Don Roman 43-101 Report - Tara Gold Resources Corp.

Transcription

Delve Consultants, LLC.
Mineral Exploration and Development
TECHNICAL REPORT
DON ROMAN PROJECT
MUNICIPALITY OF CHOIX, SINALOA, MEXICO
Don Roman Photo
DCD 2009
Prepared for
TARA MINERALS CORP
July 18, 2009
Dana C. Durgin
AIPG Certified Professional Geologist #10364
2881 Fargo Way, Sparks, NV 89434 Tel/Fax 775-356-6121 diverdana@hotmail.com
1
TABLE OF CONTENTS
Section
Page
1.0 EXECUTIVE SUMMARY
1.1 Introduction
1.2 Geology and Mineralization
1.3 Exploration and Mining History
1.4 Drilling and Sampling
1.5 Metallurgical Testing and Mineral Processing
1.6 Mineral Resource Estimation
1.7 Interpretation and Conclusions
1.8 Recommendations
4
4
4
4
5
5
5
6
6
2.0
INTRODUCTION AND TERMS OF REFERENCE
7
3.0
DISCLAIMER
9
4.0
PROPERTY DESCRIPTION AND LOCATION
4.1. Location
4.2 Land Area
4.3 Surface Rights
9
9
9
11
5.0
ACCESS; CLIMATE; LOCAL RESOURCES; INFRASTRUCTURE;
AND PHYSIOGRAPHY
5.1 Access
5.2 Climate
5.3 Local Resources
5.4 Physiography
11
11
12
12
13
6.0
HISTORY
6.1 Recent Exploration History
13
13
7.0
GEOLOGIC SETTING
7.1 Regional Geology
7.2 Local Geology
14
14
15
8.0
DEPOSIT TYPES
18
9.0
MINERALIZATION
9.1 Don Roman Mineralization
9.2 Gold Mineralization
19
20
25
10.0 EXPLORATION
26
1
11.0 DRILLING
27
12.0 SAMPLING METHOD AND APPROACH
12.1 Sampling Summary
12.2 Prospecting Sampling Methods
12.3 Underground Channel Sampling
27
27
28
28
13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY
28
14.0 DATA VERIFICATION
29
15.0 ADJACENT PROPERTIES
29
16.0 MINERAL PROCESSING AND METALLURGICAL TESTING
16.1 Metallurgical Testing
16.2 Processing Plant Design
32
32
33
17.0 MINERAL RESOURCE ESTIMATE
17.1 Historic Resource Estimates
17.2 Current Resource Estimates
34
34
34
18.0 MINERAL RESERVE ESTIMATE
35
19.0 OTHER RELEVANT DATA AND INFORMATION
35
20.0 INTERPRETATIONS AND CONCLUSIONS
35
21.0 RECOMMENDATIONS
21.1 2009 Program and Budget
36
36
22.0 REFERENCES
38
23.0 DATE AND SIGNATURE PAGE
40
24.0 CERTIFICATE OF AUTHOR
41
2
LIST OF TABLES
Table
Table
Table
Table
Table
Table
Page
4.1
9.1
9.2
15.1
21.1
Don Roman Concession Data
Sampling Programs Average Values
Don Roman Recent Underground Sampling
Centenario Concession Group
Don Roman Project Budget for 2009
9
20
24
31
37
LIST OF FIGURES
Figure Number
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
Figure
4.1
4.2
5.2
7.1
7.2
7.3
7.4
8.0
9.1
9.2
9.3
9.4
9.5
9.6
9.7
15.1
15.2
16.1
Page
Don Roman Location Map
Don Roman Concession Map
View NW From Don Roman Portal
Regional Geology Don Roman Area
Local Geology Map
NE Dipping Bedding in Massive Limestone
Hypothetical Geologic Section
Metasomatic Skarn
Don Roman Mine Geology
Don Roman Mine Sections
Don Roman Mine Sampling Pb & Zn
Don Roman Mine Sampling Ag
Nearby Zn-Pb-Ag Showings
Don Felipe Vein
Don Felipe Mine Sampling
Sanaloya Concession Group
Centenario Vein in Mine Pillar
Processing Plant in Construction
10
11
12
15
16
17
18
19
22
22
23
23
25
25
26
30
30
33
3
1.0
EXECUTIVE SUMMARY
This technical report was prepared by Dana Durgin of Delve Consultants at the request of
American Metal Mining, S.A, de C.V., a Mexican subsidiary of Tara Minerals Corp, to
establish qualified value, to increase value and as a basis to track production progress and
what that means to their resource categories. The report was written in compliance with
disclosure and reporting requirements set forth in the Canadian Securities Administrators’
National Instrument 43-101, Companion Policy 43-101CP, and Form 43-101F1. The
Technical Report was authored by Dana C. Durgin in July 2009. No mineral reserves were
estimated. Mr. Durgin is a Qualified Person under Canadian Securities Administrators’
National Instrument 43-101. The author has independently investigated the data provided to
him by American Metal Mining, to the extent deemed necessary in his professional judgment
to be able to reasonably rely on this information.
1.1
Location
The Don Roman project is located northernmost Sinaloa, near the Chihuahua border in
northern Mexico, and is approximately 200 km by road east of the city Los Mochis. The
project is about 5 km on a good gravel road east of the small town of Nacimiento, which is
located 25 kilometers north of the regional center of Choix.
1.2
Geology and Mineralization
At the Don Roman project, mineralization consists Zn-Pb-Ag metasomatic skarn
mineralization developed in a more favorable lithologic unit near the base of an otherwise
thick, massive limestone. It is probably genetically related to the nearby Santo Tomas
porphyry copper system. The author has inferred that mineralization has developed as
irregularly shaped crudely tabular bodies (mantos) largely within this unit and as planar to
chimney-like bodies at structural intersections. The favorable zone appears to dip to the
northeast at approximately 25 to 35 degrees.
At this time there is no well defined resource which would fit NI-43-101 standards. The
development program which began in June 2009 is designed to remedy this deficiency. A
drift is being driven at an azimuth of approximately N60E for perhaps 280 meters. From
this, perpendicular crosscuts will be driven -- to serve as stations for fan drilling, to sample
and determine the limits of the mineralization in three dimensions and to provide mill feed.
On and near the Don Roman property there are several additional very similar base metal
occurences, which must be further investigated. There are also at least two gold-bearing
quartz veins. The best known of these is the Don Felipe vein, less than a kilometer SE of
Don Roman. An access road will be constructed shortly to allow bulk sampling.
The Sanaloya concession group about 10 kilometers to the NE has at least three very
attractive propects – the Centenario Au-Cu-Ag quartz vein, the El Oro stratabound (?) FeAu-Cu zone and the El Mono Zn-Pb-Ag vein. Refurbishing an access road will allow
additional mapping, trenching and bulk sampling of these properties.
4
1.3
Exploration and Mining History
The Reforma Zn-Pb-Ag district 15 km to the northeast was the place where the Mexican
mining giant Penoles got its start decades ago. The Santo Tomas Cupper deposit 5 km to the
east has been known since the 1960’s. Other old working nearby date to before the Mexican
revolution. However, the date of the discovery of the Don Ramon mineralization is not
known. It was not noted in the 1976 reconnaissance on the area. It was noted in a 1990
government report. Production to date must have been quite small.
American Metal Mining acquired the property late in 2006. In 2007 they commissioned the
contractor M21 Mining to map and sample the workings and surface exposures in the
vicinity.
1.4 Drilling and Sampling
American Metal Mining has done no drilling at Don Roman, and there is no evidence of prior
drilling. Due to extremely difficult access for drilling downward from the surface, and the
small footprint of the existing workings, a more direct method of exploration was chosen. In
June 2009 a N60E drift was begun with crosscuts at 25 meter intervals. From these crosscuts
several fans of holes will be drilled to test the limits and grade of mineralization in three
dimensions.
1.5 Metallurgical Testing and Mineral Processing.
American Metal Mining commissioned M21 Mining in 2007 to carry out metallurgical
testing of Don Roman ore. Because the ore is a mixture of oxidized and sulfide material,
simple flotation processing was not sufficient. Sulfurization of oxidzed material was tested
with encouraging results. Gravity concentration of heavy Pb and Zn oxide minerals was also
encouraging. The final processing sequence includes all three methods.
At the end of June 2009, construction the processing plant was essentially complete. It is
designed with three identical independent processing circuits to provide flexibility in
processing rates and to allow processing of more than one ore type at the same time.
The process is a follows: the ore is crushed in a closed circuit system to provide 3/8 inch
feed to ball mills which produce a -150 mesh product. All of this is passed over a shaker
table to collect free gold and cerussite (PbCo3). It then goes to a conditioner tank for
sulfidation (converts some of the other Pb and Zn minerals to sulfides). The conditioned ore
feeds a series of flotation cells which collect sulfides in two concentrates, lead and zinc.
