Aurea Norte Technical Report

GEOLOGICAL REPORT AND SUMMARY OF FIELD EXAMINATIONS,
AUREA NORTE PROJECT,
Municipalities of
Apaxtla,
Cocula and,
Cuetzala del Progreso
GUERRERO STATE,
MÉXICO
SEPTEMBER 30, 2009
R. A. Lunceford, M.Sc., CPG
761 Aspen Trail
Reno, NV 89519
Prepared for
NEWSTRIKE CAPITAL INC.
2000-1066 West Hasting Street
Vancouver, BC V6E 3X2
In Compliance with NI 43-101 and Form 43-101F1
TABLE OF CONTENTS
GLOSSARY OF TERMS.................................................................................... VII
CONVERSIONS ................................................................................................. IX
0.0
SUMMARY................................................................................................ X
1.0
INTRODUCTION AND TERMS OF REFERENCE.....................................1
2.0
RELIANCE ON OTHER EXPERTS............................................................1
3.0
3.1
3.2
3.3
PROPERTY DESCRIPTION AND LOCATION .........................................2
Legal .........................................................................................................2
Encumbrances and Surface Rights ...........................................................7
Permitting ..................................................................................................7
4.0
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE,
AND PHYSIOGRAPHY ..............................................................................7
4.1 Location.....................................................................................................7
4.2 Accessibility and Infrastructure..................................................................8
4.3 Physiography.............................................................................................9
5.0
HISTORY .................................................................................................10
5.1 Chronology of Prospecting, Exploration, and Development in GGB........10
6.0
6.1
6.2
6.3
GEOLOGIC SETTING .............................................................................14
Tectonic Setting.......................................................................................14
Regional Geology....................................................................................18
Regional Stratigraphy ..............................................................................20
6.3.1
6.3.2
Teloloapan Subterrain ................................................................................. 20
Guerrero-Morelos Platform.......................................................................... 20
6.4 Structures ................................................................................................21
6.5 Property Geology....................................................................................26
6.5.1
6.5.2
7.0
Property Stratigraphy................................................................................... 28
Structures .................................................................................................... 29
DEPOSIT TYPES.....................................................................................31
8.0
MINERALIZATION ...................................................................................36
8.1
Mineralization and Alteration ................................................................37
9.0
EXPLORATION........................................................................................40
9.1
Exploration Methodology ......................................................................42
9.1.1 Geophysics.................................................................................................. 42
9.1.2 Photosat Alteration Study............................................................................ 50
9.1.3 Stream sediment survey................................................................................. 55
9.2
Exploration Targets ..............................................................................55
9.2.1
9.2.2
9.2.3
San Luis.......................................................................................................55
Rey David .................................................................................................... 60
La Morenita.................................................................................................. 61
II
9.2.4
9.2.5
9.3
Other GGB targets, showings...................................................................... 62
VMS showings.............................................................................................62
Anomalous Threshold Calculations ......................................................62
10.0 DRILLING.................................................................................................69
10.1 2005 Drill Program................................................................................71
10.2 2007 Drill Program................................................................................72
10.3 Discussion of Drill Results ....................................................................75
11.0 SAMPLING METHOD AND APPROACH.................................................76
11.1 Ground Magnetic Survey ......................................................................76
11.2 Stream sediment sampling survey........................................................76
11.3 Rock sampling ......................................................................................77
11.4 Drill Programs.......................................................................................77
11.5 Recommendations for QA/QC Protocols ..............................................78
12.0 SAMPLE PREPARATION, ANALYSES AND SECURITY........................78
12.1 Recommendations for QA/QC Protocols ..............................................79
13.0
DATA VERIFICATION .............................................................................80
14.0
MINERAL PROCESSING AND PROCESS TESTING .............................82
15.0
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ...........82
16.0
ADJOINING PROPERTIES AND PROSPECTS ......................................82
17.0
OTHER RELEVANT DATA AND INFORMATION....................................85
18.0
INTERPRETATION AND CONCLUSIONS ..............................................86
19.0 RECOMMENDATIONS ............................................................................87
19.1 Recommended Budget .........................................................................88
20.0
REFERENCES CITED............................................................................89
APPENDIX 1: STATEMENT OF QUALIFICATIONS AND CONSENT .............92
APPENDIX 2: AUTHOR SAMPLE ANALYTICAL RESULTS ............................94
III
FIGURES
Figure 1. GGB mineral concession location map. ........................................................................... 5 Figure 2. Mineral showing/prospects/targets and deposits on and near the AN Property. ............. 6 Figure 3. AN Property location, Guerrero State, Mexico................................................................. 9 Figure 4. Morelos Mineral Reserve, general geology and age dates........................................... 13 Figure 5. The Teloloapan and Guerrero-Morelos Tectonic Boundary,......................................... 16 Figure 6. Crustal shortening affecting rocks of the Upper Cretaceous and Palaeogene. ............. 17 Figure 7. AN Property (blue) along the northwest trend of the Guerrero Gold Belt. ..................... 19 Figure 8. Dike Orientation, Morelos Project, ................................................................................ 23 Figure 9. Structural Interpretation, Morelos Project,..................................................................... 24 Figure 10. An Early Laramide Tectonic model of deformation. ..................................................... 26 Figure 11. Reconnaissance scale geology map of the AN Property............................................. 27 Figure 12. Sheared calcite veinlets in limestone at the San Luis target. ...................................... 30 Figure 13. A Pacific Rim Model of Mineralization.......................................................................... 32 Figure 14. Tectonic setting for the formation of skarn deposits. .................................................. 33 Figure 15. Nukay geologic map with drill holes. ............................................................................ 34 Figure 16. Indications for VMS Mineralization............................................................................... 39 Figure 17. Milled and brecciated quartz clasts within a heterolithic breccia. ................................ 40 Figure 18. SGM Total Field Magnetic Contour Map...................................................................... 43 Figure 19. Composite Total Field Magnetics, AN Property. .......................................................... 44 Figure 20. Morenita Ground Magnetic Survey Grid Location Map............................................... 45 Figure 21. Total Magnetic Field, Morenita Grid. ............................................................................ 46 Figure 22. Vertical Magnetic Gradient, Morenita Grid. .................................................................. 47 Figure 23. Reduced to the Pole, Morenita Grid............................................................................ 48 Figure 24. Analytical Signal, Morenita Grid. .................................................................................. 49 Figure 25. Kaolin-Alunite Distribution, El Limon Deposit, Morelos Project.................................... 51 Figure 26. PhotoSat Target Locations.......................................................................................... 52 Figure 27. Alunite-Kaolinite Distribution Map, San Luis and Rey David Showings...................... 53 Figure 28. Alunite-Kaolinite and FeOx Distribution Map, Apetlanca and Morenita Showings. .... 54 Figure 29. Gold distribution from stream geochemistry on the AN Property................................ 56 Figure 30. Mineral showings, prospects, and targets on the AN Property................................... 57 Figure 31. El Coyote Claim geologic map. ................................................................................... 58 Figure 32. San Luis geologic map and gold geochemistry. ......................................................... 59 Figure 33. Rey David geology and gold geochemistry map......................................................... 60 Figure 34. Morenita geologic map and gold geochemistry. ......................................................... 61 IV
Figure 35. Morelos Project Geochemistry. ................................................................................... 63 Figure 36. Morelos Gold Outcrop Geochemistry.......................................................................... 64 Figure 37. AN Property regional outcrop gold geochemistry. ...................................................... 66 Figure 38. Drill hole location Map. Rey David and San Luis Showing. ........................................ 70 Figure 39. Properties, projects, and mineral deposits surrounding the AN Property. .................. 84 TABLES
Table 1. Mining concessions of the AN Property, Guerrero State, Mexico... Error! Bookmark not
defined. Table 2. Chip samples collected across the vein, Vianey Mine. ................................................... 38 Table 3. Anomalous Regional Outcrop Chip Geochemistry AN Property. .................................... 67 Table 4. Drill Collar Data. San Luis and Rey David drill programs................................................ 69 Table 5. 2005 Drill program assay results..................................................................................... 71 Table 6. 2005 drill program results. ............................................................................................... 72 Table 7. 2007 Drill program assay results..................................................................................... 73 Table 8. 2007 Drill Program........................................................................................................... 74 Table 9. Author rock chip and core sample descriptions and gold geochemistry. ....................... 81 Table 10. Resource estimate for the Campo Morado property. ...... Error! Bookmark not defined. Table 11. Recommended Exploration Budget AN Property........... Error! Bookmark not defined. V
VI
GLOSSARY OF TERMS
TERM
%
< Less than
> Greater than
1990382N
412132E
Adakite
Ag, As, Au, Bi, Co,
Ni, Cu, Fe, Hg, Mo,
Pb, Sb, Te, U, V,
and Zn
Aguacate porphyry
Alteration
Ana Paula
Anomalous
(anomaly)
Threshold
Aurea Norte
(Property or project)
Aurea Sur (Property
or Project)
Background
Blind exploration
target
Breccia
C$, US$
Calc-silicate
alteration
CRM
DDH
Edgar
Epithermal
FeOx
Filos Type
Fm
Georeferenced
GGB
GGB Style or Type
DESCRIPTION
Percent
Less than
More than
UTM grid measurement in meters north of the equator
UTM grid measurement in meters north of east of the central Meridian
A petrological term of some controversy. In this report it is used to describe a calc-alkaline igneous
intrusion of island arc affinity or provenance. Adakites are interpreted to be the product of hybridization
of felsic partial melts from subducting oceanic crust with the peridotitic mantle wedge during ascent
and are not primary magmas. They show the following geochemical and isotopic characteristics: SiO2
56 wt percent, Al2O3 15 wt percent, MgO normally <3 wt percent, Mg number 0.5, Sr 400 ppm, Y 18
ppm, Yb 1.9 ppm, Ni 20 ppm, Cr 30 ppm, Sr/Y 20, La/Yb 20, and 87Sr/86Sr 0.7045. (Richards, J.P.,
and Kerrich, R. 2007).
Chemical symbols from the periodic group of elements. silver (Ag), arsenic (As), gold (Au), bismuth
(Bi), cobalt (Co), Nickel (Ni), copper (Cu), iron (Fe), mercury (Hg), molybdenum (Mo), lead (Pb),
antimony (Sb), tellurium (Te), uranium (U), vanadium (V) and zinc (Zn).
An intrusion that outcrops in the Aguacate area of the AN Property, near the town of Apetlanca.
Physical and chemical changes to the original composition of rocks due to the introduction of
hydrothermal fluids, of ore-forming solutions, to changes in the confining temperature and pressures or
to any combination of these. The original rock composition is considered "altered" by these changes,
and the product of change is considered an "alteration". (From Hacettepe University online dictionary,
after AGI)
(A known mineralization centre). The most north-western gold-iron skarn occurrence located to date
within the Guerrero Gold Belt.
a. A departure from the expected or normal. b. The difference between an observed value and the
corresponding computed value (background value). c. A geological feature, esp. in the subsurface,
distinguished by geological, geophysical, or geochemical means, which is different from the general
surroundings and is often of potential economic value; e.g., a magnetic anomaly. (From Hacettepe
University online dictionary, after AGI)
Measured or calculated from a data series.
Means the contiguous group of claims totalling 59, 587.52 hectares and including the claims named: El
Coyote (T222224), Cosmos (T224813), Don Richard (T224743), Coyopancho (T223694), Cuetzala
(T224814), Morenita (T224383) and Don Jesus (T231105).
Means the contiguous group of claims totalling 21,742.42 hectares and including the claims named:
Ottawa (T221781), Consorcio (T222399), Durazno (T224953) and Vinatas (225449).
A measured or calculated geochemical, geophysical, petrological or other threshold considered
representative of an area. The "Normal" or "not anomalous".
Said of a potential mineral deposit that does not crop out at surface. Lies beneath a cover of rock or
unconsolidated material.
Means fragmental rocks whose components are angular and, therefore, as distinguished from
conglomerates as not water worn. May be sedimentary or formed by crushing or grinding along faults
or by hydrothermal explosions.
Canadian dollars, United States of America dollars.
An alteration consisting mainly of calc-silicate minerals
Consejo de Recursos Minerals (also Coremi). The former Mexican Geological Survey now renamed
the "SGM"
Diamond drill hole
Legally required American System for Electronic Data Gathering and Retrieval (EDGAR)
Said of a hydrothermal mineral deposit formed within about 1 km of the Earth's surface and in the
temperature range of 50 to 200 degrees C, occurring mainly as veins. Also, said of that depositional
environment.
Iron oxide
Similar environment to that found at the Filos Project, Guerrero, Mexico
Formation. A formal stratigraphic unit.
Recording X, Y, and Z Cartesian co-ordinates in accordance with a recognized grid referencing
system, in this case to a UTM grid using a WGS84 ellipsoid model.
The Guerrero Gold Belt. A linear array of gold-iron skarn and gold skarn developed at the contacts
between platform carbonate rocks and early Tertiary intrusions.
Conforms to a proposed model of mineralization for the GGB
VII
GIS MAPPABLE
Gm/Tonne or g/t
GPS
I.N.E.G.I.
Jasperoid,
Jasperoidal,
Jasperoid breccia
JV
Kb, kb
Limon type
Ltd, Inc
M, Ma, MT
m.a.s.l.
E14A87, E14C17
MgO, SiO2; K2O
Mineralization
(mineralizing)
oz, ppm, ppb, ºC,
mm, cm, m, Km,
2,
Km
N, S, E, W, NW, etc
No.
NQ Core
NSR
Nt
“on trend” or “on
Strike”
Paired Intrusion
pathfinder elements
PhotoSat
QA-QC
Red-ox boundary
S.A de C.V
S.A.B. de C.V
Sedar
SEDEX
SEMARNAT
SGM
Showing
Significant gold
intercept
Skarn
Target
Threshold
TSX, NEX
UTM Q14N
VMS
WGS84
Having measured or assigned Cartesian co-ordinates (X, Y, and Z) that can be used in GIS
(geographic information systems) software for data processing, plotting and interpretation. Where X is
easting, Y is northing and Z is elevation.
th
Grams per Tonne. Where a gramme (also gram) is a unit of measure equal to 1/1000 of a kilogram. A
Tonne is a metric Tonne having a unit weight of 1,000 kilograms.
