De Grey Argentina S.A. (DEGA) has entered into an option-to-purchase agreement with Minera Sudamericana SA (MSA) over nine project areas covering a total of 1,390 sq km.
MSA is a private Argentine company headed by experienced geologists who pegged the properties in 2008 and 2009 after undertaking a targeting study using regional aeromagnetic data and Aster imagery.
The option agreement comprises two stages, an exploration stage and a project acquisition stage. During the exploration stage, De Grey pays US$15,000 per quarter for exclusive rights to conduct exploration, excluding drilling, on the MSA properties for up to three years.
At any time during the three year exploration stage, De Grey can elect to enter into a purchase agreement for any one or more projects (a project being one or more contiguous properties). Purchase of a project requires a series of escalating payments over up to three years.
MSA has conducted only limited field reconnaissance on some of the properties but their rapid discovery of a Au-Ag mineralised, siliceous vein breccia at the Sierra Morena project supports the targeting approach.
Also after only brief field reconnaissance, MSA located banded, epithermal vein quartz at the Tres Cerros project. Limited rock chip sampling returned elevated signature elements (arsenic and mercury) but no anomalous gold or silver. The assays are not regarded as discouraging since the vein textures indicate exposure at a high level in the hydrothermal system.
In the 2010-2011 summer field season De Grey undertook reconnaissance over seven of the nine MSA projects, following which the Sierra Morena Project was selected as highest priority.
One of several outcrops of siliceous breccias in Chon Aike volcanics at Sierra Morena project
Colloform banded quartz vein at Tres Cerros project, interpreted to be exposed
at a high level in the vein system
Sierra Morena Project
Sierra Morena comprises two cateos (exploration licences) covering an area of 140 sq km in the western Deseado Massif. The property is located approximately 25km west of Patagonia Gold’s El Tranquilo project (combined resources of 567,000 oz Au and 19.5Moz Ag).
Sierra Morena features a siliceous vein breccias that sub-crops over approximately one kilometer strike. Rock chip samples have returned values up to 0.69g/t Au and 20g/t Ag, along with anomalous pathfinder elements such as arsenic, antimony and mercury. Vein textures and metal ratios suggest exposure at a high level in the epithermal system.
During the 2010-2011 field season, De Grey completed a program of grid soil geochemistry over the vein breccia and surrounding area that confirmed conituity of the anomalous geochemistry between vein exposures and located a possible second, parallel mineralized zone located some 600 metres to the north.
A project-wide stream sediment sampling campaign was also completed, with results highlighting several areas of significant anomalism for follow-up, including an area of opaline silica vein float adjacent to an interpreted NW-striking structure.
Exploration proposed for the 2011-2012 field campaign will follow-up soil and stream geochemical anomalies with a view to first-pass drill testing during the summer field season.
Sierra Morena 2010-2011 stream sediment results, Santa Cruz, Argentina