1.6 Mineral Resource Estimation
There has been no NI 43-101 compliant resource estimation. There have been some small
scale historic resource estimates in the immediate vicinity of the existing workings. While
these were useful for exploration purposes, they were not NI 43-10-1 compliant.
5
1.7 Interpretation and Conclusions
From his review of data provided by American Metal Mining, the author believes that the
data are generally an accurate and reasonable representation of the Don Roman project.
The available data are consistent with the author’s interpretation of the controls and
distribution of the Zn-Pb-Ag mineralization. The mineralization appears confined to a
favorable stratigraphic horizon near the base of the massive limestone which dips to the
northeast at approximately 30 degrees. It is expected to occur as irregular tabular mantos
along this horizon, as well as planar and chimney-like smaller bodies at structural
intersections.
The development drifting, cross-cutting and drilling which has begun should demonstrate the
grade and extent of this mineralization in three dimensions, allowing a reliable resource
estimate.
Several other attractive prospects have been evaluated, both on the Don Roman concession
group and on the Sanaloya concession group to the north. The San Felipe gold prospect will
be relatively simple to evaluate further, both with bulk sampling and drilling. The next stage
of evaluation of the Sanaloya group will also be relatively straightforward. Rehabilitation of
access roads will expedite further mapping, trenching and bulk sampling of the three known
targets and perhaps the discovery of others.
While American Metal Mining has adopted the unconventional approach of building a
processing plant early in the development process, the production of ore from the Don
Roman development work is expected to reimburse the cost of the mill and of the
development work. In a few months the data from the workings will allow calculation of a
potentially substantial resource for the mill. The rapid advancement of the other attractive
prospects nearby is also expected to provide mill feed in the not too distant future.
1.8 Recommendations
Establishment of a systematic mapping, sampling and assay quality control program for the
Don Roman development is vital to producing a reliable resource estimate. This program has
begun and will be refined in the first few weeks. Mine development and exploration will
proceed as rapidly as possible. There will be additional construction expenses at the millsite.
The advancement of the understanding of the other nearby prospects, such as the San Felipe
gold vein, must have high priority as well. It will be vital to define resources at some of
these as soon as possible to provide additional feed for the processing plant to allow it to
reach full capacity. Other potential acquisitions nearby must also be pursued quickly.
The proposed budget for the remainder of 2009 to accomplish these goals is $950,000.
American Metal Mining has also allocated $250,000 to further exploration of the Sanaloya
concession group.
6
2.0
INTRODUCTION AND TERMS OF REFERENCE
Dana Durgin has prepared this technical report regarding the Don Roman Project at the
request of American Metal Mining, S.A. de C. V. a subsidiary of Tara Minerals Corp, to
establish qualified value, to increase value and as a basis to track production progress and
what that means to their resource categories. The report will satisfy their obligation to file a
technical report as public information in connection with its filings as required under the
policies of the Toronto Stock Exchange. This report is written in compliance with disclosure
and reporting requirements set forth in the Canadian Securities Administrators’ National
Instrument 43-101, Companion Policy 43-101CP and Form 43-101. The author carried out
such independent investigations of the data and of the property in the field as has been
deemed necessary so that, in the professional opinion of the author, he might reasonably rely
on this information.
The author reviewed pertinent technical reports and data provided by American Metal
Mining relative to the regional and property geology, land status, history of the district and of
the project, past and present exploration efforts and results, methodology, interpretations, and
other data necessary to the understanding of the project, sufficient to produce this report, as
well as reviewing the relevant public literature.
The data required to produce this report was generated by Mexican government agencies
supporting the Mexican mining industry and by the exploration activities of American Metal
Mining, S.A. de C.V. over the past three years. The bulk of the information used was
adapted from a report dated August 2007 by Flores, Gonzalez, Hernandez and Castillo, and
other reports in the files of American Metal Mining, S.A. de C.V. The author has relied on
that data and his observations in the field for this report. The conclusions made in this report
were based on the author’s review of that data and limited additional data acquired
independently. Dana Durgin spent June 9-12, 2009 reviewing the project in the field with
American Metal Mining personnel.
The author believes that the data presented to him by American Metal Mining are generally a
reasonable and accurate representation of the Don Roman gold project.
Units of measure, conversion factors and currency used in this report are as follows:
Linear Measure
1 inch
1 foot
1 yard
1 mile
= 2.54 centimeters = 254 millimeters
= 0.3048 meter
= 0.9144 meter
= 1.6 kilometers
Area Measure
1 acre
1 square mile
= 0.4047 hectare
= 640 acres, or 259 hectares
7
Capacity Measure (liquid)
1 US gallon
= 4 quart or 3.785 liters
Weight
1 short ton
1 pound
= 16 oz
= 2000 pounds = 0.907 tonne
= 0..454 kg = 14.5833 troy ounces
Analytical Values
1%
percent
Grams per
metric tonne
Troy ounces
per short ton
1%
1 gm/tonne
1oz troy/ton
100 ppb
100 ppm
1%
0.0001%
0.003429%
10,000
1
34.2857
291.667
0.0291667
1
0.0029
2.917
Commonly used abbreviations and acronyms
AA
Ag
Au
CIM
core
FA-AA
g
g/t Ag
g/t Au
has
m
mm
km
NSR
Pb
RC
t
tpd
Zn
atomic absorption spectrometry
silver
gold
Canadian Institute of Mining, Metallurgical and Petroleum
diamond drilling method, producing a cylinder of rock
fire assay with an atomic absorption finish
grams
grams of silver per metric tonne, equivalent to ppm
grams of gold per metric tonne, equivalent to ppm
hectares
meters
millimeters
kilometers
Net Smelter Return
lead
reverse circulation drilling method
tonnes
tons per day
zinc
8
3.0
DISCLAIMER
The author has reviewed copies title documents for the properties making up the project,
however he is not qualified to assess the legal validity of these documents, and can only
assume them to be valid.
The author has not investigated any environmental or social issues which could conceivably
affect the Don Roman project. He does not consider himself to be qualified to assess these
issues in Mexico. However, these were discussed generally in the 2007 report by Flores,
et.al. These findings are quoted in section 5.0 of this report.
Conclusions and recommendations presented in this report are those of the author, based on
his review of the data and extensive personal experience as a geologist in the mining
industry, and do not necessarily reflect those of American Metal Mining, S.A. de C.V.
4.0
PROPERTY DESCRIPTION AND LOCATION
4.1
Location
The Don Roman project is located northernmost Sinaloa state in Mexico, close to the border
with Chihuahua, and is approximately 200 km by road northeast from the city of Los Mochis
(Figure 4.1). The project is about 5 km on a good gravel road northeast of the small town of
Nacimiento, which is located 30 kilometers north of the municipal capitol of Choix. UTM
geographic coordinates at the Don Ramon portal are 775694E, 2974851N, at an elevation of
1200 meters above sea level. It is on the INEGI 1:50,000 scale map sheet Tasajeras. The
property is a 3 to 3.5 hour drive from Los Mochis.
The coordinate system used for maps and sections in this report is the Universal Transverse
Mercator system, Zone 12. GPS coordinates are referenced to NAD 27 Mexico datum.
4.2
Land Area
The Don Ramon Project consists of 5 concessions centered on an area 4 km northeast of
Nacimiento, Sinaloa with a total area of 331.367 hectares. Amermin S.A. de C.V. (a related
company) consolidated the property between 2006 and 2007 and purchased the five
concessions in the Don Ramon group outright in 2007, with no payments outstanding.
American Metal Mining, S.A. de C.V., then purchased the property from Amermin later in
2007.
Table 4.2 Don Roman Concession Data
Concession
Title Number
Hectares
Don Roman
Maria del Lourdes
Sta. Lucia
204518
208524
222480
69.1919
200.000
21.4672
9
Nubias
Ampl. Nubias
217789
218519
Total
11.758
28.9484
331.3655 ha
The genealogy of the Tara Gold Resources corporate family should be explained. Tara Gold
Resources is a US company, listed on the OTC exchange as TRGD.PK, and as T8N on the
Frankfurt exchange. It owns 99.99% of Corporacion Amermin, S.A. de C.V., the Mexican
company which controls the company’s gold properties in Mexico. The remaining 0.01% is
owned by Ramiro Trevizo Ledezma, as required to form a corporation under Mexican Law.