An electronic device that records the data transmitted by the geographic positioning satellite system.
Instituto Nacional de Esdatística Y Geografía
Rock composed dominantly of silica, most commonly quartz that has formed largely by epigenetic
replacement. It is a common product of hydrothermal alteration of carbonate or carbonate rich rocks in
many mineralized areas and, in this usage, is commonly associated with iron oxide alteration.
Jasperoid differs from the term "jasper" which refers specifically to silicified limestone. Jasperoidal is
having the appearance of or is partially transformed to jasperoid. Jasperoid breccia is a breccia or
fragmental rock composed of jasperoid, either in the matrix and/or the fragments.
Joint venture
Kilo bar, an international unit of measure for pressure.
Similar environment to that found at the Limon Deposit, Morelos Project, in Guerrero State, Mx.
Limited, Incorporated
Million, Million years, Million tones
Meters above sea level
Mapping index system for Mexico
Magnesium, silica and potassium oxides respectively. Major rock forming chemical compounds.
The presence of minerals of possible economic value – and also the process by which concentration of
economic minerals occurs.
Units of measure: ounce, parts per million, parts per billion, degrees Celsius, millimetre, centimetre,
metre, kilometre and square kilometres.
North, south, east, west, northwest, northeast etc.
Number
Specifies the diameter of a cylinder of drill core, NQ has a 45mm diameter.
Net Smelter Return
Nano Tesla. The international unit for measuring magnetic flux density.
A definable geographic direction or orientation of strata, objects or occurrences.
Co-existing mafic (andesite-diorite porphyry) and felsic (quartz-rich granodiorite) intrusions.
Chemical elements used as a exploration guide or vector to potentially economic mineralization
High definition stereo satellite elevation mapping - A remote sensing exploration tool
A quality assurance and quality control program
The geochemical boundary between reducing and oxidizing chemical environment.
Sociedad Anónima de Capital Variable
Sociedad Anónima Bursatil de Capital Variable
Legally required Canadian System for Electronic Document Analysis and Retrieval (SEDAR)
A sedimentary exhalative model for mineralization
The Federal Mexican Environmental Protection Agency
Sociedad Geologíco Mexicano -The Mexican Geological Survey, a branch of the Federal Government
A location where alteration and/or mineralization occurs at surface.
Drill core intervals that assayed anomalous gold over one or more consecutive sample intervals.
A metamorphic rock rich in calcium bearing silicate minerals (calc-silicates), commonly formed at or
near intrusive rock contacts by the introduction of silica rich hydrothermal fluids into a carbonate rich
country host rock such as limestone and dolomite. Also, part of an alteration process for the
introduction and formation of ore forming mineralization and a common host for mineralization/ore.
A focus or loci for exploration
In geochemical prospecting, the limiting anomalous value below which variations represent only normal
background effects and above which they have significance in terms of possible mineral deposits.
(From Hacettepe University online dictionary, after Hawkes)
Toronto Stock Exchange, a division of the TSX
Universal Transverse Mercator Zone 14 north
Volcanogenic massive sulphides
An ellipsoid modal of the earth
VIII
CONVERSIONS
The following table sets forth certain standard conversions from the Standard Imperial
units to the International System of Units (or metric units).
To Convert From
Feet
Meters
Miles
Kilometres
Acres
Hectares
Grams
Ounce (troy)
Tonnes (T)
Short tons (t)
Grams per ton
To
Meters
Feet
Kilometres
Miles
Hectares
Acres
Ounces (troy)
Grams
Short tons
Tonnes
Ounces (troy) per ton
Multiply By
0.3048
3.281
1.609
0.621
0.405
2.471
0.032
31.103
1.102
0.907
0.029
Ounces (troy) per Tonne
Grams per Tonne
34.438
IX
0.0
SUMMARY
Newstrike Capital Inc. (“Newstrike” or “the Company”) was incorporated under the
Business Corporations Act (Alberta) in November, 2000 and continued to British
Columbia under the B.C. Business Corporations Act in 2006. The Company is a
reporting issuer in the provinces of British Columbia and Alberta, Canada. Its securities
are listed for trading on the NEX Board of the TSX Venture Exchange under the symbol
“NES.H”.
In June 2008, the Company acquired 100% of the issued and outstanding capital stock
of Aurea Mining Inc. and, through this, 100% ownership of its Mexican subsidiary,
Minera Aurea, S.A. de C.V (“Minera”). Minera holds a 100% interest within the gold
bearing oxidized iron skarn-porphyry camp of the Guerrero Gold Belt (the “GGB”) in
Guerrero State, Mexico. Newstrike’s 100% owned 59,587.62 hectare Aurea Norte
Property (“AN Property”) described in this Technical Report, was acquired through direct
staking by the original Mexican predecessor company and is subject to a 2.5% net
smelter royalty (NSR). Acquired at the same time and subject to the same terms, Minera
owns the Aurea Sur (21,742.42 hectares) Project located adjacent and south of the AN
Property. Both the AN Property and the Aurea Sur Project have comparable geology to
other gold occurrences and deposits of the GGB, some with proven ore reserves. This
Technical Report will present a compilation of exploration work carried out on the AN
Property between the year 2004 and 2009. Exploration results are summarized along
with recommendations and a budget for continued exploration.
The style of mineralization in the GGB is defined as a gold bearing iron skarn-porphyry
mineralizing system generated during an adakite intrusive event that emplaced a series
of stocks, dikes and sills into the Guerrero-Morelos Platform near the western boundary
with the Teloloapan volcano-sedimentary Subterrain. Emplacement occurred within
distensional openings created during relaxation of the compressional Late Cretaceous to
Early Tertiary Laramide Tectonic Orogeny. The deposits of the GGB occur within a
contact alteration halo formed about and within a series of intrusions of primarily tonalite,
monzodiorite, and granodiorite composition. The primary intrusions of importance to
mineralization are observed along a northwest-southeast trend that has become known
as the Guerrero Gold Belt or GGB.
Newstrike’s AN Property does not fall within any environmentally protected area. All
permissions and applications required in accordance with environmental regulations
have been complied with and can be viewed on file. Contractual agreements for surface
access to the mining concessions will require updating prior to re-initiating exploration.
Three different mineralizing environments are recognized on the AN Property:
1. A Jurassic to Lower Cretaceous volcanogenic massive sulphide (VMS);
2. The Guerrero Gold Belt Fe (Au, Cu) skarn-porphyry system of Laramide age;
3. A Tertiary, Ag-Pb-Zn (Cu) low sulphidation epithermal overprint.
The current focus of exploration is exclusively on the Fe (Au, Cu) skarn-porphyry system
and descriptions and interpretations within this Technical Report almost exclusively
pertain to this mineralizing event.
X
Regionally, late Jurassic through to Cretaceous stratigraphy assigned to two different
proposed subterrains underlies the AN Property including the Volcano-sedimentary
Teloloapan sub-terrain (“Teloloapan”), and the Guerrero-Morelos Platform sediments
(“Platform”). The boundary between the two subterrains bisects the AN Property roughly
in half from north to south. The western portion is favourable for a VMS environment
while the eastern portion is favourable for a GGB style of mineralization. The evolution of
the proposed tectonic boundary between the two subterrains is subject of an ongoing
academic debate summarized briefly in this report. The key observations from the
debate that are relevant to exploration include the following:
•
The GGB intrusions associated with gold mineralization share a similar
provenance in an calc-alkaline magmatic event of island arc affinity (adakite) that
varies 62 +\- 0.7 Ma in the southeast, to about 66.2 +\- 0.8 Ma to the northwest,
using K-Ar age dating, and 63 +/- 2 Ma using U-Pb.
•
A younger more alkalic intrusive event of around 30.0 +\- 0.2 Ma to 35.9 +\- 0.5
Ma using K-Ar age dating can form gold bearing skarn but is not yet associated
with known economic deposits.
•
Ages of the intrusions related to the district-scale GGB gold mineralization postdate the formation of the proposed boundary. Deformation of the proposed
boundary during the Laramide likely led to structural preparation and controls for
subsequent mineralization.
•
The implication of this from an exploration perspective suggests that if the
proposed GGB model for mineralization remains a valid model, then these
intrusions could be assumed to occur on either side of or “within” the proposed
tectonic boundary. Known gold bearing intrusions can be reasonably argued to
exist within this boundary (e.g. the Ana Paula gold discovery).
•
Gold mineralization occurs in a variety of settings in this environment where no
single deposit is exactly like another. The most productive environments
recognized to date for economically mineable ore bodies include contact skarn
(Nukay Mine), disseminated intrusion hosted skarn/porphyry (Los Filos), and a
combination of these two within a structurally controlled mineralizing environment
(El Limon).
•
All exploration targets on the property are blind (concealed) targets where the
primary indications for mineralization are from alteration and anomalous
geochemistry apparent in outcrop, especially at the early exploration stages.
Indications for mineralization occur as alteration in outcrop, and from pathfinder
geochemistry (Au, As, Sb, Hg, Cu, +/- Mo, Ag) and from structural and
geophysical interpretation. In the GGB the best pathfinder element for gold is
gold. This application of conceptual modelling, using structural, alteration,
geochemical, and mineralogic indicators leading to discovery, occurred at the
adjacent Filos and Limon deposits.
XI
Minera Aurea carried out exploration on the AN Property from mid-2004 through 2009
which included prospecting, selective regional and target mapping programs, various
geological, structural and petrological studies, collection of 1532 rock chip and stream
sediment samples, a ground magnetic survey, a PhotoSat alteration study, and 4,129
metres of core drilling in two programs.
Newstrike expended C$128,593 between September 30 2008 and October 1st of 2009
on mineral exploration expenditures, audited as of July 31st, 2009. The expenditures
were incurred on a review of all existing data, a database compilation, field and drill core
reviews and an exploration report incorporating all work completed since project
inception in 2004. Expenses related to the completion of this NI43-101 Technical Report
are excluded from this total.
The regional stream sediment survey returned various assay results anomalous in gold,
varying from a calculated lower anomalous threshold of 11 ppb gold to a best assay of
1,000 ppb gold. The strongest exploration target generated from this survey is
associated with PhotoSat target 4. Prospecting in the area suggests a VMS environment
may exist. There are, however, field indications of both mineralizing environments (VMS
and GGB) to occur near target 4 that will require further exploration. Expectations are
that a GGB type intrusion emplaced within a volcanic-volcanoclastic environment rich in
carbonates that may have the potential to produce a different style of gold deposit
compared to those currently known for the GGB.
In 2004, regional prospecting by Minera located three exploration targets conforming to
the GGB model that became the focus for Newstrike’s exploration programs: San Luis,
Rey David, and Morenita. Additional exploration targets, Apetlanca and PhotoSat targets
2 and 4 were located during subsequent exploration. These targets remain to be
mapped and sampled.
Outcrop chip sampling from the San Luis, Rey David, and Morenita showings returned
anomalous gold, which was followed up with grid sample programs to assist with drill
target definition. San Luis and Rey David are the more advanced exploration targets with
completed drill programs. Morenita is currently drill ready.
Alteration observed in
outcrop and in drill core from these three showings is consistent with the GGB
mineralization model and includes: phyllitic and argillic alteration, silica flooding, marble,
hornfels, garnet, amphibole, quartz, jasperoid, jasperoid breccias, magnetite, fluorite,
stibnite, realgar, oxidized iron skarn, veins of carbonate+/-quartz+/-clay+/-FeOx,
intrusion hosted stockwork, biotite, potassium feldspar, among others.
Anomalous outcrop assay results can vary from as low as 40 ppb gold, to the best assay
of 7.79 gm/Tonne gold from outcrop chips at the San Luis showing (the latter an average
of three repeat assays). Anomalous thresholds determined a “background” for outcrop
chip samples of 40 ppb gold for the AN Property. The background determined for stream
sediments is 11 ppb gold. Any assay results above background is considered
anomalous.
A total of 4,129.30 metres NQ diamond core drilling was completed in 21 drill holes,
focusing entirely on the San Luis and Rey David showings. The best intercept is from the
San Luis showing where drill hole SL003 intersected 1.11 gm/Tonne gold over a
XII
downhole length of 16.8 metres. Compilation and field checks of existing drill data is
required to advance the San Luis target to the next phase of drilling.
The large size of the AN Property combined with the indications of gold mineralization on
known exploration targets and the evidence from outcrops and limited drilling suggests
there is potential for multiple discoveries. Exploration results warrant continued drill
programs. Initial work will require a large scale aeromagnetic and reconnaissance
surveys. Secondly, two of the targets (San Luis and Morenita) will be advanced to a
carefully-targeted drill program and at least two new prospects (Apetlanca and PhotoSat
Target 2) are expected to move to a near drill-ready stage. A ten-month exploration
budget (C$700,000) to be completed by the end of the second quarter in 2010 is
sufficient to meet all mineral rights tax payments and assessment work obligations
through the final quarter of 2010 in accordance with Mexican Mining Laws. Budget
expenditures are staged over three parts to allow for receipt and assessment of results
which will guide exploration. The objectives and recommended methodology of the
exploration budget are outlined below.
1. Stage 1: Contract a 2000 line kilometre high-resolution airborne magnetic survey
to be flown over the eastern portion of the Aurea Norte Property. Interpretations
resulting from this important survey will assist in locating buried intrusions,
structural interpretation and drill hole planning.
2. Stage 2: Complete a compilation of the San Luis-Rey David database. This
includes alteration and structural mapping, re-logging of core, building new drill
sections and field checks of results. The existing database must be put into a
GIS mappable format.
3. Stage 3: Complete alteration and structural mapping of the Morenita-Aguacate
target and complete preliminary geologic mapping of the Apetlanca showing.
During this period, two new targets, the VMS and PhotoSat target 2 will be field
assessed as time permits.
4. Stages 2-3 will incorporate trench and grid sampling as required.
5. All new exploration programs initiated on the projects must incorporate GIS data
acquisition methods using the best practices exploration guidelines and QA-QC
procedures as outlined in Canadian National Instrument 43-101.
The successful conclusion of this work program (stages 1-3) will lead to a decision point
to allow for subsequent prioritized drill programs, tentatively anticipated for a late third
quarter start up.
XIII
XIV
1.0
INTRODUCTION AND TERMS OF REFERENCE
Preparation of this Technical Report was undertaken on behalf of Newstrike Capital Inc.
