Centenera Mining has entered into a binding Letter of Intent (LOI) with an arm's length vendor whereby it has been granted the exclusive option to acquire a 100% interest in the Huachi Copper-Gold Porphyry Deposit in Argentina.
The Project is located in the Province of San Juan in northwest Argentina and consists of 32 mining claims ("Minas") totalling 462 hectares.
The Project consists of a central copper-gold porphyry deposit with a peripheral epithermal gold system located to the east. Centenera will initially focus on exploration of the copper-gold porphyry deposit and the extensive open ground to the west, targeting a large-scale, bulk-tonnage copper-gold porphyry deposit. The copper-gold porphyry deposit has been tested with a total of 7 historical diamond drill holes (totalling 2,011 meters)
- All drillholes targeting porphyry style mineralization intersected copper-gold mineralization.
- Majority of drillholes terminated in mineralization and are open at depth.
- Several drillholes demonstrate increasing grade with depth.
- Mineralization is open in all directions, in particular to the west and north where porphyry style alteration is mapped at surface and untested by drilling.
"The acquisition of the Huachi copper-gold deposit has been a long-term objective for Centenera and we are delighted to have reached mutually acceptable terms with the underlying owners. Historical drilling has already defined part of the porphyry system and this work really helps to reduce exploration risk for Centenera shareholders," stated Keith Henderson, Centenera's President and CEO. "Porphyry deposits in Argentina have a history of creating value for shareholders and we believe that our planned drilling could help create similar value."
Plan Going Forward
Subject to satisfactory completion of due diligence by the Company and acceptance of filing of the grant of the Option by the TSX Venture Exchange (the "TSXV"), Centenera and the Vendor will enter into and execute a definitive property option agreement (the "Option Agreement"). The Company has retained Discovery Consultants to complete a National Instrument 43-101 Technical Report for the Project, which will be completed within 45 days. No additional exploration is necessary before drilling and the Company's exploration manager is working to finalize drill targets, project logistics and drill permits.
The Huachi copper-gold mineralization is associated with a porphyry-epithermal system with extensive multiphase quartz-stockwork development. Porphyry style alteration is within probable late Miocene intermediate to felsic stocks and dykes of the Huachi intrusive complex. Alteration consists of a central potassium silicate alteration zone characterized by pervasive groundmass replacement with local secondary biotite. This pervasive and intense alteration is clearly visible in satellite imagery as a pale colour anomaly. Additionally, there are narrow structurally controlled silicification zones within the central part of the system that are often associated with quartz-sericite-pyrite altered porphyry dykes. Additionally, early formed, pervasive secondary biotite is extensively developed within the alteration halo.
Historical exploration work on the property identified porphyry style copper mineralization which is best developed around two intrusive stocks: the Canyon stock, and the Oro Rico stock. Both stocks have mineralization at surface consisting of chalcopyrite, accompanied by disseminated magnetite, minor pyrite, and local sparse bornite and molybdenum. Additionally, a large 1,400m by 850m elongate >3% pyrite halo overlies the prospect suggesting significant porphyry mineralization may remain untested under cover.
The Huachi property is located in San Juan Province in northwestern Argentina (Figure 2), 135km due north of the city of San Juan. The Project consists of 32 Minas totalling 462 hectares. Associated with the Project are 10 demacias, which under Argentinean mining legislation, are defined as areas that are too small to be issued as separate claims and that are surrounded by existing claims. Once applications for the demacias have been finalized they will be incorporated into the Project, which together with 10 demasias, will total 516 hectares. Elevations at Huachi range from 2800 to 3250 meters above sea level and the Project is accessible by road, although some additional road development will be necessary on the property. Exploration can be conducted year-round.
Under the Option, Centenera has the right to earn a 100% interest in the Project through the payment of USD $2,306,000 and the issuance of common shares in the Company valued at USD $500,000 (at the time of issuance) to the Vendor,
Historical exploration includes detailed geological and alteration mapping, surface rock sampling, a geophysical induced polarization survey to the west of known mineralization as well as 20 diamond drillholes (totalling 6,640 meters). Historical drilling in 2006-2007 consisted of 11 drillholes for 2,552 metres. Drilling was focussed on testing copper-gold porphyry mineralization (7 drillholes, Plate 1) with an initial test for epithermal gold mineralization (2 drillholes) and two drillholes were abandoned due to poor rock conditions. Later drilling from 2011to 2012 consisted of 9 drillholes for 4,088 metres and was focussed exclusively on exploration within the peripheral epithermal gold system.
Upon completion of the Option payments and share issuances, Centenera will be deemed to have exercised the Option and will have earned an undivided 100% legal and beneficial interest in and to the Project, subject to a 2% Net Smelter Royalty ("NSR") to be granted to the Vendor. Centenera will have a right to buy back 0.5% of the NSR for USD $1,000,000, at which time the NSR payable to the Vendor shall be 1.5%. A finder's fee in the amount of USD $200,000, payable in shares, is payable by Centenera in connection with the acquisition of the Project.
During the Option period, Centenera will be responsible for maintaining the exploration concession and permits comprising the Project in good standing, and paying all fees and assessments, and taking such other steps, required in order to do so. There will be no other work commitments, and any work carried out on the Project will be at the sole discretion of Centenera.
Quality Assurance / Quality Control
The Huachi copper-gold porphyry drill testing was undertaken by Cardero Resource Corp. from 2006 to 2007. On site personnel at the project rigorously collected and tracked samples, which were then sealed and shipped to ALS Chemex for analysis. ALS Chemex's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025: 1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control was further assured by the use of international and in-house standards. Blind certified reference material was inserted at regular intervals into the sample sequence by Cardero personnel in order to independently assess analytical accuracy. Finally, representative blind duplicate samples were forwarded to ALS Chemex and an ISO compliant third party laboratory for additional quality control.
Drill testing of the epithermal gold system was undertaken by Kestrel Gold Inc. from 2011 to 2012. Diamond drill core was submitted to Alex Stewart Assayers Argentina S.A. in Mendoza, Argentina; an ISO 9000-2000 accredited laboratory. Gold and silver results were determined using standard fire assay techniques on a 30 gram sample with a gravimetric finish for gold and silver. In addition to this, ICP-AR (Aqua Regia digestion) analysis was performed on 38 elements. QA/QC performed by Kestrel included the collection of core duplicate samples, coarse reject samples and the insertion of certified reference samples (standards) and blanks. UAKO Geological Consultants supervised and assessed the QA/QC procedures and data in compliance with National Instrument 43-101 requirements.