Tara Gold Resources owns 82% of Tara Minerals Corporation, a Nevada company. Tara
Minerals owns 99.99% of American Metal Mining, S.A. de C.V. (Ramiro Trevizo Ledezma
owns the remaining 0.01% as required to form a corporation under Mexican law), the
Mexican company which controls the company’s base metal and industrial metal properties
in Mexico, including the Don Roman project.
Figure 4.1 Don Roman Location Map (Flores, et.al., 2007)
10
Figure 4.2 Don Roman Concession Map (Flores, et.al., 2007)
4.3
Surface Rights
Relations with the local landowners (ejidos) are very good. Several meetings have been held
with the ejido and all have been positive. Agreements are in place for road use and
construction, waterline rights of way, and other surface uses at no significant cost to the
company. They have agreed to provide jobs and community services to the local ejido.
5.0
5.1
ACCESS; CLIMATE; LOCAL RESOURCES; INFRASTRUCTURE; AND
PHISIOGRAPHY
Access
11
Access to the Don Roman property is very good. The city of Los Mochis near the Pacific
coast can be accessed by scheduled airlines, Highway 15 which is the major north-south
coastal highway, or the Copper Canyon Railway from Chihuahua. The smaller municipal
center of Choix is approximately 200 kilometers by paved highway from Los Mochis. The
small town of Nacimiento is 25 kilometers northeast of Choix by a good, but crooked gravel
road. The Don Ramon property is 5 kilometers by a steep dirt access road northeast of
Nacimiento. The author was told (R. Trevizo, personnal communication) that the Mexican
government is planning (beginning?) to construct a new road which will pass from Choix
across the sierras to connect with the road system of southern Chihuahua. The planned route
is very close to the Don Roman property.
Flights from the USA or Canada must change aircraft in Hermosillo, Sonora – a 1.5 hour
flight from Phoenix for example. The flight to Los Mochis is approximately an hour. There
is also a small airport in Choix which is suitable for private aircraft.
5.2
Climate
The area is arid to semi-arid with most
rain falling in the summer months in
thunderstorms.
The average annual
rainfall is said to be 780mm or 30 inches
(Flores, 2007), but it appears much drier
than that to the author. Average summer
temperatures are approximately 30 degrees
C, with a maximum of 47 degrees C.
Temperatures average 10 degrees C in the
winter months, and temperatures below
freezing are very rare. The vegetation
reflects the sparse rainfall with a sparse
mesquite-catclaw-cholla-prickly
pear
cactus flora.
Prevailing winds are
generally from the west.
Figure 5.2 View NW from Don Roman Portal
5.3
Local Resources
The city of Choix has a population of approximately 40,000 people. It is the regional center
for all goods and services, including an airfield, a railroad terminus, communications, hotels,
medical facilities, parts and supplies and skilled workers. American Metal Mining maintains
a small office there.
Within 10 kilometers of the project there are several small communities, the largest of which
is Nacimiento, where American Mineral Mining has its processing plant and field office.
These communities can provide workers and basic supplies and lodging. There are two small
fishing resorts with lodgings about 4 kilometers to the north at the Donaldo Colosio
Reservoir.
12
5.4
Physiography
The elevation on the property is largely between 1000 and 1300 meters. The highest peak is
El Sapo at 1390 meters, immediately above the Don Ramon portal. For the most part the
terrain is very steep, with several ephemeral streams. Access to most of the property is
limited to two mining access roads. Because of the steep hillsides, construction of new roads
for drilling access can be quite challenging in some areas, particularly in the immediate area
of the Don Roman workings.
6.0 HISTORY
It is unclear when the workings at Don Roman were excavated. The earliest mention of them
is in a 1976 report by the Consejo de Recursos Minerales (Bustamante, et.al., 1976). They
merely stated that it was “exploited some time on the past”. The Don Roman concession did
not exist at that time. They indicated that the prospect at the edge of the Maria del Lourdes
concession (part of Don Roman workings) had a pocket of mineralization striking N79W,
dipping 45NE. Three samples averaged 379.4 g/t Ag, 5.36% Pb and 18.27% Zn.
It was visited again by government geologists in 1990 (Bon and Bustamante, 1990). Nine
more samples were collected from the workings with an average of 305.4 g/t Ag, 3.33% Pb
and 9.47% Zn.
In 1994, Alba and Bonn examined the workings again. Five samples from the upper level
averaged 432.1 g/t Ag, 4.62 % Pb and 12.32% Zn. Seven samples from the second level
averaged 214.9 g/t Ag, 2.42% Pb and 7.41% Zn. They did not calculate a resource due to
insufficient data.
The Consejo visited the property a third time in 1996 (Santiago and Bon, 1996). They
surveyed the surface and the workings and collected 20 samples from within the workings
(assays illegible) and 42 samples along the granite/limestone contact to the north-northwest
for approximately 2 kilometers. Those 42 samples had no metal values of economic
significance.
The current Don Ramon concession was staked February 27, 1997 by Gaspar Alarcon Lara,
and the Maria de Lourdes concession was staked January 21, 1998 by Miguel Angel Alarcon
Requejo.
6.1
Recent Exploration History
The president of Amermin, Ramiro Trevizo, was quite familiar with the property from his
prior experience in the district. The Don Ramon, Santa Lucia and Maria de Lourdes
concessions were acquired October 7, 2006 on his initiative. On October 18, 2006 an
agreement to acquire the Las Nubias concessions was signed. The concessions were initially
acquired by Corporacion Amermin, S.A. de C.V. Ownership was transferred to American
Metal Mining, S.A. de C. V. through inter-company transactions later in 2007.
13
After a review of available data and limited sampling, a mining engineering company from
Chihuahua City, (M21, S.A. de C.V.), was contracted to do a thorough data review,
additional sampling, metallurgical testing and to produce a processing plant design based on
that work. They produced a three volume report (Flores, et.al., 2007) in August 2007.
In addition, Mr. Treviso examined several other gold and polymetallic properties in the
district. These included the El Boleo Pb-Zn-Ag deposit a few kilometers to the NW of Don
Roman, the Centenario gold and iron property 9 kilometers to the north, and the El Sol group
(gold) 8 kilometers to the north, and others. He envisioned the potential to combine the
output of several of these properties to feed a central flotation milling complex at
Nacimiento. Because of the higher grades of Ag-Pb-Zn available at Don Roman and the
short haul to the mill, mine development was begun there. In 2008, access roads were
upgraded, clean-up and sampling of the workings was done, mining equipment was
purchased, initial mining tests were done, and plant construction began, including the drilling
of a well. In the spring of 2009 advancement of three drifts on the main level of Don Ramon
was begun.
While it was an unconventional approach, Mr. Treviso was satisfied that sufficient tonnages
of higher grade material were available at Don Roman to finance the construction of a mill at
Nacimiento. This mill is intended as a central facility to process ores from the district,
initially from Don Roman, and then from others as they are developed. On Monday June 15,
2009 the power was turned on for the first time. The mill was essentially complete on that
date except for erecting a roof and doing shake-down testing.
7.0
GEOLOGIC SETTING
7.1
Regional Geology
Northeastern Sinaloa is within the Basin and Range sub-province of the Sierra Madre
Occidental of Mexico. There the ridges and valleys generally trend NNW-SSE due to the
regional extensional faulting.
The area is underlain primarily by a large Eocene granodioritic batholith which tends to
weather into low gently sloping hills. This intrusive body cuts a basement of Paleozoic
schists and quartzites. These are disconformably overlain by andesitic metavolcanics, a
limestone-mudstone sequence and finally by Upper Mesozoic massive limestones. These
more resistant units often form steeper ridges and cliffs, such as those at Don Roman.
All of these units were affected thermally by the intrusion of the granodiorite and by Tertiary
quartz monzonite and rhyolite stocks. Hornfels and skarn bodies are common at the contacts,
particularly near the younger intrusions. The large low grade Santo Tomas porphyry copper
deposit, a few kilometers east of Don Roman is hosted by quartz monzonites with alteration
minerals dated at 57 Ma. The Don Roman area polymetallic mineralization is probably distal
skarn related to the Santo Tomas porphyry copper system.
14
Overlying the older rocks are a series of andesitic flows and tuffs of lower to mid-Tertiary
age. Locally the andesites are capped by bodies of rhyolitic ignimbrite, present largely as
erosional remnants.
Figure 7.1 Regional Geology Don Roman Area (Carta Geologica-Minera G12-B59)
7.2
Local Geology
In the immediate Don Ramon mine area there are four major geologic units – granodiorite,
meta-limestones, meta-andesites and rhyolitic intrusive rocks. The granodiorite is the
widespread Choix Batholith which has age-dates ranging from nearly 100 Ma to 60 Ma. The
massive meta-limestones and the minor meta-andesites are apparently Cretaceous in age and
have been weakly altered and recrystallized by the granodiorite. The rhyolitic intrusive rocks
are small in volume, at least where exposed, and are probably temporally and genetically
related to the quartz monzonite bodies which host the large Santo Tomas and La Reyna CuAu deposits a few kilometers to the east.