(“Newstrike” or the “Company”) in documenting the merits of the Aurea Norte Property (the
“AN Property”, ”Qualifying Property”, or “Property”) for compliance reporting and disclosure
requirements set forth in the Canadian Securities Administrators’ National Instrument 43101, Companion Policy 43-101CP, and Form 43-101F1.
This Technical Report is based on a foundation of extensive work programs completed by
various major, mid-size, independent, and junior mining companies including Newstrike
over the past 20+ years as summarized in annual and internal reports, geologic,
geochemical, and geophysical maps and published geologic reports pertaining to the
specific AN Property and near region. The author, Robert Lunceford a Qualified Person
under NI 43-101 requirements has especially benefited from discussions with Ms. Gillian
Kearvell, Vice President of Exploration for Newstrike and Sr. Jesús Castro Mora, Senior
Geologist of Minera Aurea, S.A. de C.V (“Minera”) the wholly owned Mexican subsidiary of
Newstrike.
Accompanied by Ms. Kearvell and Sr. Castro-Mora, the author conducted a field
examination of the AN Property on September 2, 2009 during which four rock chip samples
were collected from the San Luis, Rey David, and Aguacate exploration targets and two
core samples from the San Luis drill program.
2.0
RELIANCE ON OTHER EXPERTS
This Technical Report is an accurate representation of the status and geologic potential of
the AN Property based on the information available to the author and the field visit
conducted September 2, 2009. Gold targets within the AN Property are early-stage,
conceptual prospects and showings with some potentially economic grades collected from
outcrops and within limited core drill holes. This Technical Report is based on the author’s
personal familiarity with the AN Property and on a review and compilation of published and
unpublished geological, geochemical, and geophysical data obtained from corporate,
private, and government sources, and scientific journals and publications by multiple
authors. All sources of information cited are listed in the References section at the end of
this Technical Report. Data pertaining to the AN Property was collected by experienced
geologists, geophysicists, and technicians, consistent with acceptable industry standards
and provides a credible, reliable database. A Qualified Person supervised the work
programs conducted by Newstrike and its predecessor company (Kearvell, Personal
Communication, 2009).
An exploration work program, including but not limited to, re-logging of drill core, geologic
mapping, rock geochemical sampling, and possible trenching to enhance and define drill
targets at the San Luis and Rey David targets is planned for the next phase of work. The
results of the program will lead to a diamond drill program required to advance the AN
Property. In formulating recommendations herein, the author has considered the most
appropriate means of determining the true value of the AN Property.
1
It was not within the scope of this Technical Report to examine in detail or to independently
verify the legal status or ownership of the AN Property. Newstrike has made available to
the author certain information concerning the status of each of the mineral concessions
comprising the AN Property. The author has reviewed the relevant documents and has no
reason to believe that ownership and status are other than as has been represented, but
determination of secure mineral title is solely the responsibility of Newstrike.
3.0
PROPERTY DESCRIPTION AND LOCATION
Newstrike’s land holdings are located within a district scale mining camp that is host to
several producing mines for both a skarn-porphyry style of gold mineralization (the GGB
style of mineralization) and for a volcanogenic massive sulphide mineralization (gold,
copper, silver, lead, zinc). Historically, past production occurred on a small scale on several
low sulphidation epithermal narrow vein deposits for silver-lead-zinc, with minor past
production on local antimony and amethyst mines. These past producers are located for
the most part outside the AN Property boundary.
The metal of primary interest for exploration on the Newstrike’s land holdings is gold, with
additional potential for silver-lead-zinc and for volcanogenic massive sulphides that is not
the current focus of exploration. Figure 2 locates all known mineral showings on
Newstrike’s GGB land holdings and also identifies mineralization and deposits on adjacent
and internal claims owned by Newstrike. Newstrike’s primary objective is the gold potential
in the region and all exploration at this early stage has focused on identifying and
evaluating this potential on the Newstrike’s properties. This Technical Report presents a
summary compilation of all exploration activities to date on the AN Property.
Newstrike’s AN Property targets and showings represent early stage (or grassroot)
exploration projects that were acquired after regional prospecting including ground
reconnaissance and geologic mapping had identified favourable indicators for a GGB style
of mineralization in the area consistent with the model described in section 8.0. As well, at
least one exploration target has been located that is consistent with a volcanogenic
massive sulphide mineralization model. All showings are associated with a magnetic
and/or Photo Sat multispectral anomaly and were corroborated through the results of
surface outcrop chip sampling, grid, trench and/or stream sediment sampling, and by
drilling. While exploration has advanced significantly, all showings remain at an early stage
of exploration. The most advanced targets on the AN Property includes the San Luis and
Rey David showings where 21 diamond drill holes were completed for a total of 4,129.30
metres drilled. The results of these programs are discussed in the appropriate sections of
this Technical Report.
3.1 Legal
Newstrike Capital Inc. was incorporated under the Business Corporations Act (Alberta) in
November, 2000 and continued to British Columbia under the B.C. Business Corporations
Act in 2006. The Company is a reporting issuer in the provinces of British Columbia and
Alberta, Canada, listed for trading on the NEX Board of the TSX Venture Exchange under
the symbol NES.H.
2
In June 2008, Newstrike acquired 100% of the issued and outstanding capital stock of
Aurea Mining Inc. (“Aurea”) and, through this, 100% ownership of its Mexican subsidiary,
Minera Aurea, S.A. de C.V (“Minera”). Minera holds a 100% interest in nine mineral
concessions in Guerrero State, accruing 59,587.62 contiguous hectares as shown on Table
1 and located on Figure 1. The ownership of the mineral rights by Newstrike is subject to a
2.5% Net Smelter Royalty (NSR) due the former owner(s) of the concessions. Newstrike’s
obligation to pay a NSR to the original owners resulted from a February 18, 2008
agreement between Minera and the owner(s). Other than keeping the concessions in
good standing, no other obligations are due Newstrike as a result of the merger with Aurea
(Kearvell, 2009).
Mexican Mining Law requires an annual work assessment report and geological report in
accordance with the amounts invested in the concession and reported above a minimum
established annually. Work currently is in progress on the AN Property to comply with this
requirement (Kearvell, 2009).
Mexican Mining Law also requires certain mineral rights payments, due at the end of
January and July annually. A mineral rights payment for the AN Property of about
C$69,000 was completed by July 31st, 2009. The next mineral rights payments are due for
January 31st and July 31st, 2010 and is estimated at C$72,000 each half. This estimate is
included in the proposed exploration budget (Section 19.1: Recommendations, below). This
amount is subject to modification once annual mineral rights fees are released for
publication by the Mines Office. The mineral titles do not carry any other obligations.
The Mining Department in México (the Dirección General de Minas or “Dirección”) issued
new Regulations, by Presidential decree, regarding mining concessions effective from
January 1, 2006, whereby all the Exploration and Exploitation mining claims that existed in
good standing under the old system were automatically transformed to a unique type of
Mining Concession valid for 50 years, beginning from the date of their registration in the
Mining Public Registry. As a result of this decree, the expiry dates on some of the mining
concessions comprising the AN Property (Table 1) that were initially titled as exploration
concessions in 2004 and 2005 were automatically extended to conform with the new
decree and will now expire in 2054 and 2055 respectively. Under the new decree, all
claims in good standing are renewable for an additional 50-year term.
Title to mineral rights is granted through the Dirección General de Minas. The process to
acquire the rights is initiated by fulfilling all requirements of the mineral claims application
and filing the application along with the relevant application fees. The applicant is required
to build and label a claims monument within a specific distance of a property boundary,
must provide a location map of the area requested for mineral rights, must include a
description of local prominent features and provide the relative position with regards to
other adjacent and nearby pre-existing claims. Fees vary depending on the size of the
property in hectares and are updated and published annually in the Federal Official
Newspaper (El Diario Oficial). On acceptance of the application by the Dirección, applicants
then have 60 days to perform and file a legal survey as prepared by an official licensed
mines surveyor (a Perito Minero). The Dirección General de Minas investigates each
application prior to granting title to a claim, a process that can take a year or longer. Once
approved, and as of January 1st, 2006, title to the new Mining Concession is granted for a
50-year term, renewable. Mineral rights become payable from the date of title issue.
3
Title to mineral properties involves certain inherent risks due to the difficulties of
determining the validity of certain claims as well as the potential for problems arising from
the frequently ambiguous conveyance history characteristic of many mineral properties.
Newstrike has investigated title to all of its mineral properties and maintains them in
accordance with Mexican Mining Law. To the best of the author’s knowledge, title to all
properties is in good standing (Kearvell, 2009).
Table 1. Mining concessions of the AN Property, Guerrero State, Mexico.
MINING CONCESSION
APPLICATION
HECTARES
TITLED
NUMBER
EXPIRATION
EL COYOTE
Nov 28-03
13,535.84
Jun-15-04
222224
June-14-54
COSMOS
May-19-04
9,450.15
Jun-14-05
224813
June-13-55
DON RICHARD
May-27-04
1,722.06
Jun-07-05
224743
June-06-55
COYOPANCHO
Aug-25-04
5,351.62
Feb-03-05
223694
Feb-02-55
CUETZALA
Jun-15-04
18,522.25
Jun-14-05
224814
June-13-55
LA MORENITA
Oct-13-04
200
May-03-05
224383
May-02-55
DON JESUS
Nov-01-04
1,518.65
Jan-17-08
231103
Jan-16-58
ESTEFANIA
Nov-01-04
9,187.05
Jan-17-08
231104
Jan-16-58
ESTEFANIA FRACC. I
Nov-01-04
100
Jan-17-08
231105
Jan-16-58
TOTAL
59,587.62
4
Figure 1. GGB mineral concession location map. The Aurea Norte Property (this Technical Report) is shown in medium blue and the Aurea Sur
concessions to the south (light blue) are also owned by Newstrike. Adjacent and internal claims owned by companies other than Newstrike are
indicated by grey and yellow tones.
5
Figure 2. Mineral showing/prospects/targets and deposits on and near the AN Property.
6
3.2 Encumbrances and Surface Rights
Mining concession licenses do not grant surface access rights, given that they do not
convey property rights to the parcel of land involved. Mining concessions are governed by
Mexican Mining Law, which provides for the rights to carry out works and development
required of and for mining and related activities. Surface ownership can be Private, Ejidal divided under the Mexican Ejido System, and Communal or Collective property; Mexican
Agrarian Law governs all three types.
Newstrike is required in this regard to obtain
permission for surface access to their mining concessions to complete all exploration
activities on the Property from the affected communities and individuals. Because of this,
and while Newstrike cannot guarantee to have continual and unencumbered access to their
mineral exploration properties, signed contractual agreements were maintained on all areas
explored. As exploration proceeds, these access agreements are continuously updated as
a matter of Newstrike’s policy for maintaining good community relations (Kearvell, 2009).
Newstrike continues to maintain excellent community relations. As exploration progresses
to an advanced stage, Newstrike must seek long-term to permanent surface access
agreements, which may include long-term lease, option or other contractual agreement,
direct purchase of surface rights, or through embargo under the provisions of the Mining
Law, which holds precedence over Agrarian Law (Kearvell, 2009).
3.3 Permitting
Newstrike’s AN Property does not fall within any protected area. All permissions and
applications required in accordance with environmental regulations have been complied
with and can be viewed on file according to Kearvell (2009). There are no known existing
environmental liabilities on the AN Property. Furthermore, according to Mexican Federal
Law for the Protection of the Environment, existing environmental conditions caused by
past operations are not liabilities for the AN Property or its present owners. However, if the
Property advances to the development stage the Company will have to submit an
environmental impact statement and a risk analysis to SEMARNAT, together with an
application for a change in soil uses for industrial purposes (Kearvell, 2009).
4.0
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE,
AND PHYSIOGRAPHY
4.1
Location
The AN Property is located in the north-central part of the State of Guerrero in southern
Mexico, roughly half way between the major city centres of Mexico City and the Port of
Acapulco (Figure 3). The AN Property concessions within the GGB (“Guerrero Gold Belt”)
cover 607.23 contiguous square kilometres, after internal claims are removed.
7
Newstrike also controls the 217.74 square kilometre Aurea Sur project directly south and
adjacent to the AN Property. Newstrike’s entire land position in the GGB covers 824.97
contiguous square kilometres on two 1:50,000 scale I.N.E.G.I. map sheets, E14A87 and
E14C17.
The Balsas River forms a natural geographic barrier that separates the AN Property from
the Aurea Sur project. The AN Property centroid is located by UTM Q14N, WGS84,
410960.66E and 2004285.99N or by 99º 50’ 29.96’’ west longitude and 18º 7’ 32.19’’ north
latitude.
4.2
Accessibility and Infrastructure
The town of Iguala, with a population about 200,000 is a three-hour drive from Mexico City
and about four-hours from the port City of Acapulco (Figure 3). The AN Property
concessions are accessible from Iguala via paved highways and good all season unpaved
roads. Driving time from Iguala is about two-hours to the AN Property. Travel times are
decreasing as State programs continue to improve infrastructure, including paved and
updated highway access.
All major supplies and services are available from the cities of Iguala, Cuernavaca and
Chilpancingo, the state capital. Basic supplies are available from the local towns of Nuevo
Balsas and Cuetzala del Progresso, among other small town suppliers. The nearest
available national airport is in Cuernavaca, with international airports located at Acapulco
and Mexico City. Access and infrastructure varies from poor to moderate on Aurea Sur, to
very good on Aurea Norte. Water, hydroelectric power and a seasoned though unskilled
labour force is readily available to both AN Property and Aurea Sur project. The immediate
economy has been dominated by small scale or subsistence agriculture and agriculture
related services. That scenario is changing, as recent mining development projects
including Rey de Plata, Campo Morado, Limon and Los Filos have become the principal
regional employers.
8
Figure 3. AN Property location, Guerrero State, Mexico.
The AN Property is shown in blue and outlined in red. (Kearvell, 2009).
4.3 Physiography
Topography is rugged in the GGB, with elevations varying from 450m at the Balsas River,
rising abruptly to over 2200m at the highest peaks. The mountain ranges are divided by the
Balsas River into the Sierras del Norte and the Sierra Madre del Sur. Vegetation is
dominated by thorny plants and cacti at low elevations giving way uphill to patchy oak
forest and finally pine forest at the highest elevations. Vegetation is barren and desert-like
during the dry winter months, with lush tropical growth during the wet summer season.
