC-58 | 9 | 9 | 3.2 | 20.9 |
| RC-59 | 15 | 4 | 2.8 | 40.8 |
| RC-60 | 6 | 8 | 3.0 | 34.1 |
| RC-72 | 35 | 3 | 5.6 | 73.6 |
| RC-75 | 7 | 3 | 4.2 | 12.9 |
| The Ridge | ||||
| RC-63 | 118 | 8 | 1.5 | 2.9 |
Patagonia Gold's target at Coyhaique was to identify a substantial near surface economic gold deposit. In their opinion, results did not provide them with sufficient confidence that the Coyhaique project will meet this criterion.
Latin Gold Directors, although disappointed at Patagonia's decision not to continue with the joint venture, believe that the property continues to have potential to produce an economic deposit, albeit possibly of a different geological model than that targeted by Patagonia Gold. This is based on the size of the exploration area, the large number of targets that have yet to be drill tested and the fact that exploration has indicated the presence of ore grade shoots that remain open at depth.
The project sits at low elevation in an area of subdued topography. At least 90% of the property area is covered by shallow overburden and vegetation. The potential for discovery of hidden deposits is therefore considered to be excellent.
In summary, the Directors of Latin Gold remain confident about the potential of the project, but due to exploration commitments in Peru are looking to find a new joint venture partner to continue exploration of the property.