15
Figure 7.2 Local Geology Map
16
The granodiorites and andesites are essentially unmineralized. The granodiorite is weakly to
moderately argillically altered near the contacts with limestones and andesites and often
contains moderate epidote, but this alteration is rather weak. The andesites are recrystallized
a bit, moderately to strongly fractured and show similar argillic and epidote-bearing
alteration. The massive limestones were also recrystallized, but show very little other
pervasive alteration. This suggests to the author that this phase of mild alteration is related to
the intrusion of the granodiorite, but that the Zn-Pb-Ag mineralization is a later event.
The mineralization at Don Roman is very poorly exposed, except in the main workings, and
on the east side in the Rosita adit and Bolito prospects. The author believes that its
localization was controlled by permeability in the basal few tens of meters in the massive
recrystallized limestone, either a lithologic feature (preferred) or fracturing sub-parallel to the
contact. Narrow very high grade zones exposed in the workings are controlled by
permeability produced by high angle faulting, as is the Rosita occurrance. The shape of
mineralized bodies within the Don Ramon “manto” will be controlled by a combination of
the planar bedding-parallel lithologic feature and cross-cutting faults and fracture sets. This
seems to also be the case at the Bolito prospects.
Along the western side of the ridge, north of the Don Roman adit, the contact between the
granodiorite and the massive
limestone is a fault which strikes
about N30 to 40W and dips 35 to
45 degrees east. Within the fault
there is a fault breccia zone up to
0.5 meters thick which contains
fragments and blocks of both
weakly altered granite and
siliceous breccias with abundant
lead and zinc sulfides. Clearly
much of the fault movement
occurred after the mineralization
was emplaced. There is also a
set of N45E oriented, steeply
dipping faults, also apparently
post-mineral, which cut the
massive limestone into large
blocks. These are responsible for
the large number of straight NE
trending streams on the east side
of the Don Roman ridge, and its
abrupt end to the northwest.
Figure 7.3 NE Dipping Bedding in Massive Limestone
In the photo on the right there appears to be a poorly defined planar aspect to the massive
limestone, inclined to the right (NE). The author interprets this as crude bedding-parallel
layering. It seems to dip nearly parallel to the northeastern slope of the Don Ramon ridge. If
that is the case, the brecciated limestones exposed in the Bolito prospects down the northeast
17
slope of the ridge may be the same breccia zone which is mineralized in the Don Roman.
Therefore the favorable tabular basal zone of the massive limestone seems to dip 25 to 35
degrees to the northeast and is only thinly covered (and exposed in the Bolito prospects) on
that northeast slope. This suggests that the Don Roman deposit, or at least the layer
favorable for mineralization could be much larger than it appears in the currently available
exposures.
Figure 7.4 Hypothetical Geologic Section
8.0
DEPOSIT TYPES
The minealization being exploited at Don Roman would be termed a skarn by the definition
of Meinert (1993, pg 117) “…what defines a rock as skarn is the mineralogy, which includes
a wide variety of calc-silicate minerals, but is usually dominated by garnet and pyroxene.
Thus the presence of a skarn does not indicate a particular geologic setting or a particular
protolith composition.
Rather, its development indicates that the combination of
temperature, pressure, fluid and host rock composition was within the stability range of the
identified skarn minerals.”
There are several types of skarn – Figure 8.1 shows the generalized skarn type interpreted to
be present at Don Roman. The source pluton for the skarn is not exposed, except possibly as
a small rhyolite dike. The presence of several rhyolitic intrusive bodies in the immediate
vicinity and the Santo Tomas porphyry copper complex a few kilometers to the east suggest
18
that this is a reasonable interpretation. This would be termed a “fluid controlled metasomatic
skarn” (Meinert, 1993).
The formation of a skarn is a dynamic process in a
complex hydrothermal system which is evolving
over time. A coarse grained ore-bearing skarn is
usually developed late in the process and its
location relative to the source is often controlled
by faulting as well as by rock-fluid reactions.
Due to the strong temperature gradients and large
fluid circulation cells caused by the intrusion of
the magma, a skarn can be very complex and may
be proximal to the intrusion or somewhat distal,
channeled by faults and fractures. There is also
often a retrograde alteration overprint of lower
temperature minerals such as epidote and clays as
the thermal system collapses.
Figure 8.0 Metasomatic Skarn
Zinc skarns commonly occur in continental settings associated with subduction and
extensional faulting, which is the case in Sinaloa. These skarns are generally high grade with
Zn + Pb grades of 10 to 20% and silver in the 30 to 300 g/t range. “The common thread
linking most zinc skarn ores is their occurrence distal to associated igneous rocks” (Meinert
1993). It is very common to find substantial Zn-Pb-Ag skarn deposits peripheral to porphyry
copper systems. Meinert (1993) says “ …a magmatic source cannot be identified for some
deposits, most skarns develop over a range of temperatures and most large skarn deposits
contain both skarn rich and skarn-poor ores in a variety of geometric settings, including
mantos and chimneys”. Megaw, et.al. (1988) noted that many zinc skarn districts “grade
outward from intrusion-associated mineralization to intrusion-free ores, which suggests that
those districts lacking known intrusion relationships may mot have been traced to their ends.”
The mineralization being exploited at Don Roman certainly appears to fit these criteria in
terms of metal grades and in that it is peripheral to a strong porhpyry system, yet somewhat
distal to it in an area of mild alteration away from the immediate vicinity of the copper
sulfide-rich center.
There have been no formal mineralogical or paragenetic studies at the Don Roman project,
other than metallurgical testing. The non-sulfide minerals associated with the pyrite,
sphalerite, galena and chalcopyrite include quartz, garnet, pyroxene and epidote. These
minerals are generally restricted to the immediate vicinity of the sulfides and do not extend
any significant distance into the non-brecciated, massive recrystallized limestone.
9.0
MINERALIZATION
At the Don Roman project mineralization falls into two categories. The first is the skarn
mineralization currently being developed at the Don Roman mine. There are other strong
showings to the west and northwest on the Nubias concessions, as well as others nearby
19
which are undergoing negotiations. The second type is moderately to steeply dipping goldbearing quartz veins in shear zones. The best example of this group is the San Felipe vein
about 800 meters southeast of the Don Roman portal, on the east side of the ridge.
9.1
Don Roman Mineralization
The Don Roman mineralization is exposed in a very small area at the southwest corner of
Cerro el Sapo. It is in fault contact with the underlying granodiorite of the Choix batholith.
Mineralization is clearly older that the faulting in that mineralized skarn blocks are present in
the fault breccia. It appears to be younger than the batholith and is interpreted to have a
genetic relationship to the Santo Tomas porphyry copper system a few kilometers to the east.
The higher grade Zn-Pb-Ag mineralization is only exposed in the Don Roman workings and
in two small prospects on the east side of the mountain, Rosita and Bolito. There has been no
drilling up to the time of the author’s visit. This lack of drilling is the result of very difficult
logistics. Any drilling from the top of the hill would require helicopter support due to the
very steep terrain. The only realistically feasible drilling would need to be done from inside
the workings. Such a drilling program is included in the ongoing development plan. To test
the lateral extent of mineralization, to provide high grade mill feed, and provide stations for
fan drilling, a drift is currently being extended to the east-northeast through the limestone
body. At 25 meter intervals along the drift short crosscuts will be driven to provide drilling
stations. From each of these stations a fan of 20-meter test holes will be drilled to test the
extent of mineralization above, below and lateral to the drift. Later the cross cuts will be
extended both to block out ore and to provide additional drill stations.
The shape of the mineralized zone is difficult to determine from the current exposures. It is
the author’s interpretation (also discussed in section 7.2) that the body of Zn-Pb-Ag
mineralization is controlled by a zone of permeability near the base of the thick massive
limestone unit. The permeability may have been a primary aspect of the rock, such as a reef
apron breccia, or induced by bedding-parallel fracturing, or a combination of the two. The
end result is the same – a zone of brecciation a few tens of meters thick and roughly tabular
in shape that may extend several hundred meters to the northeast, north and northwest under
the thick limestone cover. Narrow zones of higher grade mineralization also appear to be
controlled by steeply dipping fractures in and above (and below?) the tabular zone, at least
one of which is related to a small rhyolite dike.. It is unlikely that all of this tabular zone will
carry ore grades. Within the overall tabular shape, bodies of better grade mineralization will
probably have irregular to amoeboid shapes within the zone, controlled by zones of higher
permeability, especially at fracture intersections. At fault intersections here are may also be
irregular sub-vertical chimneys above and below the main tabular zone.