The climate in the region is classified as warm and humid, with an average temperature of
28ºC (range of 17ºC to 45ºC) and average precipitation of 835 mm per year. Rainfall occurs
from June through October during a monsoonal tropical wet season that includes the
influence of hurricanes from both the Atlantic and Pacific oceans. Winters are dry with
occasional light rains in February. Guerrero is in a seismically active part of the country.
9
5.0
HISTORY
The history of exploration in the GGB and of the AN Property was summarized by Kearvell,
(2005, 2006, and 2009).
The GGB was originally defined by the political boundaries of the (former) Federal Morelos
Mineral Reserve (the “Reserve”), a roughly 19 by 26 kilometre or 46,700 hectare area
known for its historic small mining operations for “replacement bodies” with gold and
“fissure filling” vein silver. The boundaries of the original Reserve and a geology map are
provided in Figure 4 (page 13). Some of the internal claims not included in the Reserve
when it was formed are also shown on Figure 4. Today these internal claims make up the
Xochipala, Nukay, Bermejal and Los Filos projects and mines. Prior to privatization of the
Reserve through public Auction in 1998, the Servicio Geologíco Mexicano (“SGM”) divided
it into two parcels called the Morelos and Morelos Sur projects. Today the area is controlled
by Goldcorp Inc. (“Goldcorp”), Teck Resources Ltd. (“Teck”) (property interests are
currently being sold to Gleichen Resources Ltd.) and La Camera Mining Inc. (“Camera”)
and is subject to a 3% net smelter royalty payable to the SGM.
Prior to privatization of the Reserve in 1998, there were two joint venture agreements in
place - between Miranda Mining Corporation (“Miranda”) and Teck and Industrias Peñoles
S.A.B. de C.V. (“Peñoles”) and Newmont Mining Corporation (“Newmont”). These joint
ventures explored the Nukay, Filos and Bermejal projects. The first discoveries resulting
from modern exploration methods were announced by press releases in 1987 with
Peñoles-Newmont’s Bermejal project, and in 1997 with Teck-Miranda’s Los Filos project.
Following privatization in 1998, the former Reserve saw a significant increase in exploration
over the next four years, leading to several other new discoveries including then Grupo
Mexico’s (Grupo Mexico S.A.B. de C.V.) Los Calles and Mina Verde deposits (now Camera
Mining) and El Limon and Los Guajes deposits operated under the Teck-Miranda joint
venture (“JV”). The first mine went into production in 2008 at the Los Filos project, a
combination of the original Nukay, Filos and Bermejal discoveries after Goldcorp acquired
them.
5.1
Chronology of Prospecting, Exploration, and Development in GGB
The following chronology, summarized by Kearvell (2005, 2006, and 2009), of exploration
in the former Morelos Reserve is a general compilation of activities and should not be
considered complete.
1924 - The Franco Urias Family discovered gold at Xochipala in 1924. They operated a
small mine and mill intermittently until 1988, producing a total of 360,000 ounces gold.
1947 - The family owned Nukay Mine went into production in 1947 as a small underground
cut-and fill gold mining operation. Gold occurs in what was then described as manto and
fissure filling vein deposits and about 500,000 metric Tonnes of ore grading 18 gm/Tonne
Au (290,000 Au oz) were extracted between 1947 and 1964 (historical records).
10
1950-1960’s - Several small mining operations begin operating in the area, mostly for
epithermal Ag-Pb-Zn from high-grade narrow veins (El Anono Mine, Vianey Mine) and for
amethyst and antimony. The Todos Santos mine, a Au-Cu skarn was the first
disseminated, intrusion-hosted gold and copper discovery in the GGB. It was drill
delineated during this time by Minera Comicosa (“Comicosa”) under option from Compañía
Minera la Suriana S.A. De C.V. (“Suriana”). Suriana had previously operated the mine for
its Ag-Pb-Zn veins. While grades and reserves for that period are not available, in the last
five years of operation Comicosa did extensive exploration in an attempt to delineate
sufficient reserves for a 500 Tonne Per Day operation.
1977 - The 47,600 hectare Morelos Mineral Reserve was created during the Administration
of President Miguel de la Madrid. All claims in good standing in the area, including
concessions where the Nukay, Xochipala and Bermejal projects are currently located,
remained in the hands of private owners as did a few other small internal claims.
1977 to 1980's - The Consejo de Recursos Minerales (CRM) carried out considerable
regional and detailed work in the GGB including the area, which was to become the
Morelos Mineral Reserve. Beginning in the 1980's work included regional and detailed
mapping, airborne and ground geophysical surveys and compilations of all historical data.
1986 - Peñoles acquired rights to the Bermejal area and formed a joint venture with
Newmont. Aggressive exploration was carried out between 1986 and 1993.
1987 - Minera Nukay S.A. De C.V. (“Nukay”) acquired and expanded the original Nukay
Mine, which was then producing 100 tons per day from the underground mine workings.
During road building, discovery of high-grade gold skarn mineralization prompted opening
of the Nukay open pit. The Peñoles-Newmont JV announced the discovery of the Bermejal
gold deposit.
1993 - Nukay was taken over by Miranda. In 1993 a JV was finalized with Teck to explore
and develop the Nukay open pit mine and surrounding claims, the Teck-Miranda JV. The
Nukay plant was expanded, eventually reaching 400 tons per day.
1994 - The Peñoles-Newmont joint venture completed a prefeasibility study on their
Bermejal deposit. Continuing poor market conditions led to a negative feasibility decision
and Newmont terminated the JV. The Teck-Miranda JV discovered skarn and intrusion
hosted disseminated gold mineralization at Los Filos. Teck commenced an evaluation of
the Morelos Mineral Reserve when the Mexican government announced plans to privatize
all mineral reserves in Mexico through a lottery process. The Reserve, administered by the
government controlled CRM, was divided into North and South portions in preparation for
privatization through public auction.
1997 – The Teck-Miranda JV announced discovery of the Los Filos deposit. Miranda
discovers the Ana Paula prospect, the first GGB style discovery outside the boundaries of
the former Reserve.
1998 - The Servicio Geologíco Mexicano (SGM, formerly the CRM) privatized the Reserve
through public auction. Teck and Miranda formed a combined company, Minera Media
Luna S.A. De C.V. (MML) to bid for the Morelos Mineral Reserve with Teck as operator for
MML and majority owner at 78.2%. The Morelos North lottery was won by MML in July
11
1998 with a bid of US$3.12 Million dollars plus a 3% NSR (Net Smelter Return). Grupo
Mexico won Morelos Sur with a bid of US$4.02 Million.
2001 - Teck merged with Cominco to become Teckcominco (Teck). The Limon discovery is
announced for the Morelos Norte Project.
2003 - Wheaton River Minerals Inc (Wheaton) purchases 100% of Miranda for US$38.6M.
The agreement includes the Nukay mine, Miranda’s 30% interest in Los Filos and 100% of
other claims in the region (e.g. Ana Paula) as well as Miranda’s 21.2% Interest in the
Morelos North project. Wheaton also purchased Teck’s interests in Miranda, and in Los
Filos for US$48.4M. Teck retained their interests in the Morelos North project. Wheaton
now owns 100% of the Nukay and Los Filos Mines, 21.2% of the Morelos Norte Project and
the undeveloped Ana Paula prospect for a combined cost of US$87M.
2005 - Goldcorp bought Wheaton and announced the purchase of 100% of the Bermejal
Gold deposit from Peñoles for US$70M. Goldcorp announced a positive stand-alone
feasibility study for Los Filos. Final development decisions are deferred until a combined
feasibility study is complete for both Filos and Bermejal. Teck and Goldcorp are now the
partners for MML with Teck as operator. Industrias Miral S.A. de C.V. (Miral) forms Minera
Otawa S.A. de C.V (Otawa). the predecessor company to Aurea Mining Inc (Aurea) and
stakes claims on the northwest extension of the former Reserve that will become the AN
Property.
2005 - Aurea, combining former management from both Teck and Miranda is listed for
trading on the Toronto Venture exchange. Aurea begins exploration on the northwest
extension of the GGB. Early exploratory drilling on the AN Property by Aurea intersects
16.8m grading 1.11gm/Tonne Au.
2007 - Mine development at the Filos Project advanced to completion. Teck continues
delineating the Limon discovery on the Morelos Norte JV project.
2008 - Newstrike Capital Inc. (Newstrike) and Aurea Mining Inc. merge, becoming
Newstrike Capital Inc. The first mine goes into production at Goldcorp’s Los Filos project on
December 31, 2008.
2009 - Teck announced the sale of their 78.8% share in the Morelos Norte project to
Gleichen Resources Ltd for US$150 million and a share position totalling 4.9% interest in
Gleichen. Closure of the deal is pending due diligence at the time of this report.
12
Figure 4. Morelos Mineral Reserve, general geology and age dates. The map shows the distribution of some of the principal showings and
deposits throughout the former Morelos Federal Mineral Reserve and the relation of the deposits to the underlying intrusions. These intrusions
define the northwest trend of the GGB. Modified from a CRM geology map, date unknown (after Kearvell, 2009)
13
6.0
GEOLOGIC SETTING
6.1
Tectonic Setting
The area of the GGB is underlain by a tectonostratigraphic basement stratigraphy known
as the Nahuatl Terrain (Sedlock, et. al., 1993) and the greenschist facies Early Jurassic
Tierra Caliente Metamorphic Complex (Cabral-Cano, et. al., 2000). According to CastroMora (2009) the Tierra Caliente mega-terrain hosts a small area that could be truncated
into two major provinces: the Morelos-Guerrero Platform and the "Guerrero-Colima
Orogenic Complex" (after Ortega-Gutiérrez, et. al., 1992), in which the Teloloapan SubTerrain is located (Salinas-Prieto and Monod, 2000). The Teloloapan Subterrain and
Morelos Guerrero Platform form the dominant outcroppings on the AN Property (Figure
5) and may be considered underlain by the Tierra Caliente Metamorphic Complex.
The tectonic evolution of the proposed subterrains remains the subject of an academic
dispute that is summarized by Lang et. al. (1995), as follows:
“In the first modern plate reconstruction of Pangea, Bullard et. al.. (1965) considered
southern Mexico an anomaly because of the apparent overlap of Mexico and South
America. Attempts to explain this overlap led to numerous ad hoc hypotheses, including:
(1) "arbitrary rotation" (e.g. Dietz and Holden, 1970, p. 4944) of most of southern Mexico
into the Gulf of Mexico or elsewhere prior to Jurassic time; and (2) the proposition that
"megashears" isolated most of Mexico from the rest of North America during various
stages of the evolution of the Caribbean, eastern Pacific and North America plates (e.g.,
Coney, 1978; Silver and Anderson, 1983; Burke, 1988; Gastil, 1991). Campa and Coney
(1983) added the suspect terrain hypothesis”…”which itself has been subjected to
numerous revisions (cf. Sedlock et. al.., 1993). According to Campa and Coney (1983),
the terrains of southern and western Mexico are exotic crustal blocks of uncertain
paleogeographic origin, that were accreted to the North America Plate in CampanianEocene time, during the Laramide Orogeny. But structural measurements reported by
Ratschbacher et. al. (1991) and Meschede et. al.. (1996) show that the terrains of
southern Mexico form tectonic elements integral to the mid-Cretaceous-Cenozoic
evolution of the southern North America Plate. These results are consistent with Ross
and Scotese's (1988) plate reconstructions that show no overlap problem and no terrain
accretion in southern Mexico since Early Cretaceous time. Thus, the Mesozoic
tectonostratigraphic evolution of the southwestern margin of the North America Plate in
Mexico is still in debate.”
Lang et. al. (1996) concluded from their work that
“Our mapping and tectonostratigraphic assessment of the Guerrero transect shows that
boundaries of three different versions of the Guerrero/Mixteca terrains and the
Arcelia/Teloloapan subterranes are normal stratigraphic contacts or faults. Across these
boundaries we found no major stratigraphic incompatibilities that would support the
existence of any of these terrains. Published paleomagnetic studies and crustal gravity
models also do not require that separate terrains and their boundaries exist in the area.”
14
Cabral-Cano et. al., in 2000, subsequently proposed that the stratigraphic units could be
attributed to normal volcanic and marine sedimentary deposition over an attenuated
crust. Moran-Zenteno et. al., in 2005 provided a summary of the disputed tectonic
structural setting based on documented evidence that illustrates proposed crustal
shortening during the compressional tectonics of the Laramide orogeny (Figure 6). The
complicated structural environment and the visual similarity between incompetent
sedimentary units at the outcrop level will continue to pose problems in resolution of this
dispute.
Whichever of the regional tectonic evolution theories may eventually become accepted accretionary, transitional, a combination, or some other, has implications for future
exploration since the ages of the intrusions related to the district-scale GGB style of gold
mineralization post-date the formation of the proposed boundary in the basement
stratigraphy. Any pre-existing structures or deformation of those terrains and the
proposed boundary will have played a role in controlling the emplacement of the
mineralizing intrusions. The implication of this from an exploration perspective on the
AN Property suggests that the relatively younger GGB intrusions could reasonably be
assumed to occur on either side of and even “within” any of the proposed tectonic
boundaries. In other words, they may be exposed primarily within the Platform sediment,
but there is no reason to assume they could not also have been intruded into
stratigraphy belonging to the Teloloapan sub-terrain. Expectations are that a GGB type
intrusion emplaced within a volcanic-volcanoclastic environment rich in carbonates has
the potential to produce a different style of gold deposit compared to those currently
known for the GGB. An example of a GGB style intrusions that may be reasonably
argued as occurring “within” this tectonic boundary include Goldcorp’s Ana Paula gold
discovery (Kearvell, 2009).
15
Figure 5. The Teloloapan and Guerrero-Morelos Tectonic Boundary, (after Megaw, 2005).
16
Figure 6. Crustal shortening affecting rocks of the Upper Cretaceous and Palaeogene.
Grey dashed lines indicate proposed frontiers of the tectonostratigraphic terrains after Campa and Coney, 1983 and Sedlock et. al.. 1993. The
Terrains are indicated by capital letters where: G= Guerrero; Mi= Mixteca; O= Oaxaca; J= Juárez; M=Maya; And X= Xolapa. The dashed lines
indicate the limits of outcroppings of the Pre-Mesozoic rocks and the discontinuous lines show where Palaeozoic rocks have been thrust over
Mesozoic rocks. The structures were compiled by 1) Montiel-Escobar et. al.. (2000); 2) Altamira-Areyán (2002); 3) Elías-Herrera et. al.. (2000); 4)
Salinas-Prieto et. al.. (2000); 5) Cabral-Cano et. al.. (2000b); 6) Rivera-Carranza et. al.. (1997); 7) Campa-Uranga et. al.. (1998); 8) Cerca et. al..
(2004); 9) Monroy y Sosa (1984); 10) Meneses-Rocha et. al.. (1994); 11) González-Ramos et. al.. (2001), References to which are found in her
report. The approximate location of the AN Property is highlighted in red. (after Morán-Zenteno et. al., 2005).
17
6.2
Regional Geology
The AN Property is situated in the northwest sector of the GGB. The TeloloapanPlatform tectonic boundary described in Section 6.1 divides the Property into two distinct
stratigraphic environments, each host to a different observed style of mineralization. The
western half of the project area, shown in blue on Figure 5, is underlain by the volcanosedimentary stratigraphy of the Teloloapan subterrain which hosts several known VMS
style massive sulphides deposits, including the Campo Morado-Campo Seco trend (La
Reforma, El Rey, El Largo, El Naranjo and the producing G9 deposits), and Rey de
Plata (Miranda-Gasca, 2001). The eastern half of the AN Property, shown in yellow in
Figure 5, is underlain by the Guerrero-Morelos Platform stratigraphy that is the principal
host for the gold mineralization associated with the GGB. The boundary between the two
is the disputed boundary discussed in Section 6.1 and whose exact nature and location
is still under dispute. To date, Newstrike’s exploration efforts have been focused entirely
on the potential to host a GGB style of deposit on the portion of the AN Property that lies
east of the proposed tectono-stratigraphic boundary (Figure 7).
The GGB is defined as a gold bearing iron skarn-porphyry mineralizing system
generated during an adakite intrusive event that emplaced a series of stocks, dikes and
sills into the Guerrero-Morelos Platform near the western boundary with the Teloloapan
Volcano-sedimentary Subterrain during relaxation of the compressional Late Cretaceous
to Early Tertiary Laramide Tectonic Orogeny. The deposits of the GGB occur within a
contact alteration halo formed about and within the series of intrusions of primarily
tonalite, monzodiorite, and granodiorite. The primary intrusions of importance to
mineralization are observed to outcrop for at least 38 kilometres through the district on a
northwest-southeast trend (Kearvell, 2009).
The host intrusions share a similar provenance in the adakite magmatic event of 63 +/- 2
Ma using U-Pb age dating. The K-Ar age dating suggests an age variation from about 62
+\- 0.7 Ma in the southeast, to about 66.2 +\- 0.8 Ma in the northwest. Adakite intrusions
are characterised by having an active island arc calc-alkaline geochemical affinity
(Gonzalez-Partida, et. al., 2003, and Lavresse et. al., 2004).
A second magmatic event around 30.0 +\- 0.2 Ma to 35.9 +\- 0.5 Ma is more alkalic in
composition. Despite the development of skarn alteration assemblages observed at the
contacts of the younger intrusions, studies conducted by Valencia Gómez, et. al., (2002),
suggest there is no relation between the younger intrusions and the mineralized deposits
in the region. Intrusions related to GGB mineralization occur in a predominantly
northwest trend of sills, dikes and stocks emplaced into the Guerrero-Morelos platform
sediments near its western edges.
18
Figure 7. AN Property (blue) along the northwest trend of the Guerrero Gold Belt.
19
6.3
Regional Stratigraphy
The following stratigraphy underlies the GGB and immediate areas.
6.3.1
Teloloapan Subterrain
Teloloapan subterrain includes an undifferentiated informal stratigraphy described by
Campa and Coney (1983) as “a sequence of andesitic volcanic and volcanoclastic
sediments interstratified with limestone, shale, and sandstone. The sediments have
yielded fossils of Late Jurassic and Early Cretaceous ages. No older basement is
presently known. The assemblage has been affected by low-grade regional
metamorphism and is quite severely deformed. Along the eastern margin of the terrain in
the State of Guerrero the volcanic and sedimentary assemblage is thrust eastward over
shelf carbonates of Cretaceous age that are part of the Mixteca Terrain platform. The
exact nature of the contact between the westerly lying Teloloapan subterrain stratigraphy
and the east lying Platform stratigraphy is the subject of the debate discussed in Section
6.1 of this Technical Report.
6.3.2
Guerrero-Morelos Platform
i. Morelos Formation
The Morelos Formation is a Mid-Cretaceous Albian sequence known to be at least 900m
thick, according to Werre, et. al. (1999). Cabral Cano Et.al. (1999) describe the Morelos
Formation to include miliolid-rich, Albian limestones and dolostones and include reefal
facies, massive wackestone, packestone and grainstone that contain miliolids, bioclasts,
intraclasts, as well as rudist banks, occasionally with chert. Strata are commonly
dolomitized and depositional environments span from toe of the slope to open platform
facies.
ii. Cuautla Formation
The Cuautla Formation was described by Werre, et. al. (1999) as a Late Cretaceous,
Turonian aged sequence from 0 to 30 meters thick, of pale grey, to grey weathered thin
bedded, locally laminated calcareous shale (marls), fine-grained limestone and rare
gypsum layers. The sequence was not widespread and considered peripheral or
transitional to the overlying Mezcala Formation. It was interpreted to lie unconformably
over the Morelos Formation locally as erosional windows, and locally appeared
transitional between Morelos and Mezcala Fms.
iii. Mezcala Formation
The Mezcala formation is a Late Cretaceous sequence of Cenomian to Maastrichtian
age consisting of yellowish weathering thin-bedded Flysch type calcareous shale,
siltstones and/or wacke and sandstones. The type section of this formation is found
along the Rio Balsas near the town of Mezcala, (Werre, et. al., 1999). Cabral-Cano
(1999) describes,
20
“A basal member of thinly bedded limestone or limey siltstone that grades upwards into
an upper member composed of a sequence of shale and sandstone, and minor
conglomeratic beds. Locally, as black shale and packestone or packstone and
intercalated monotonous dark gray shale with minor fine sandstone beds. Shale beds
may be thin (<2-3 cm) or thick (up to 60 cm). Axial plane cleavage is conspicuous in
thicker bedded intervals. The minimum thickness of the Mezcala Formation in the
Pachivia area is 2000 m. However, many small thrust faults and folds have probably
increased the apparent thickness of this unit. Thickness estimates elsewhere are 1300
m near Iguala (Gonzalez-Pacheco, 1991) and approximately 2,500 m near Mitepec, 100
km east of the study area (Lang et. al., 1996 in Cabral-Cano et. al., 1999).
iv. Intrusions
Calc-alkalic intrusive events of island arc affinity (Adakite) of 62 to 65 million years, or
Laramide age, are related to the gold mineralization in the GGB. They appear to form a
northwest-southeast trending highly differentiated series of porphyritic intrusions of
primarily tonalite, monzodiorite, and granodiorite compositions.
A second alkalic intrusive event includes predominantly dacitic dikes and intrusive
breccia and granite to porphyritic granite stocks, are dated at mid-Tertiary in age (30 to
36 million years).
v. Tertiary Stratigraphy
Undifferentiated volcanic-volcaniclastic’s, and terrigenous sediments, possibly related to
the Tilzalpotla and Balsas formations respectively as described by Werre Et.al. (1999)
occur as eroded remnants overlying the Teloloapan and Platform stratigraphy in
erosional discontinuity.
vi. Quaternary Stratigraphy
Localized, discrete remnants of poorly consolidated and deeply eroded lacustrine and
fluvial deposits are the youngest rocks to outcrop on the AN Property.
6.4
Structures
The structural history of the GGB displays complex deformation at a regional and
property scale. According to Kearvell, (2009) the interpretation of the structural setting
has evolved over the last fifteen years from a simple, essentially flat lying stratigraphic
package, to the currently recognized highly deformed structural environment. The
following history of deformation and intrusion and their relationship to gold mineralization
is summarized by Kearvell (2009):
Following discovery of gold at the Limon deposit on the Morelos Norte property (today
called the Morelos Project and owned by 78.8% by Gleichen Resources), Laird, (2000),
determined that the primary structures critical to both the emplacement of the intrusive
rocks and in controlling mineralization were dominated by an array of discrete high-angle
fault sets at each of the showings about the principal stock.
21
These faults are oriented east-west, northwest, and northeast, at the CML showing,
northwest and north-south at the Fundición prospect, and northeast and east-northeast
in the area of stockwork veining between the Fundición and El Limon showings.
Concurrent with that study, Johnson, (2000), completed a structural study of the multiple
dikes sets observed intruding the three principal fracture sets about the Limon intrusion
(Figures 8 and 9) and concluded that:
”The simplest interpretation that explains the origin of fractures that hosts all three dike
sets is east-west compression with associated or subsequent north-south extension
(Figure 8). This is consistent with the regional setting of Laramide deformation (Late
Cretaceous – Early Tertiary), which produced northerly trending folds on the scale of the
Morelos Reserve. East-west pure shear compression can produce east-west striking
normal faults and Riedel shears striking west-northwest (sinistral) and east-northeast
(dextral), as illustrated in (Figure 9). The Riedel shears rotate toward northwest and
northeast strikes with progressive deformation.
The widespread development of east-west dikes points to a component of north-south
horizontal extension but the local development of northwest dikes and probable sills or
laccolith-like stocks in the Encinos area requires at least local variation in the stress
regime.”
And that… ”Laramide east-west compression…into which quartz monzonite dikes were
emplaced during subsequent north-south extension or dextral transtension. Sills or
laccolith-like intrusions may have been emplaced earlier during folding of the sedimentary
country rocks and decoupling of the Cuautla and Morelos interface”.
22
Figure 8. Dike Orientation, Morelos Project, (Johnson, 2000).
23
Figure 9. Structural Interpretation, Morelos Project, (Johnson, 2000).
Martinez (2005) noted the timing of emplacement of the intrusions and the nature and
the location of the proposed boundary between the Teloloapan and Platform terrains
gave rise to two important questions. Did observed thrust faults pre-date or post-date
mineralization, and could deformation be related to Laramide compressional tectonics?
In 2005 Dr. J.C. Salinas Prieto of the SGM addressed these questions, concluding that
the contact between the platform sediments and the adjacent volcanic units was located
on the AN Property. He described the contact as being associated with a “progressive
deformation generated during the Laramide compressive orogenic event that varied from
ductile to semi-brittle with observed thrust faults which stacked the platform sediments.”
24
Johnson (2000) concluded …”the observed structures are consistent with simple shear
resulting from compressive forces in a semi-ductile environment, or at pressures of less
than 1000 kb and temperatures between 150º to 200º C. The deformation is interpreted
to have post-dated deposition of the Mezcala sediments, and pre-dated emplacement of
the intrusions which do not display any deformation.”
These studies in combination with field observation made throughout the exploration
history of the area led to the recognition of the key sequential deformational events
controlling GGB mineralization as summarized by Kearvell (2009).
•
Deformation began at the inception of east-west to northeast compression
generated during the Laramide Orogeny. Platform sediments were deformed into
a series of easterly to northeasterly verging thrust faults and low angle beddingparallel reverse and normal faults.
•
The combination of compression and north-south extension or dextral
transtension (Figure 10) produced easterly verging, north-south to south-westerly
trending, westerly dipping, tight to isoclinal overturned to recumbent folds. This
event is interpreted to have assisted in ground preparation in the form of
fracturing, faulting and brecciation of the country rock, creating structural traps
and permeable or permissive hosts. Evidence for isoclinal and recumbent folds
occurs throughout the region, including observed folds in Platform sediments,
and outcroppings of altered volcanic rocks interpreted as Teloloapan (?) on the
hilltops of Cerro Media Luna that overlie Platform sediments, to as far east as the
Atzcala Valley on the Morelos project where apparently flat lying graded
sediments indicate tops down.
•
Early compression and deformation led to initial ground preparation for the
introduction of the GGB intrusions. The pre-mineral sheeted intrusions of
andesite to diorite composition, observed throughout the GGB, may have been
emplaced at this time (including the Filos diorite?). These were injected as dikes
and sills along all pre-existing planes of structural weakness, with an apparent
preference for thrust surfaces, bedding planes or bedding faults (de-coupling
faults), and fold axes.
•
East west, northwest and north-northeast high angle faults displace the early
Laramide folds and faults. These later structures are interpreted as having
formed, at least in part, during relaxing of compressional forces towards the end
of the Laramide Orogeny. The dilational features formed at the intersection of
these structures are currently interpreted to be the principal controlling structures
for the vertical emplacement of the highly differentiated and hydrated gold
bearing GGB intrusions as stocks or laccolith like intrusions with associated sills
and dikes emplaced along lines of structural weakness. These intrusive events
may be related to the same magma source that drove the Teloloapan Island arc
and are dominantly granodiorite to tonalite in composition.
•
Subsequent shrinkage or cooling of the intrusions towards the end of the
orogenic and intrusive event has resulted in local collapse features, including
contact breccias and faults that also provided an additional depositional host
and/or conduits for mineralizing fluids.
25
•
The exact timing of gold mineralization is not known but is believed to be
associated with the final dewatering and subsequent cooling of the final intrusive
event, post-dating formation of the prograde skarn alteration assemblage.
•
Finally, younger Tertiary (Eocene to Oligocene) orthogonal block faulting
developed into a series of northeast and northwest crosscutting faults. In some
cases, faulting may have occurred along a re-activation of existing structures.
High angle northeast trending faults that host low sulphidation epithermal veins of
the GGB may be related to this later event. The Miocene onset and development
of the TransMexican Neovolcanic belt may be responsible for local observed
east-west transverse faults.
Figure 10. An Early Laramide Tectonic model of deformation inducing pre-mineral ground
preparation (in Kearvell, 2009).
In this environment the late-stage circulating gold bearing hydrothermal fluids are
developed in structural, lithologic and/or or geochemical traps (retrograde skarn facies).