Limited sampling by the Consejo de Recursos Minerales in three visits to the property
indicated that very good grades were available. However they only collected three samples
which were probably not very representative of the mineralization as a whole and they were
only reported as averages. Their sampling results are noted in Section 6.0 of this report and
in table 9.1 below.
20
The contractor M21 did a sampling program in the workings as well. They collected a total
of 24 samples from the workings, as shown on figure 9.1 below. These samples had an
average grade of 5.34% Zn, 1.62 % Pb and 186.12G/t Ag. Several of these were not taken in
well mineralized rock, those at the portal for example, thus the average of the samples is
lower than than the anticipated grade of the material to be mined. From the reports it is not
clear exactly where most of these samples were collected, nor is it clear what the sampling
widths were. It is also not clear how representative they are of the mineralization as a whole.
Some were selected high grade samples and some were from very poorly mineralized
wallrocks. The usefulness of this table of information is therefore rather limited, and it is
Table 9.1 Sampling Programs, Average Values
Sampler
Year
# of
Samples
Ag %
Average
Pb %
Average
Zn %
Average
Consejo 1976
Consejo 1990
Consejo 1994a
Consejo 1994b
M21 2007
Total
Weighted
average
3
9
5
379.4
305.4
432.1
214.9
186.12
5.36
3.33
4.62
2.42
1.61
18.27
9.47
12.32
7.41
5.34
244.9
2.6
7.95
24
48
certainly not compatible with NI-43-101 standards. In the author’s opinion, the weighted
average may be at least suggestive of the grade of the mineralization available, since it
includes both high grades and low grades from 48 samples over a fairly large area. Using the
metal prices for June 29, 2009 posted on the Kitco.com website (Ag = $13.96/oz, Pb =
$0.77/lb, Zn = $0.70/lb), ore with this weighted average grade would have a gross in-place
metal value (not considering mining dilution, metallurgical recoveries, shipping and smelter
charges, etc.) of approximately $260 per ton. If a mined grade similar to this could be
maintained, it should certainly be profitable to mine and process.
American Metal Mining’s geologist carried out a mapping and sampling program of the Don
Roman workings. Figure 9.1 shows the simplified geology as of mid-June 2009. Figure 9.2
is a series of cross sections from that map.
21
Figure 9.1 Don Roman Mine Geology
Figure 9.2 Don Ramon Mine Sections
22
Figure 9.3 Don Roman Mine Sampling – Pb & Zn
Figure 9.4 Don Roman Mine Sampling - Ag
23
Table 9.2 Don Roman Recent Underground Sampling
Exploration drifting, which is also producing mill feed, is ongoing. The principal drift is
being driven at an azimuth of approximately N60E. The first perpendicular cross cut is also
in progress and fan drilling from the crosscut will begin soon. A routine sampling program
24
is in place. The standard procedure is to cut a channel sample across the face after each blast.
Crosscutting higher grade structures are also more selectively sampled, perpendicular to their
dip. A shovel-size sample is also taken
from each scoop-tram bucket load.
It is clear from government mapping
(Figure 9.5) that there are several other
Zn-Pb-Ag(Cu) showings within the
limestone unit KaMCz (gray on the map),
such as San Jose, Mi Madre, El Rincon, La
Chiminea, El Creston, Maria de Jesus, and
El Copalillo. These are being investigated
by American Metal Mining as time
permits. Some are within the current
concession package and some are under
negotiation
Figure 9.5 Nearby Zn-Pb-Ag Showings
9.2
Gold Mineralization
In addition to the above prospects, there are
attractive gold prospects at Don Roman. The
best known of these is Don Felipe. It is
located at the lower right edge of the map in
figure 9.1 (not marked) near the dark grey
JtKapMA unit, which is meta-andesite.
San Felipe is a quartz vein hosted by a shear
zone in the meta-andesite. It is exposed in
two small workings The shear zone strikes
N40W and dips 40 degrees to the southwest,
into the hill. The vein is also sheared into
quartz-sulfide-calcite pods within clay-rich
shear zone which is two to three meters wide.
Figure 9.6 Don Felipe Vein
The vein material appears to have an average width of 1.0 to 1.5 meters. Several samples of
this vein material had very attractive grades, with two samples over 40 g/t Au – see Figure
9.7 above. American Metal Mining intends to construct an access road and mine a bulk
sample of the vein material for analysis and to test its milling characteristics in the near
future.
While this is the only such vein on the Don Ramon property which was seen by the author in
the field, American Metals Mining’s project geologist said that there are others which have
not yet been carefully examined. According to Figure 9.5 above, the La Nubia prospect is
25
Figure 9.7 Don Felipe Mine Sampling
one of those, located several hundred meters NNW from the Don Roman adit. The author
did not visit that prospect.
10.0
EXPLORATION
American Metal Mining has focused its attention largely on the Don Roman deposit, working
toward putting it into production. Other prospects in the area have also received attention,
but those outside the Don Roman concession area will be discussed in section 15.0 (Adjacent
Properties). As noted earlier in the report, it is the company’s intention to put the Don
Roman into production as soon as the processing plant is operational (approximately July1,
2009), and then begin investigating the other potentially minable targets more thoroughly.
There has been very little exploration there in the traditional seqence of detailed surface
mapping and sampling, geophysics and drilling. All the prospects and old workings have
been mapped and sampled. The fault zone along the west side of the ridge has been sampled.
The near vertical cliffs are massive limestones that do not appear mineralized, even if they
could be sampled. There are very few surface exposures of the Don Roman mineralization
other than within the workings, so there is very little additional information to be gained by
further surface geologic or geochemical work. As noted previously, the terrain at the Don
Roman deposit is extremely steep. Building access roads to sites suitable for drilling down
into the mineralized body from the surface to test its extent and grade would be very difficult
and expensive, probably requiring helicopter support. Drilling from inside the workings
26
would have very simple access. However the workings are rather small and drilling from
inside the current workings would allow testing of only a limited area.
Recognizing these limitations, American Metal Mining has chosen the most direct method of
exploring the Don Ramon deposit. From the eastern end of the current workings, they have
begun driving a horizontal drift at an azimuth of approximately N60E. The intent is to
continue this drift for at least 200 meters, perhaps until it breaks through to the surface on the
eastern side. As the drift proceeds, short crosscuts will be driven to both sides perpendicular
to the main drift at 25 meter intervals. From each of these a fan of 20 to 30 meter holes will
be drilled above, laterally and below the drift. Later the crosscuts will be extended at least to
the limits of mineralization, and these will be fan drilled at 25 meter intervals as well.
This program will provide three-dimensional geologic and assay data from drifting muck
sampling and from drill hole sampling on 25 meter intervals over an area perhaps 250 meters
long, 50 to 100 meters wide and 50 to 60 meters thick. That should be sufficient data to
define and calculate a substantial proven and probably reserve. At the same time, rather than
rapidly consuming exploration funds, it will provide high grade mill feed. Processing this
material and marketing the concentrate is anticipated to provide sufficient cash flow to pay
for the construction and operation of the mill, the driving of the workings, the drilling of the
holes and to do additional exploration and development work on the several other nearby
targets.
This drifting and drilling exploration and development program had just begun by the end of
June 2009, thus there is no assay data available at this time.
11.0
DRILLING
American Metal Mining has done no drilling at this time. They company is not aware of any
prior drilling done at the Don Ramon project. The underground drilling program is
scheduled to begin in July 2009.
12.0
SAMPLING METHOD AND APPROACH
12.1 Summary
The Don Roman sample database contains sample data from surface rock chip and
underground sampling. It is the author’s opinion that all of the surface and underground
sampling done M21 (for American Metal Mining) and that done more recently by American
Metal Mining was carried out according to industry standards. The sampling done in three
phases by the Mexican government geologists is less well documented, although it has been
the author’s experience that sampling done by the Consejo de Recursos Mineros personnel
has generally been carefully carried out and well marked on the ground. The 1990 group has
a sample location map and individual results, and samples appear to have been continuous
chip samples. The 1994 sampling was similar, but the sample location map was illegible. In
the 1994 report samples are not well described and the sample location maps are not very
legible as well. It has also been the author’s experience that early rounds of sampling at a
prospect tend to selectively higher grade and not representative of the deposit as a whole
27
(everywhere, not just in Mexico). The more recent sampling by M21 (2007) and by
American Metal Mining is probably more reliable overall, because they were trying to be
representative and samples were analyzed by modern internationally recognized laboratories.
12.2 Prospecting Sampling Methods
Representative continuous chip samples and grab samples were removed from the outcrop
surface by chipping with a geological hammer. The focus of the sampling was mainly on
altered rock and vein material. The rock samples were placed in sample bags and sealed.