First order exploration targets would be expected to occur proximal to vertically
emplaced stocks located in dilatant zones within Laramide faults and folds. More distal
secondary targets would be possible within anticlines, sheeted dikes or sills, lithologic
traps at permeability-porosity barriers, and within alteration fronts.
6.5
Property Geology
Only reconnaissance scale geologic mapping has been completed on the AN Property
and mostly on the eastern side (Figure 11). Consequently, stratigraphic and structural
details are poorly known, except around specific exploration targets, San Luis and Rey
David.
26
Figure 11. Reconnaissance scale geology map of the AN Property.
The green rectangle marks the location of the San Luis, and Rey David targets discussed under Drilling (after Hernandez-Contreras, 2007).
27
6.5.1
Property Stratigraphy
Kearvell has tentatively summarized stratigraphic units observed to outcrop on the AN
Property from oldest to youngest.
i. Teloloapan Volcanic-Volcanoclastic Rocks
The largely undifferentiated unit loosely assigned to the Jurassic-Cretaceous
Teloloapan tectonic sub-terrain outcrops on the western portion of the property. This
stratigraphy exists on the property as mafic (basalt to andesite) flows, pillowed flows,
breccias and pyroclastic rocks with interlayered intermediate to felsic tuff, lapilli-lithic
tuff and volcanic breccia, hyaloclastic textures are observed locally.
The mafic flows are locally interbedded with and overlain by a shallow to deep
marine sediment sequence including limestone (locally fossiliferous), siltstone and
shale, wacke, arkose, arenite, conglomerate and tuff. The uppermost thin bedded
phyllitic lutite unit, described by Werre, et. al. (1999) as belonging to the informal
Pachivia Fm, appears to be transitional and/or possibly synonymous with Mezcala
Fm. siliciclastic lutite.
ii. Morelos Formation
On the scale of the Property the Morelos Formation consists predominantly of
medium to thick bedded pale grey weathering, grey to dark grey limestone with local
beds of orange weathering dolomites. Grey, white to boudinaged black chert occurs
near the top of the sequence, along with a fossiliferous or reef facies carbonate, and
a recrystallized grainstone, siltstone, chert, packstone facies that frequently includes
karst dissolution features. Thin carbonaceous to nearly graphitic shale layers
observed in core are thought to occur as a deeper marine facies where phyllitic and
intense intrafolial deformation is observed suggesting this unit may be part of a larger
thrust or decoupling horizon. Mylonite and gouge occurring at the base of the
Morelos in this carbonaceous shale may belong to the underlying Xochicalco
formation, or may be due entirely to shear.
iii. Cuautla Formation
Since the upper contact of the Morelos Fm has been observed to be both transitional
and discontinuous (mostly structural?) with overlying sediments on the scale of the
Property, and because this transitional contact is rarely distinguishable as a distinct
and separate formation, Cuautla Fm. nomenclature has not been used nor
differentiated on the Newstrike’s GGB projects. This transitional contact remains an
important depositional environment for gold mineralization in the GGB that warrants
further investigation.
iv. Mezcala Formation
The Mezcala Fm. consists of yellowish weathering thin-bedded flysch-type
calcareous shale, siltstones and/or wacke and sandstones. The type section of this
formation is found along the Rio Balsas near the town of Mezcala (Werre, et. al.,
1999).
28
The formation is more calcareous near the base and is increasingly terrigenous or
siliciclastic up section where conglomerate is locally described near the top of the
sequence. This description is consistent with the outcrops observed on the Property
that were assigned to Mezcala Formation, however, the unit is increasingly deformed
and locally phyllitic to the west, near the proposed boundary with the Teloloapan
stratigraphy; and there is a possibility for mis-identifying this unit with similar units
from the older terrain.
v. Intrusive Rocks
Outcroppings of intrusions on the Property occurs primarily as a series of sills and
dikes that are emplaced in sheets along de-coupled bedding surfaces, bedding plane
faults, fold axes etc. Most intrusions are buried beneath cover and exploration
targets are blind (concealed) as at the Los Filos, El Limon, and Bermejal discoveries.
The alkalic intrusive event of mid-Tertiary age, ranging 30 to 36 million years old and
predominantly granite to porphyritic granite in composition. These may include the
sills and dikes of monzodiorite described on the property and age dating will
determine their exploration merit. Due to the distinct age difference of the GGB
mineralized intrusions, age dating becomes an important exploration tool when
selecting potential exploration targets.
vi. Tertiary Rocks
Undifferentiated volcanic-volcaniclastic’s, and terrigenous sediments occur as
eroded remnants, mostly on the western portion of the Property, overlying the
Teloloapan stratigraphy in erosional discontinuity.
vii. Quaternary Rocks
These rocks include local eroded remnants of poorly consolidated and deeply eroded
lacustrine and fluvial deposits.
6.5.2
Structures
As discussed previously, the proposed tectonic boundary between the Teloloapan and
Guerrero-Morelos Platform basement sub-terrains is approximately aligned north-south.
The nature of the boundary is still in dispute but on the scale of the Property it appears
to occur as an angular disconformity, possibly locally manifested as a high angle fault or
thrust surface.
In general, stratigraphy west of the boundary displays tight to isoclinal southeast verging
folds that dip moderately to the southwest. Locally, the structural fabric displays a series
of easterly to northeasterly verging thrust faults with associated north-south to northeast
trending recumbent fold axes. Subsequent high angle faults displace the folds into northsouth to northeast trending horst and graben structures, which are further displaced by
Tertiary orthogonal block faulting.
29
On an outcrop or target-scale, complex deformation mimics regional trends. Figure 12 is
illustrative of intense local deformation within brittle limestone of the Morelos Fm.
displaying complex extensional and subsequent compressional deformation.
Figure 12. Sheared calcite veinlets in limestone at the San Luis target.
30
7.0
DEPOSIT TYPES
The deposit model for gold mineralization in the GGB is associated with a Pacific Rim
style of mineralization described by Corbett (1998, 2009) (Figure 13). In the GGB, the
dominant style of gold mineralization is characterized by structurally controlled, oxidized
iron skarn-porphyry system of late Cretaceous to Early Tertiary age emplaced into the
carbonate-rich Platform sediments during the Laramide orogeny. The model is
described schematically in Figure 14, (after Meinert, 1993). Calc-silicate skarn alteration
originates as a contact metamorphic aureole alteration about hydrated intrusions. Gold
deposition is thought to occur primarily during a retrograde phase of alteration (Kearvell,
2009).
The exact timing of gold deposition and the mechanism of deposition within the GGB is
not yet fully understood. Evidence garnered by Newstrike geologists and other workers
in the GGB suggest that gold mineralization was deposited relatively late in the formation
of the skarn-porphyry system during final dewatering and cooling of the source
intrusions. Gold is invariably associated with fine stringers of silica +/- FeOx +/- clay +/carbonate stringers and/or with iron oxides alone and can be found in virtually every
environment as “leakage” fluids within conduits in permeable or permissive horizons.
Economically significant gold deposits frequently occur in clusters about a source
intrusion, such as seen at Nukay (Figure 15). Gold is concentrated into mineable bodies
within structural, lithological and/or geochemical traps.
Gold at Limon occurs at or near the transitional contact between the Morelos and
Mezcala sediments (also known as the Cuautla Formation), occurring in contact
exoskarn and endoskarn associated with parallel sheeted dikes off the primary Limon
stock or laccolith. At the Todos Santos Mine, magnetite co-exists with pyrrhotite and a
zoning can be mapped from magnetite to ilmenite within the main body of the intrusion
that suggests a change in the oxidation state of the intrusion (Kearvell, 2009). Gold can
also occur entirely within an intrusive host, such as Los Filos, where gold is hosted in an
older brecciated diorite porphyry sill previously intruded into Morelos limestone. The sill,
in this case, acted as a permeable host and trap for gold bearing fluids. Gold is
observed to follow pre-existing structural controls such as decoupled bedding planes,
fold axes, bedding plane faults, low angle and/or thrust faults, high angle normal faults,
intrusion contacts, contact breccia etc, examples of which can be observed throughout
the GGB.
31
Figure 13. A Pacific Rim Model of Mineralization.
This diagram illustrates the different styles of mineralization in a magmatic arc porphyry and epithermal Cu-Au-Mo-Ag system (Corbett, 2008).
32
Figure 14. Tectonic setting for the formation of skarn deposits in an accreted terrain model (Meinert, 1993).
33
Figure 15. Nukay geologic map with drill holes.
Note the clustering of gold mineralization about the adjacent Los Filos deposit (Kearvell, 2009).
34
Kearvell (2009) summarized empirical observations indicative of GGB style gold
mineralization.
•
Within contact exoskarn displaying retrograde alteration formed in isolated pods
about a source intrusion (e.g. Nukay Mine).
•
Jasperoid and/or magnetite skarn where retrograde alteration has destroyed
most of the original magnetite (e.g. Los Aguitas Mine).
•
Pyroxene-garnet skarn formed at the transitional contact between the Morelos
and Mezcala Fms. or associated with a series of sheeted dikes or sills (El Limon
deposit).
•
Intrusion-hosted quartz-FeOx stock work veining following high and low angle
structures and filling zones of brecciation proximal to the contact. This is
observed in varying degrees at all deposits.
•
Paired mafic and intermediate intrusions where earlier mafic intrusions become
the host for deposition of gold mineralization from fluids originating in later
intermediate porphyry intrusions (Los Filos Deposit).
•
Intrusion hosted Au-Cu bearing stockwork formed at the red-ox boundary where
magnetite-pyrrhotite and ilmenite co-exist. Garnet-pyroxene skarn follows
orthogonal fracture or jointing in the intrusion (Todos Santos).
•
As an “alteration halo“ with arsenopyrite and/or pyrrhotite in Mezcala sediments
displaying a strong hornfels alteration and intruded by a series of sheeted sills or
dikes (Fundición).
•
Pre-existing (?) high angle faults (Amarilla fault).
•
At the iron oxidized contacts of most intrusions, especially where the contacts
display faulting or shearing and brecciation. This is a commonly observed feature
throughout the GGB.
•
In low temperature silica +/- FeOx +/- clay +/- carbonate stringers and veinlets,
possibly a retrograde alteration phase. This is commonly found in the GGB
following fractures, micro faults, and lithological boundaries, within intrusion and
within sediments.
•
In breccia associated with bedding parallel faults (decoupling faults), or low angle
reverse faults, thrust faults and the axial planes of recumbent folds (Cerro Media
Luna, San Luis?). This too is commonly observed throughout the GGB and is
interpreted as leakage. It is unlikely to form a mineable body in the absence of a
suitable trap for the migrating hydrothermal fluids.
•
Gold is rarely found with magnetite skarn, clean marble, sulphide-poor hornfels,
coarse garnet skarn and brecciated but unaltered limestone, unless it’s
associated with silica-FeOx-clay coating fractures or filling stringers or other form
of retrograde alteration.
35
8.0
MINERALIZATION
According to Meinert (1993), plutons associated with Fe and Au skarn tend to be
enriched with MgO with lesser SiO2 and K2O. Common pathfinders elements that can
be used for exploration in this idealized environment can include Au, Ag, As, Sb, Bi, Te,
Hg, and more sporadically, Co, Ni, Cr, Cu, Pb, Zn and W. Recognition of distal alteration
features such as bleaching, fluid escape features (leakage) and isotopic halos can be
critical factors (Meinert et. al., 2005).
Exploration previously conducted and planned by Newstrike, has and will be focused
almost exclusively on Fe (Au, Cu) skarn-porphyry system within the GGB. Newstrike
geologists believe gold mineralization within the skarn zones is associated with
predominantly retrograde, structurally controlled and contact metamorphic alteration
assemblages. Observed alteration includes phyllitic and argillic alteration, silica flooding,
marble, hornfels, amphibole, quartz, jasperoid, jasperoid breccias, magnetite, garnet,
fluorite, stibnite, realgar, oxidized iron skarn, veins of carbonate+/-quartz+/-Clay+/-FeOx,
intrusion hosted stockwork, biotite, potassium feldspar, among others.
GGB gold deposits typically occur as blind (concealed) deposits and their location is not
always apparent from the surface environment. Kearvell (2009) has summarized key
mineralogic and alteration criteria useful as exploration guides when searching for blind
deposits in the GGB to include:
•
Re-crystallized limestone.
•
Incipient or passive brecciation with calcite matrix, especially with iron or
weak jasperoid associated.
•
Marble is a clear indicator that an intrusion is nearby. Very white, very
coarsely crystalline marble is common, darkening as it becomes mixed with
impurities, and/or where it displays evidence of ductile deformation (pytgmatic
veins, isoclinal folds, etc).
•
Sheeted fractures may show very fine magnetite, garnet or pyroxene
developed in otherwise unaltered rocks, which is especially evident in
Mezcala sediments and provides a vector to a buried intrusion.
•
Silica +/- iron oxide +/- clay minerals in stringers, as fracture fill, as a coating
on bedding planes or cleavage planes, or as small discontinuous pods are all
important indicators for buried deposits nearby in otherwise “dry” unaltered
rock.
•
Green pyroxene skarn appears to be distal, fine to coarse green pyroxene
and purple red garnet skarn is more proximal (purple and green spots), while
a very fine green garnet and green pyroxene (green skarn) is a common
endoskarn following orthogonal fractures or joints in the intrusion (Todos
Santos).
36
•
Magnetite skarn is typically a contact skarn, degrees of secondary or
retrograde alteration determines if the magnetite skarn is enriched with gold.
Massive magnetite rarely carries gold.
•
Secondary biotite, amphibole, potassium feldspar in the intrusion or abundant
secondary quartz, particularly aligned along fractures.
•
Pudgy dense clays in veins or fractures, especially yellow green, orange and
zoned with dark brown to black iron oxide stringers or veinlets is a good
indicator of a retrograde alteration.
•
A “Bermejal” brownish red soil colour anomaly after iron oxides, with or
without magnetite in the soils. Learning to differentiate the different colours of
FeOx in soil and in outcrop can be an important exploration tool.
•
The most useful pathfinders within the GGB is Au.
pathfinders include As, Sb, Hg, Cu, +/- (Mo, Ag, V).
8.1
Other correlative
Mineralization and Alteration
Exploration conducted by Newstrike on the AN Property is at a relatively early stage but
potential for Laramide Fe (Au, Cu) skarn-porphyry system of the GGB, Tertiary Ag+Ag
(Pb-Zn+Cu) low sulphidation epithermal veins, and Jurassic-Cretaceous VMS
(volcanogenic massive sulphide) mineralization was identified during the Newstrike’s
surface prospecting and mapping programs (Figure 11). However, the specific details,
regarding relevant controls, dimensions, and continuity of potential mineralized zones
are not known. Although incompletely understood, the character and type of GGB gold
mineralization known within the AN Property is described within this Section and
elsewhere in the Deposit and Exploration sections of this Technical Report.
VMS potential is known to occur west of the Teloloapan-Platform tectonic boundary
within Jurassic-Cretaceous marine volcanic and volcanoclastic stratigraphy. Known
VMS prospects occur on adjacent claims to Aurea Norte including Campo Morado, La
Reforma, Campo Seco, Trinidad and Rey de Plata (Kearvell, 2009). Newstrike has
completed only a preliminary investigation of stratigraphy conducive to a VMS style of
mineralization, but favourable alteration, textural and lithologic environments do exist on
the scale of the AN property. The potential for VMS mineralization (Figure 16, and
PhotoSat Target 4, Figure 18) is not the current focus of the Newstrike’s exploration
efforts.
Potential also exists for epithermal Ag (Pb-Zn+Cu) low sulphidation veins with
associated, disseminated and stockwork mineralization as documented elsewhere within
the GGB. A northwest and northeast trending high angle orthogonal fault system
displaces all units and is the principal “post GGB” structure observed to date, related to
Mid-Tertiary block faulting. This event is host to the younger (unrelated?) epithermal
narrow fissure veins (Ag-Pb-Zn) such as the Mina Amarilla, El Anono, and Vianey Mine
located within the former Morelos Reserve (Figure 4).
37
The Vianey mine remained in operation up to 1996 and reported high grades achieved
by hand cobbing (Kearvell, 2009). Kearvell (2009) collected chip samples across the
Vianey vein in 1995 that indicated significant silver with base metals and high antimony
(Table 2). This is geochemically distinct from the low Ag-Pb-Zn character of the skarn
type mineralization along the GGB.
Table 2. Chip samples collected across the vein, Vianey Mine by Kearvell in 1995. (Kearvell,
2009).
Sample No.
Location or type
Au ppb
Ag ppm
Cu ppm
Pb %
Zn %
Sb ppm
879
Vianey vein 0 level
90
610
898
7.25%
22.4%
844
884
Vianey vein -38 level
215
662
317
9.05%
12.4%
864
The early stage of exploration on the AN Property precludes a comprehensive
understanding of the timing and controls of epithermal mineralization within or proximal
to skarn alteration zones. Skarn related mineralization is crosscut by apparent late
epithermal veins at the San Luis target. One showing examined on the September 2 site
visit indicated milled quartz clasts within pervasively silicified heterolithic breccias (Figure
17). The significance of these epithermal structures within skarn zones is unknown but
may be expected to be favourable targets for higher-grade mineralization by
remobilization and late veining.
Due to the multiple styles of mineralization observed on the property together with the
observed stratigraphy, Kearvell (2009) believes there may also be some potential for
SEDEX (sedimentary exhalative mineralization), Ag-Pb-Zn carbonate replacement
deposits, or even Carlin-type mineralization to exist on the scale of the Newstrike’s
properties.
38
Figure 16. Indications for VMS Mineralization.
Upper left: Marcasite replaces worm tubes in cherty black shale. Weathered surface. Upper right:
Wet fresh cut surface of worm tubes. From a boulder sized clast within outcrop (of talus
breccia?), 407352E, and 1991732N. Mid-Left: Argillic altered pyroclastic breccia with FeOxCarbonate stockwork, 401378E, and 1993095N. Mid-Right: An indication of the intense folding on
the property, Isoclinal folds in bedding in Teloloapan sediments, Folds plunge N140º/40,
395810E, and 2003247N. Lower left: Altered pepperite near Cerro Liso (a bimodal volcanic
environment?), 401209E, and 1995076N. Lower right: Highly vesicular olivine basalt, near
401209E, and 1995076N. UTM WGS84, Q14N (Kearvell, 2009).
39
Figure 17. Milled and brecciated quartz clasts within a heterolithic breccia at the San Luis target
indicative of a dynamic epithermal system.
9.0
EXPLORATION
Minera Aurea commenced exploration on the AN Property beginning in 2004 and
continuing through to 2009 included the following activities:
•
Prospecting
•
Selective regional geologic mapping - 40%
•
Targeted detail geologic mapping – about 200 hectares
•
A structural study of the proposed tectonic boundary
•
Regional magnetic interpretation and ground magnetic survey.
•
PhotoSat alteration study
•
43 petrology samples-thin and polished sections
•
1398 outcrop geochemical samples, including grid and trench samples
•
134 stream sediment samples
•
4129.3m of NQ core drilling in two programs
•
1784 drill core samples.
40
Newstrike expended C$128,593 between September 30 2008 and October 1st of 2009
on mineral exploration activities, audited as of July 31st, 2009. The expenditures were
incurred on a review of all existing data, a database compilation, field and drill core
reviews and an exploration report incorporating all work completed since project
inception in 2004. Expenses related to the completion of this Technical Report are
excluded from the total.
All targets on the Property represent “blind” exploration potential in that mineralization is
not found at the surface. Surface indications include appropriate GGB alteration and
characteristic geochemistry. According to Kearvell (2009) many of the principal deposits
in the GGB including Los Filos, Bermejal and Limon were discovered based on
interpreted models and subsequent road building, trenching and drilling programs that
resulted in discoveries. In all cases, mineralization was uncovered beneath a thin
surface veneer of unmineralized outcrop.
Most of the exploration techniques employed by Newstrike on the AN Property rely on
the identification of “jasperoid” as a key guide to mineralization. Jasperoid at the San
Luis target was examined during the September 2, 2009 AN Property visit. Newstrike
geologists have developed a field description of “jasperoid” as breccia with FeOx +/silica (as vuggy stringers, chalcedonic banding, dense flooding - absent to strong
pervasive replacement- or “induration”) developed in carbonate rock. Silicification can
occur in the clasts and/or in the breccia matrix. The gross texture varies from clast
supported (closed breccia) to matrix supported (open breccia) with angular or
subangular clasts. The iron oxide content varies from hematite on clast fractures, and/or
on the matrix with strong hematite, limonite, and goethite. The jasperoid may or may not
contain evidence of sulphide minerals (e.g. pyrite, arsenopyrite, stibnite - Sb oxide
pseudomorphs after stibnite, magnetite and pyrrhotite have been identified in core from
San Luis, Kearvell, 2009).
The use of the field term “jasperoid” is ambiguous as jasperoid is not necessarily derived
from a skarn or calc-silicate alteration but may result from a variety of hydrothermal
processes. The ambiguity of the term reflects the uncertain origin of the “jasperoid” and
whether it is a product of an iron (Au) skarn environment or is related to an epithermal
environment or to some other process. The term jasperoid is not to be confused with the
term jasper (a dense, usually gray, chert-like, siliceous rock, in which chalcedony or
cryptocrystalline quartz has replaced the carbonate minerals of limestone or dolomite).
Jasperoid in this usage denotes a cryptocrystalline silica +/- iron oxide replacement of
carbonate rich rocks, structures (including breccias’) and veins.
41
9.1
Exploration Methodology
9.1.1
Geophysics
Magnetic surveys are a particularly useful exploration tool used to identify near surface
structures, contacts, and even lithologies through the mapping of magnetic “high” or
“low” zones as determined through comparison with a measured regional magnetic
background. For example, in a skarn environment, magnetic “high” anomalies may be
associated with magnetite skarn, or disseminated magnetite-pyrrhotite, or with a high
ferromagnesian mineral content in a buried intrusion. Alternatively, “lows” for example,
may indicate areas of clay alteration in an intrusive host, and where contrasts may
indicate underlying structures.
In the GGB, magnetic surveys are most useful for locating buried intrusions, and for
mapping structures; both of which may have contributed to the deposition of gold. A
review of available magnetic images from the SGM and from a composite of surveys
available for the district has successfully led to the interpretation of underlying controls
on mineralization, has located new targets for exploration and has been corroborated
with ground follow up where a ground magnetic survey was able to reference the
airborne anomalies to a GIS grid and successfully locate new drill targets.
i. SGM Airborne Magnetic Survey
Regional airborne magnetic data is available from the SGM from surveys flown at an
elevation of 300m with 1000m line spacing. This provides a poor resolution for surface
detail but is very good for interpreting deep-seated structures and intrusions. Figure 18
shows the total field magnetic signature from the Apaxtla del Castregon map sheet
E14A87. The AN Property boundaries and key geological features observed in outcrop
have been overlaid to highlight certain features for interpretation. Strong north- south,
northwest and northeast trending deep structures and roots of deep-seated intrusions,
suggesting loci for vertical emplacement are evident.
ii. Composite Aeromagnetic Images
In previous years, several historic airborne magnetic surveys were flown over the AN
Property and surrounding areas including data generated by the SGM (formerly the
CRM), Peñoles, Minera Nafta, and Luismin. This data is available in raster format only
(jpeg). In the absence of an independent survey for the Property, a composite of raster
images from three different surveys was used to interpret near surface features (Figure
19). In many cases the unknown parameters used in these surveys, and the resulting
geo-referencing controls from one survey to the other limit their usefulness.
Nevertheless the image is useful on a regional scale for a rough interpretation of the
underlying near surface magnetic signature when compared with observed outcrops and
structures at surface, with allowances for the noted distortion. The image can also be
compared with the SGM regional magnetic signature of Figure 18 that uses the same
geology overlay.
42
Figure 18. SGM Total Field Magnetic Contour Map.
Apaxtla del Castregon 1:50,000 Map sheet E14A87. Pink solid overlay are known intrusions mapped at the surface. Blue lines are known
structures at surface. Black labels locate key towns, mineral showings and exploration targets.
43
Figure 19. Composite Total Field Magnetics, AN Property.
Pale and dark pink solid overlay= intrusions. Blue lines= known structure at surface. Black labels locate key towns and targets. Note the distortion
between the original UTM grid points (large cross) and the MapInfo version (small cross) indicating the image is not properly geo-referenced.
44
iii. Ground Magnetic Survey
Newstrike conducted an orientation ground magnetic survey over the Morenita claim,
which is underlain by jasperoid and magnetite skarn, to better gauge the effectiveness
for prospect-scale drill targeting. A one square kilometre survey (Figure 20) area was
selected to cover a known airborne magnetic anomaly and the ground survey was
contracted to Asteroide Ingeniería S.A de C.V. (Mexico City D.F., Mexico). The
objectives for the survey were to orient a known composite image airborne anomaly to a
fixed GIS survey grid, to establish a magnetic gradient and investigate any potential
magnetic zoning, to compare the magnetic response of an area of known alteration with
a high resolution magnetic survey and attempt to evaluate the presence of buried
intrusions or structures that could indicate a favourable drill target. High-resolution maps
were produced for the Total Field, Vertical Gradient, Reduced to the Pole and Analytical
Signal summarized in Figures 21 through 24. The ground survey results did successfully
define drill targets, especially within areas of no outcroppings of altered rock.
Figure 20. Morenita Ground Magnetic Survey Grid Location Map
(Kearvell, 2009).
45
Figure 21. Total Magnetic Field, Morenita Grid.
The northwest sector of the grid shows a high total field response whose centre is located just off the grid as shown by the arrow (Kearvell, 2009).
46
Figure 22. Vertical Magnetic Gradient, Morenita Grid.
A west-northwest trending anomaly is observed in the vertical gradient with maximum values varying between 23 to 49 noted by the arrow
(Kearvell, 2009).
47
Figure 23. Reduced to the Pole, Morenita Grid. Reducing the data to the pole defined three larger anomalies among several smaller, with
maximum values varying between 19 and 28nT. Anomaly A shows poor uniformity. A second, anomaly B, the main anomaly for this survey area
presents a semi-circular form with a 150-metre radius that is associated with two smaller anomalies to the east and west. Anomaly C is composed
of two magnetic anomalies. Anomaly B is interpreted to be the best drill target (Kearvell, 2009).
48
Figure 24. Analytical Signal, Morenita Grid. The analytical signal, shows a semi-circular distribution of magnetic anomalies that coincides with
Anomaly B on the reduced to the pole map of Figure 21. This confirms anomaly B as a target of interest for drilling. The analytical signal also
indicates a series of anomalies along the northeast-southwest structure from the vertical gradient map. The alignment of the analytical signal for
the most part conforms to structural alignments and with dolomite units (Kearvell, 2009).
49
The study concluded that there is good correlation between anomalies from total field,
reduced to pole and analytical signal. Depth to the anomalies has been estimated to be
between eight and twenty metres below surface (Kearvell, 2009).
9.1.2
Photosat Alteration Study
Newstrike contracted with PhotoSat Information Ltd. (Vancouver, Canada) to acquire
and interpret the alteration distribution patterns from satellite photographic imagery for
the AN Property. The objective of the study was to evaluate the effectiveness of this
technique by comparing identified anomalies with known prospects, targets, and
deposits (Figure 25), and to evaluate its effectiveness in locating possible new targets
buried beneath cover. Using this method at least five targets were selected for follow-up
exploration on the AN Property, as shown in Figure 26. Targets 1, and 2 have been
verified on the ground and are associated with porphyry intrusion outcrops and
jasperoidal alteration that merit follow-up exploration. The remaining targets (Figure 26)
are still pending follow-up in the field.
Figure 27 shows the kaolinite-alunite distribution of the known San Luis, Rey David and
Ana Paula Showings originating from outcropping altered porphyry intrusive, all which
show a good response when compared to surrounding geology. Figure 27 also shows a
previously unknown target. PhotoSat target 2 was found by the PhotoSat survey and
was confirmed by ground follow-up where it was observed to be related to intrusions of
porphyry monzodiorite and scattered outcroppings of jasperoid. Both are considered as
favourable indicators for a GGB style of mineralization that merit follow up exploration.