Each cloth sample bag had the sample number written on the outside of the bag with black
permanent marker and a sample tag was placed inside. The sample description and location
was entered on the sample sheet with the same number as the sample tag.
12.3 Underground Channel Sampling
The underground sampling sites seen by the author appeared to have been sampled in an
acceptable manner. They were not the deep continuous old-style channel samples; rather
they were more of a continuous surface chip sample, which is acceptable.
A geologist marked chip sample lines with spray paint, with individual intervals marked and
measured. Samplers then used hammers and chisels to cut continuous surface chips along a
line parallel to the painted line. Sample chips were collected on a tarp placed below the
sample area, transferred into sample bags and sealed. Each cloth sample bag had the sample
number written on the outside of the bag with black permanent marker and a sample tag was
placed inside. The sample description and location was entered on the sample sheet with the
same number as the sample tag.
13.0
SAMPLE PREPARATION, ANALYSIS AND SECURITY
It is the opinion of the author that the sample preparation, security and analytical procedures
implemented have been adequate for the sampling conducted by M21 and by American
Metal Mining. While the same procedures for the Consejo de Recursos Mineros were
probably adequate as well, they are not well documented.
M21 sent its samples to Chemex Laboratories, a very well known and competent lab.
Chemex uses a fire assay method with rigorous impurity corrections, and internal standards
and replicates are included in the analytical sequence. The assay results from samples,
synthetic standards and replicate data are reviewed by Chemex before approval. If any
discrepancies were noted, appropriate re-analyses were carried out. Chemex has ISO 9002
laboratory accreditation and ISO:9001:2000 for North America. The author is confident that
the procedures used by Chemex meet industry standards.
American Metal Mining has been sending its geologic samples for assay to Laboratorio
Industrial Metallurgico in Gomex Palacia, Duurango, Mexico for analysis. This an ISO
certified analytical and metallurgical laboratory, which uses industry standard analytical and
quality control procedures.
28
14.0
DATA VERIFICATION
The report written by M21 (2007) regarding its review of the data and sampling of both
surface and underground exposures does not discuss quality control or data verification.
However, its analytic work was done at Chemex Laboratory. Chemex is a laboratory with a
very good international reputation for analytical quality. They have a rigorous internal check
assay and quality control program.
American Metal mining has done only very limited sampling up to the time of this report. A
quality control program will be in place for the underground drill sampling program and for
the face sampling as the drifting proceeds.
15.0
ADJACENT PROPERTIES
In addition to the prospects present on the Don Roman concession group, there are several
significant properties within 10 kilometers. Several of these are controlled by American
Metal Mining and a few are not.
Santo Tomas -- The most important property not controlled by American Metal Mining is the
Santo Tomas porphyry copper system, which is located approximately 5 kilometers to the
east. This is a moderately large low grade copper deposit which was drilled by ASARCO
and others over the past few decades. The published resource (Barton, et.al., 1995) was 250
million tons grading 0.45% copper and 0.05 grams gold per ton. It is a quartz monzonite
hosted system with typical alteration and metal zoning and is dated at 57.7 Ma.
The most significant aspect of Santo Tomas for the Don Roman project is that there are
several Cu-Au and Pb-Zn-Ag prospects and abandoned small mines on the north and west
sides of the system. Santo Tomas is close enough that the quartz monzonite body, or related
but unexposed smaller intrusions, may well have been the source for the metals at Don
Roman and other nearby Zn-Pb-Ag deposits similar to it. Some of those other deposits may
prove to be minable as well.
La Reforma – The La Reforma district is 9 kilometers north and 3 kilometers east of Don
Roman. It is a Zn-Pb-Ag-Cu district where the major mining company Penoles got its start.
It is probably related to intrusive rocks of similar age to Santo Tomas. A company named
Pan American Gold controlled and explored the property as late as 2006. This is not
controlled by American Metal Mining.
Sanaloya Group -- The Sanaloya group of concessions is centered approximately 7
kilometers north and 9 kilometers west of the Don Roman mine on the north side of the
Donaldo Colossio Reservoir. This concession group is controlled by American Metal
Mining. A 5000 hectare concession called Sanaloya has been denounced to tie together the
seven smaller concessions. Except for the Centenario concession, all are wholly owned by
American Metal Mining. The Centenario has a payment schedule which will be completed
on November 28, 2012 (unless paid off earlier) which totals $1,814,049 including IVA taxes.
29
El Mono -- An attractive prospect in the Centenario group is the El Mono structure. It is
covered by the El Mono, El Mono II and El Sol concessions. The author did not visit this
target. It is said to be (R. Trevizo – personal communication) a sub-vertical structure several
kilometers in strike length with selected samples ranging up to 400 g/t silver, 8% lead and
7% zinc. Clearly this structure seems highly prospective and requires geologic mapping and
detailed sampling. A sample from the nearby La Reyna concession contained similar metal
values.
Centenario -- The Centenario and El Oro concessions were visited by the author in the field
on June 12, 2009. The first of these visited was the Centenario gold mine. There are three
exposures of mineralization over a strike length of 800 meters. The author saw only the main
workings and a 12-meter short adit 50 meters
to the southwest. The main workings crosscut
approximately 45 meters to the vein, which ha
Figure 15.1 Sanaloya Concession Group
Figure 15.2 Centenario Vein in Mine Pillar
has been stoped over an extent of perhaps 15 meters vertically and 20 meters horizontally.
Here the vein strikes N35W and dips 35 to 45 degrees to the southwest. The width of the
structure including shear zones on both the hanging wall and foot wall has a maximum
visible width of 3 meters. The project geologist said that the quartz vein material carried
very good gold values, up to 17 grams per ton, but the sheared material (without quartz)
generally carried less than 1 gram gold per ton. It also contains as much as 8% copper and
400 grams silver per ton. The quartz vein material which carries most of the gold, was seen
to vary in thickness from 0.5 to 1.5 meters in width and contained about 15% oxidized
material after sulfides. No visible gold has been observed, even in the higher grade samples.
There is a second adit driven about 10 meters below the main adit. It was inaccessible at the
time of the author’s visit, but is said to have not yet reached the vein. In the 12 meter adit a
short distance to the west, the vein structure strikes N20E and dips 35 degrees to the west. It
30
carries 4.5 g.t gold here plus 2% copper and 35 g/5t silver. In this adit the vein is an intense
stockwork of 1 centimeter quartz veinlets in smashed andesite that is somewhat silicified. It
is sufficiently different in appearance from in the main workings that it may be a sub-parallel
structure, rather than the main vein.
The Centenario gold-copper vein structure could be a very significant deposit due to its high
grades in gold, copper and silver. It will need systematic underground sampling and
additional surface exploration in the form of mapping, trenching and sampling. Drilling is
needed to test continuity of mineralization along strike and down dip. Alternatively, it would
not be difficult to mine a few hundred tons from the existing stopes as a bulk sample. Access
will not be difficult. An old road leading north to the prospect from the small town of
Tacopaco can be quickly rehabilitated with a small bulldozer, and it could also cut
exploration trenches.
El Oro -- The second area of interest is the El Oro Fe-Cu-Au prospect. It is located
approximately 800 meters to the southwest of the Centenario gold vein. It is exposed beside
the access road in small prospect pits. It is said to extend for approximately a kilometer to
the northwest nearly to the northern arm of the reservoir. Where it is poorly exposed near the
road, the prospect appears to be a 5 to 10 meter wide zone that varies from massive fine
grained specular hematile to a variably intense stockwork of specularite with minor oxide
copper-stained quartz, hosted in andesitic volcaniclastic rocks. It may be a stratiform,
roughly tabular zone in the volcanic section, but mapping is needed to confirm that. Limited
sampling indicated that it has up to 67% iron, with erratically distributed copper values to 4
percent and up to 6 grams of gold per ton. Gold and copper correlate well in the samples,
suggesting that they probably occur in an unoxidized state as chalcopyrite or bornite.
Table 15.1 Centenario Concession Group
Name
Title #
Hectares
Sanaloya
El Mono
La Reyna
Centenario
La Verde
El Mono II
El Sol
El Oro
114270
229013
229014
229015
230121
231261
231262
pending
5000
100
100
400
400
200
200
600
The El Oro Fe-Cu-Au prospect is quite intriguing. If it is indeed stratabound and extends for
a kilometer or more along strike and maintains a thickness of 5 to 10 meters or more, it could
represent a very large resource. It could possibly be economically minable for the copper
and gold content alone. If the iron (specular hematite) could be concentrated to a sufficiently
pure product, probably by a selective flotation process, and markets established for it, this
should be a high value target.
31
At this point the Fe-Cu-Au deposit has almost no useful data except for the initial sampling.
It should be mapped and reconnaissance sampled along strike to establish length and
continuity. It should then be cut by several trenches across the zone to better expose the
mineralization and its geologic characteristics. Assuming the results of this work are
encouraging, drilling several exploration holes would test it in the third dimension and allow
an inferred resource calculation.
El Boleo – The El Boleo is a long abandoned mine situated at the northwest end of the large
area of altered limestone that includes the Don Roman mineralization. The author attempted
to visit it, but was unable to do so due to access difficulty and time constraints. It exploited
high grade Zn-Pb-Ag-Cu mineralization in skarn in the same limestone unit as that at Don
Julian. Negotiations are in progress to visit the old workings, review any available data and
possibly acquire control of the property, if it is as appealing in the field as it is in the
literature.
16.0
MINERAL PROCESSING AND METALLURGICAL TESTING
American Metal Mining commissioned a program of metallurgical testing and plant design
for the Don Roman mineralization. This was done by CIMAV (Centro de Investigacion en
Materiales Avanzados, S.C.) from Chihuahua City, subcontracted by Mining M21. S.A. de
C.V. also of Chihuahua City. The results are contained in the M21 report dated August 2007
(Flores, et.al., 2007), and in a final report by CIMAV (Castillo. Et.al., 2007) dated November
2007. Additional discussions after this work resulted in a somewhat modified processing
flow sheet.
16.1
Metallurgical Testing
The first step was characterization of the ore minerals using chemical analysis, x-ray
diffraction and microscopic examination. The ore tested was a mixture of Zn-Pb-Fe sulfides
and oxides. The primary sulfide minerals were sphalerite, galena, pyrite, with minor
chalcocite and arsenopyrite. The relevant oxide zone mineral species were smithsonite (Zn
carbonate) and cerrusite (Pb carbonate) and minor malachite. In these samples the zinc
minerals were 48% oxide and 52% sulfide; the lead minerals were 25% sulfide and 75%
oxide. As mining penetrates deeper away from the surface, the percentage of oxide material
is expected to decrease.
The second step was to determine the density of the ore. Samples were crushed to 100
percent minus 100 mesh and dried at 90 degrees centigrade for 24 hours. An automatic
pycnometer, using 2-propanol as the medium and distilled water as a reference measured the
density. This averaged 2.96 grams per cubic centimeter. At this stage they also determined
the work index of the ore in regard to crushing and grinding. The work index for crushing
was 15.895. The work index for grinding was found to be 9.7. Both of these are mid-range
values for this work, meaning that crushing and grinding of this material will not be notable
difficult or costly.
32
The third step was flotation testing. Several variations were used, the best of which produced
a very favorable response for lead and for zinc. The lead sulfide concentrate contained
60.29% lead and 5.822 kilograms of silver. The zinc sulfide concentrate contained 57.7%
zinc. Both were described as marketable concentrates. The flotation recovery was 33.9% of
the available silver, 42.3% of the available lead and 40.0% of the available zinc – as sulfides.
The tails from the flotation process, with contained metals largely as oxides, needed to be
treated with a different process. A sulfurization process was tried, but it was marginally
satisfactory as tested. Gravity separation on a shaker table proved to be a better option.
Because of the density difference between cerrusite (6.55) and smithsonite (4.5) and the
much lighter other minerals, then a gravity separation was feasible.
Paraphrasing from the CIMAV report (in Spanish, Castillo, et.al, 2007, p.56), the integration
of the processes of flotation of sulfides followed by a phase of gravimetric separation on a
shaker table of the flotation tails showed that recoveries could be significantly increased.
This worked for both zinc and lead and produced two acceptable concentrates.
16.2
Processing Plant Design
Based on the metallurgical test work and review of process designs from other projects,
treatment parameters, flow diagrams, material balances, equipment lists and a conceptual
engineering plan were developed by M21. The processing flowsheet and the plant design
evolved somewhat between the time of the M21 and CIMAV reports and the beginning of
construction, as is commonly the case.
As described to the author by the president of American Metal Mining, R. Trevizo, the
processing plant as constructed is designed for a maximum 500 tons per day capacity and
would normally be run at 80% of capacity, or 400 tpd. It is designed with three identical
processing circuits for the sake of flexibility – so that it could handle ore from more than one
mine at the same time, if desired. The mill was constructed on a 30 hectare site which was
purchased outright by the American Metal Mining
Broken ore is fed first to a 24 by 36 inch jaw
crusher with a single deck 8 by 20 foot
screen. Crushed ore is fed by conveyor to a
36 inch short head cone crusher in a closed
circuit to produce a minus 3/8 inch product.
This material is passed by a mobile
conveyor to any of three 80 ton capacity ore
bins which feed the three grinding and
processing circuits. Each circuit has a 6 by
6 foot ball mill which reduces the ore to a
minus 150 mesh size. This fine material
then passes over an 8 by 16 foot
concentrating table which produces a gold
concentrate, and a lead-silver (cerussite)
Figure 16.1 Process Plant In Construction
33
concentrate. The shaker table tails go to a conditioning tank where they are sulfidized to
convert more of the zinc minerals to sulfides and enhance zinc recovery.
The conditioner tank feeds a 7 by 9 foot primary flotation flash cell. This produces a lead
(plus silver) sulfide concentrate which goes to a cleaner flotation cell and then to the drier.
The tails go to a secondary flotation cell to produce additional lead concentrate (as above).
From this the tails go to another set of zinc flotation cells with a conditioner, primary and
secondary cells and a cleaner cell to produce a zinc concentrate (plus a little silver).
Concentrate are then dried, loaded and shipped.
The plant was connected to the electrical grid near the end of June 2009 and the plant was
nearly ready for shake-down testing before starting commercial production. At this point in
time, metallurgical recoveries remain speculative. After a few weeks of operation, there will
be actual records of production and actual recovery figures to guide refinements of the
system.
17.0
MINERAL RESOURCE ESTIMATE
17.1
Historic Resource Estimates
There are no historic resource estimates which would conform to NI-43-101 standards.
Any such estimates must have relied on very limited sampling of small underground
workings and projections from them. There has been no historic drilling at Don Roman.
In the three examinations of the property by the Consejo de Recursos Minerales in 1990,
1994, and 1996 the workings were sampled, but there were no resources calculated. The
following is translated from the M21 report (Flores, 2007, p.35) – “considering the
scarceness of existing workings and the irregular shape of the mineralized body, it is
technically complicated to block out mineral resources; not withstanding the visit made to
this mine, observing the exposed mineralized body and taking into account the
dimensions of the workings, reserves are estimated on the order of +/- 14,000 tons as
inferred mineral resources with probable grades of 186.12 g/t Ag, 1.61% Pb and 5.34%
Zn. Blocking this out results from inferring 10 meters in all directions from the existing
workings. The grades result from the arithmetic average of all of the samples taken from
the interior of the mine, without discarding any.”
Obviously the above can only be considered an unsupported estimate, based on very little
data.
17.2
Current Resource Estimates
There is no current resource estimate that is significantly more reliable than that given by
the M21 report quotes in section 17.2. As of late June, American Metal Mining had
somewhat expanded the volume of the mine workings and had begun a drift to the
northeast in ore grade mineralization and a first crosscut perpendicular to it. The
34
program for the next few months calls for driving the drift for at least 200 meters with
crosscuts at 25 meter intervals and fan drilling of the mineralized body at each crosscut.
The completion of this work is expected to produce sufficient data in three dimensions to
enable the calculation of a reliable resource.
At the time that this report was written, there is insufficient data to calculate any resource
which would be well documented or of significant size.
18.0
MINERAL RESERVE ESTIMATE
No reserves were calculated in this study.
19.0
OTHER RELEVANT DATA AND INFORMATION
The author is unaware of additional information concerning the Don Roman project that is
pertinent to this technical report.
20.0
INTERPRETATIONS AND CONCLUSIONS
The author has reviewed the available Don Roman project data, has visited the site and has
reviewed sampling procedures and security. He believes that the data presented by Amercan
Metal Mining, S.A. de C.V. are generally an accurate and reasonable representation of the
Don Roman Zn-Pb-Ag project. Because of the limited area occupied by the mine workings
and the extremely difficult access for drilling from the surface, the direct approach of drifting
across the target zone and driving crosscuts at 25 meter intervals, followed by fan drilling
from the crosscuts has been chosen. This will result in a mineral resource which is well
defined in three dimensions.
From reviewing the underground exposures and sampling results as well as examining
limited surface exposures, the author has inferred that the Don Roman deposit is a
metasomatic, somewhat distal skarn, probably genetically related to the zoned Santo Tomas
porphyry copper system located less than 5 kilometers to the east or a satellite intrusive body.
The mineralization appears to be controlled by a favorable stratigraphic horizon near the base
of the limestone unit. Zn-Pb-Ag mineralization occurs as irregular roughly tabular mantos
and planar to chimney-like cross-cutting bodies related to small faults.
With the limited evidence at hand at this time, predicting the overall shape and size of the
deposit would be very conjectural. The ore bodies in such deposits can occur as several
separate bodies whose size and distribution is difficult to predict. After the underground
drifting and drilling program is complete, the picture will be much more clear.
The Don Roman deposit is only one of several similar Zn-Pb-Ag occurances in the
immediate area, many of which are controlled by American Metal Mining. Some of them
may prove to be as good as or better than Don Roman. There are also at least two veins very
close by with attractive gold values. The best known of these is Don Felipe. An access road
will be constructed shortly which will allow the cutting of trenches and cutting of bulk
samples.
35
The Sanaloya concession group is approximately 10 kilometers to the northeast from Don
Roman. It has at least three very attractive prospects – the Centenario Au-Cu-Ag vein, the El
Oro stratabound (?) Fe-Au-Cu prospect and the El Mono Zn-Pb-Ag vein. Restoration of
access roads to these will allow mapping, trenching and sampling of these, probably
including bulk samples for preliminary mill testing..
American Metal Mining has taken the somewhat unconventional approach of constructing a
processing plant early in the program. However it is anticipated that the ore derived from the
driving of workings to develop the Don Ramon mineralization will provide the cash flow to
pay for the processing plant, the development work and the resource calculation. At the
same time the several other properties can be advanced toward development and eventual
production as well.
At the time this report was written, the processing plant was essentially completed and the
underground development program had begun,
21.0
RECOMMENDATIONS
Because the resource to be defined by the underground development work at Don Roman
will be vital to the success of the project, it essential to develop systematic sampling and
mapping procedures and to document them well. Such a program is in place and will need to
be modified somewhat as experience is gained. Establishment of a rigorous assay data
quality control/quality assurance program will also be necessary.
The presence of an operating mill will also provide pressure to develop additional resources
quickly. The other development projects, such as bulk sampling at San Felipe, and the work
on the Sanaloya group of properties must be pushed forward rapidly to get them into the
development stream as soon as possible. With luck, the Don Ramon development work will
produce a resource sufficiently large to allow plenty of time for the development of the
others. Meanwhile, some attention must also be devoted to other acquisitions.
21.1
2009 Program and Budget
American Metal Mining plans to spend $950,000 in the remainder of 2009 at the Don Roman
project. The dual priorities are to define the resource at Don Ramon and advance the other
properties rapidly.
The planned expenditures at Don Roman are outlined below:
36
Table 21.1 Don Ramon Project Budget For 2009
Item
Processing Plant Equipment Purchase & Repair
Don Roman Mine Development
Other Construction – Buildings, etc.
Don Roman Exploration – Mine and Immediate Area
Don Roman Total
Cost
$300,000
$200,000
$150,000
$300,000
$950,000
In addition to the development and exploration expenditures at Don Roman, American Metal
Mining has budgeted $250,000 for the Sanaloya concession group. These funds will be used
to improve access, cut exploration trenches and carry out the first phase mapping and
sampling of the prospects, in an effort to trace and define the mineralization along strike from
known exposures.
37
22.0
REFERENCES
Alaniz-Alvarez, S.A., Nieto-Samaniego, A.F, 2007, Geology of Mexico (pg 455), Geological
Society of America Special Paper 422.
Barton, M.D., Staude, J.G., Zurcher, L., Megaw, P.K., 1995, Porphyry Copper and Other
Intrusion-Related Mineralization in Mexico, in: Pierce, W.P., Bolin, J.G., eds, Porphyry
Copper Deposits of the American Cordillera, Arizona Geological Society Digest, V. 20.
Bon, R. C., Alba H. A., 1994, Visita de Reconocimiento Complementaria a Los Fundos
Mineroa “Maria de Lourdes y Don Roman”, Cerca del Rancho El Nacimiento, Municipio de
Choix, Estado de Sinaloa, Consejo de Recursos Minerales, Residencia Sinaloa.
Bon, R. C., Bustamante, M. A., 1990, Visita de Reconocimiento al Fondo Minero “Maria de
Lourdes”, Cerca del Rancho el Mesquite Caido, Municipio de Choix, Estado de Sinaloa,
Culiacan, Sinaloa, Dieiembre de 1900.
Bustamante, M. A., Soberanes, B., Yanes, C. F., 1976, Estudio Geologico-Minero de
Reconocimiento en el PorcionNororiental del Municipio de Choix, Estado de Sinaloa,
Consejo de Recursos Minerales, Residencia de Sonora.
Castillo, P., Pecina, E.T., 2007, Informe de Ingenieria Basica Para Un Proyecto de
Installacion de Una Planta de Beneficio de Minerales Por Flotation Perteneciente a la
Compania Minera Mining 21, S.A. de C.V., Diciembre 2007.
Castillo, P., Pecina, E.T., Torres, E., Miranda, S.V., 2007, Estudio de Caracterizacion y
Experimentacion Mutalurgica de un Mineral Natural Denominado Cabaza General, Remitido
por la Compania M21, S.A. de C.V. , Noviembre 2007
Cespedes, J. D., Bon, R. C., Alba, H. A., 1996, Estudio Geologico Minero de LosLotes Don
Roman y Maria de Lourdes, Municipio de Choix, Estado Sinaloa, Consejo de Recursod
Minerales, Residencia Sinaloa.
Flores, F. A,, Gonzalez, A. M., Hernandez, a., Castillo, P., 2007, Informe Technico
Especializado de Lote Minero “Don Roman”, en el Municipio de Choix, Estado de Sinaloa,
M21 S.A. de C.V., private report for American Metal Mining, S.A. de C.V.
Megaw, P.K.M., Ruiz, J., and Titley, S.R., 1988, High Temperature Carbonate-hosted AgPb_Zn(Cu) Deposits of Northern Mexico, Economic Geology V.79, p. 883-901.
Meinert, L. D., 1993, Skarns and Skarn Deposits, in Sheahan, P. A., and Cherry, M. E., Ore
Deposit Models, Volume II, Geoscience Canada Reprint Series, Geological Association of
Canada.
Singer, Berger and Moring, 2008, Porphyry Copper Deposits of the World: Database and
Grade-Tonnages Models, USGS Open File Report 2008-1155.
38
2004, Carta Geologico-Minera, Tasajeras G12-B59, Sinaloa y Chihuahua, Secretaria de
Economia, Mexico.
Urquiri, Araceli, 2008, Reporte Prelminario del Projecto Don Roman, Internal Report,
American Metal Mining.
39
23.
DATE AND SIGNATURE PAGE
Dana C. Durgin, CPG
Reno, Nevada July 18, 2009
40
24.
CERTIFICATE OF AUTHOR
I, Dana C. Durgin, do hereby certify that:
1. I am Principal Geologist of Delve Consultants, 2881 Fargo Way, Sparks, Nevada, USA 89434
2. I graduated with a degree in Geology from Dartmouth College in 1970. In addition, I obtained a
Masters Degree in Geology from the University of Washington in 1972.
3
I am a member of the American Institute of Professional Geologists (CPG #10364), a Registered
Professional Geologist in Wyoming (PG-2886), and a member of the Geological Society of Nevada.
4
I have worked as a geologist for a total of 35 years since my graduation from university.
5. I have read the definition of “qualified person” set out in National Instrument 43-101 and certify that
by reason of my education, affiliation with a professional association (as defined in NI 43-101) and
past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of
NI 43-101.
6. I am responsible for the preparation of all sections of the technical report titled “Technical Report,
Don Roman Project, Municipality of Choix, Sinaloa, Mexico”, dated July 18, 2009, relating to the
Don Roman property. I visited the Don Roman and Sanaloya site June 9 - 12, 2009.
7. I have no prior involvement with the property that is the subject of the technical report.
8. I am not aware of any material fact or material change with respect to the subject matter of the
Technical Report that is not reflected in the Technical Report, the omission to disclose which makes
the Technical Report misleading.
9. I am independent of the issuer applying all of the tests in section 1.5 of N. I. 43-101.
10. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been
prepared in compliance with that instrument and form.
11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority
and any publication by them for regulatory purposes, including electronic publication in the public
company files on their websites accessible by the public, of the Technical Report.
Dated this 18th day of July 2009.
Dana C. Durgin
41

Don Roman 43-101 Report - Tara Gold Resources Corp.

Transcription

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