The kaolinite-alunite and iron oxide (FeOx) distributions for the known Morenita and
Apetlanca showings are plotted on Figure 28 along with stream geochemistry results
(the size of the yellow circles indicate increasing gold; downstream to the south). In this
example the target is blind and lies beneath a limestone cover. The kaolinite-alunite
distribution shows no response about known outcrops of the Aguacate porphyry, which
is located beneath tree cover at the base of the valley, indicating the limitations of the
survey method. The FeOx distribution clearly highlights the red soil anomaly at
Apetlanca, mostly due to the presence of cultivated fields having exposed the soils
beneath a vegetative cover. In this instance the survey results corroborate the Apetlanca
area as a target for continuing exploration, while the PhotoSat survey missed the
Morenita and Aguacate area, which remains an important exploration target despite a
lack of response from the satellite imagery.
50
Figure 25. Kaolin-Alunite Distribution, El Limon Deposit, Morelos Project. North is to the top of the image. Yellow circles: stream sediment gold in
ppb; red line: approximate outline of the Limon oxide ore zone. A PhotoSat comparison of known deposits on adjacent properties (Kearvell, 2009).
51
Figure 26. PhotoSat Target Locations. Hydroxide Distribution Map, inclined view looking north, shows five new exploration targets selected by the
initial image analysis. Note that both the San Luis showing and the Limon deposit show up well using this method. Red=high intensity, blue=low
intensity. Yellow lines=project boundaries. In this image, results are overlain onto the colour Aster image (Martinez, 2007).
52
Figure 27. Alunite-Kaolinite Distribution Map, San Luis and Rey David Showings. North is to the top of the image. Black lines=property
boundaries. Cool to warm tones equals increasing probability for alunite vs. kaolinite overlain onto a grey scale orthophotograph base (Kearvell,
2009).
53
Figure 28. Alunite-Kaolinite and FeOx Distribution Map, Apetlanca and Morenita Showings. North is to the top of the image. Black lines=property
boundaries. Cool to warm tones equals increasing probability for alunite vs. kaolinite or increasing FeOx; overlain onto a grey scale
orthophotograph base (Kearvell, 2009).
54
9.1.3 Stream sediment survey
A stream sediment survey was initiated in 2007 on the AN Property to evaluate PhotoSat
targets and follow-up results from previous stream sediment surveys. A total of 134
samples were collected and assayed prior to early termination of the program due to
budgetary constraints (Kearvell, 2009).
Data from three existing stream sediment databases, including surveys from the SGM,
Minera Nafta S.A. de C.V. and Newstrike’s’ previous work were plotted using thresholds
calculated from the large SGM database to be used as a guideline for interpretation of
anomalous results. A lower threshold of 11 ppb gold was calculated with a standard
deviation of 36. Results are considered anomalous between these two values, and
strongly anomalous above the standard deviation. Figure 29 shows the regional
distribution of gold from the stream sediment data. Of these samples, 834 assayed
below the lower threshold of 11 ppb, 150 samples assayed moderately anomalous from
11 to 36 ppb gold and 47 samples assayed strongly anomalous with 36 to 1000 ppb
gold. Any discrepancies between survey results may be due to varying parameters
between survey methods, varying sample density, sample site location and the assay
method used. The stream sediments survey successfully located anomalous targets,
some which corroborated known showings, some of which confirm the results of other
regional survey methods used, some which were previously unknown.
9.2
Exploration Targets
Early regional prospecting by Newstrike initially identified three targets conforming to the
GGB model, the San Luis, Rey David, and Morenita showings (Figure 30). The
Apetlanca showing and PhotoSat targets 2 and 4 were located during subsequent
exploration (Figure 26). To date, exploration has focused on the San Luis, and Rey
David targets that are host to jasperoid, jasperoid breccias, and paired diorite and
granodiorite porphyry. These targets were tested by modest drill programs described
under the section on Drilling (below). A third discovery, Morenita consists of jasperoid,
with local magnetite and garnet, but lacks surficial intrusive outcrops. A fourth showing,
Apetlanca has not yet been systematically followed-up (Kearvell, 2009).
9.2.1
San Luis
Preliminary regional exploration discovered silicified, brecciated and oxidized outcrops
located near the town of San Luis on the east portion of the Coyote claim, Figure 31.
The San Luis showing occurs at the faulted contact between Morelos limestone and
Mezcala sediments and is intruded by a diorite to monzodiorite porphyry. Iron-rich
jasperoid breccia deposits were found located along a N20°W to N10°E high angle fault
that forms a sigmoid fault pattern suggesting an extensional environment.
55
Figure 29. Gold distribution from stream geochemistry on the AN Property (in Kearvell, 2009).
56
Figure 30. Mineral showings, prospects, and targets on the AN Property (Kearvell, 2009).
57
Figure 31. El Coyote Claim geologic map. San Luis and Rey David targets are located by the red rectangle. San Luis detail follows in Figure 32
(in Kearvell, 2009).
58
Jasperoid outcrops located along this structure occur over a 150m north-south by 40m
east-west. Preliminary outcrop sampling returned anomalous gold (Au) values up to
1.74gm/Tonne Au, with anomalous mercury (Hg), arsenic (As) and antimony (Sb) from
chip samples taken in outcrops.
A 100m grid was established over the showing and a program of detailed mapping and
grid sampling was completed. This program further defined an area 300m by 140m (4.2
hectares) which anomalous in gold. A more detailed grid with 25m by 10m centres was
laid over the core of the showing and sampled. The best assay from this program
returned 8.05 gm/ton Au from chip samples in outcrop (and averaged to 7.79 gm/ton
with repeat check assays). Moderate to strongly anomalous gold results (>0.074
gm/Tonne) are indicated on Figure 32. Jasperoid breccia is also anomalous in mercury
(to 110 ppm), arsenic (to 6,580 ppm) and antimony (to 1,910 ppm).
The geometry of the associated diorite and granodiorite intrusions is not yet clearly
defined but was interpreted to be emplaced as dikes or sills along low angle bedding
faults or thrust fault surfaces, and was intruded near the apex of an interpreted regional
anticline fold axis that trends north to northeasterly across the property. The anticline is
considered a favourable locus for intrusive emplacement and a potential trap for gold
deposition, as is the paired intrusion that is analogous to the Filos depositional
environment (Kearvell, 2009).
.
Figure 32. San Luis geologic map and gold geochemistry (in Kearvell, 2009).
59
9.2.2
Rey David
In November 2004, Newstrike geologists discovered iron-rich jasperoid breccias 1.3
kilometers southwest of the San Luis prospect. Jasperoid occurs at the faulted contact
between the Morelos and Mezcala Formations intruded by diorite porphyry (Figure 33)
that is more quartz-rich than that observed at San Luis. The alteration may be controlled
by the same sigmoid fault pattern observed at San Luis and the showing is considered
analogous and likely connected with the San Luis showing. Observed alteration suggest
the jasperoid and silica formed at a relatively low temperature and may be distal from the
source of gold bearing fluids (Kearvell, 2009).
Gold values are anomalous but generally low with a maximum of 0.112 gm/Tonne gold.
There are stronger anomalies in mercury (maximum 110 ppm), arsenic (maximum 3,130
ppm) and antimony (maximum 5,850 ppm) that suggest the distal or upper or outermost
alteration edge of a mineralizing system. Figure 33 summarizes moderately anomalous
gold values (> 0.058 gm/Tonne).
Figure 33. Rey David geology and gold geochemistry map. The dashed line is a local road
(Kearvell, 2009).
60
9.2.3
La Morenita
The Apetlanca and Morenita showings occur along the opposing sides of a (younger?)
northeast trending fault that is evident at surface from the towns of Cuetzala del
Progresso through to Apetlanca, here named the Cuetzala-Apetlanca fault (the CA Fault,
Figure 34).
The Morenita showing is located approximately 10 kilometers northwest of the San Luis
and Rey David showings (Figure 30). Morenita displays a similar geologic environment
as Rey David and San Luis with strong jasperoid showings in outcrop, but outcrops of
magnetite and garnet skarn are described suggesting a higher more proximal
formational temperature.
Intrusive outcrops were not observed within the boundaries of the Morenita claim but a
prospective GGB type biotite-feldspar diorite to granodiorite porphyry does outcrop along
the same ridgeline about 1.2Km to the northeast in the Aguacate area that merits follow
up exploration (Figure 34).
Figure 34. Morenita geologic map and gold geochemistry. Note the location of the Aguacate
porphyry with the Morenita claim. See Figure 30 for a property location map. Pale green=Mezcala
(?) Sediments, darker green=Morelos Carbonates, pink=intrusions; Assay results shown are in
gm/Tonne gold; Morenita claim boundary in light orange.
61
9.2.4
Other GGB targets, showings
The Apetlanca showing includes a large exploration area underlain by a distinctive
brownish-red, locally magnetic soil anomaly. Prospecting at Apetlanca has located
outcrops of jasperoid breccia, jasperoid, marble, and diorite porphyry, as well as subcrops of magnetite bearing skarn beneath the brownish-red soil cover. The alteration
occurs in a region interpreted from magnetic data as a dilational zone formed at the
convergence of north-south, northeast and east-west faults and considered a favourable
locus for the emplacement of intrusions.
Other GGB style showings or targets are known to occur on the Property that are either
pending evaluation or are in the very early stages. Goldcorp is exploring disseminated
gold within a satellite or related intrusive body known as the Ana Paula project (Figure
30) on an internal claim to the AN Property.
Regional mapping and prospecting completed northward along trend from the San Luis
showing into the area of PhotoSat target 2 (Figure 27) located outcrops of jasperoid and
monzodiorite intrusion that are weakly anomalous in gold (ranging from 97 to 200 ppb
gold) (Kearvell, 2009).
9.2.5
VMS showings
The Teloloapan volcano-sedimentary terrain underlies the western part of the AN
Property. A stream sediment survey from a reconnaissance program completed by the
SGM pre-2006 (?) located a broad area of anomalous gold on the western portion of the
Coyote claim (Figure 29). The area was also targeted by remote sensing PhotoSat
interpretation (target 4, Figure 26) as meriting follow-up. Prospecting in the area
identified significant indications of VMS mineralization including clay and iron-carbonate
alteration, a cherty red magnetic horizon, a black carbon and pyrite-rich debris flow, and
fossilized worm tubes altered to marcasite (Figure 16). The latter is from a boulder within
a conglomerate or breccia composed mostly of basalt boulders and currently interpreted
as a talus slope breccia.
9.3
Anomalous Threshold Calculations
Newstrike defined anomalous geochemical thresholds in the GGB by determination of
the simple mean and standard deviation, after subtracting all minimum (Min) and
maximum (Max) values. For this method, the mean is taken to be the threshold for a
“real” anomalous result, while anything above the standard deviation is considered
strongly anomalous. This calculation was based on a suite of 370 outcrop chip samples
collected during the early phase exploration program on the adjacent Morelos Project in
1998 and 1999. The Morelos Project was formerly known as the Teck-Goldcorp joint
venture Morelos Norte Project. It is adjacent to the AN Property to the southeast and
shares comparable geology and mineralizing environments.
62
The graphic (Figure 35) determination of the lowermost threshold for reporting as
anomalous (background) was based on the following results from the Morelos Project
assay data:
Sample population= 370 samples
Maximum value= 2650 ppb Au
Minimum Value= 0 ppb Au
Sample population with Max-Min removed = 110
Mean= 97 ppb Au
Standard Deviation= 209 ppb Au
The lowermost threshold determined by this method (the term “anomalous” includes
anything greater than 40 ppb gold) where 0 to 40 ppb gold is interpreted as background,
40 to 97 ppb gold is weakly anomalous, 97 to 209 ppb is moderately anomalous, and
anything greater than 209 ppb is strongly anomalous. These thresholds were then used
to plot the results on a map of the area to show the regional anomalous gold distribution.
A plot of anomalous gold distribution on a regional geologic map for the Morelos Project
is shown in Figure 36. This map demonstrates that, using the anomalous threshold
calculation described in the preceding section, that of the 370 original samples taken, 17
samples were weakly anomalous, 13 samples were moderately anomalous and 13 were
strongly anomalous.
Figure 35. Morelos Project Geochemistry. Anomalous threshold calculation for gold (Kearvell,
2009).
63
Figure 36. Morelos Gold Outcrop Geochemistry. Note location of the Limon-Los Guajes deposit with respect to these results and the lack of
anomalous gold, ( in Kearvell, 2009).
64
The early stage exploration results for the AN Property were next compared with those
from the Morelos Project. The same statistical treatment used for the Morelos Project
was used for the suite of 1,274 surface outcrop samples taken during early stage
regional exploration of the AN Property, producing the following results:
Sample population= 1,274 samples
Maximum value= 7790 ppb Au
Minimum Value= 0 ppb Au
Sample population with Max-Min removed = 553
Mean= 76 ppb Au
Standard Deviation= 172 ppb Au
The same anomalous parameters from the Morelos Project were then used to plot
results from the AN Property regional program (Figure 37) for a comparison between the
two projects areas at a regional scale. Of the original 1,274 samples collected on the AN
Property, 80 are weakly anomalous, 41 are moderately anomalous and 61 are strongly
anomalous in gold. These anomalous results, shown on Figure 37, occur in three distinct
clusters that, while skewed by the sample density used during early regional mapping,
merit follow up exploration. These results confirm the gold mineralizing potential for the
AN property.
A complete list of surface outcrop chip samples that returned moderately anomalous
assay results or better for gold on the AN Property is provided in Table 3, where
moderately anomalous results are considered to be 97 ppb gold or better. The table
does not include any assay results that are considered weakly anomalous (40 ppb to 97
ppb gold). The table also provides the results for other elements with the potential to be
used as a pathfinder.
This approach has demonstrated that outcrop chip sample assay results from the AN
Property (Figure 37) are comparable with the early regional program from the Morelos
Project (Figure 36). Numerous samples, some with anomalous gold, had to be excluded
from the database because of missing UTM locations and/or sample descriptions.
65
Figure 37. AN Property regional outcrop gold geochemistry. Assay groupings are a function of sampling density. More regional samples are
needed to properly assess the gold distribution on the Property (in Kearvell, 2009)
66
Table 3. Anomalous Regional Outcrop Chip Geochemistry AN Property. Zero values are below the detection
threshold for the assay method used. The > symbol is for values that exceed the assay method used.
LOCATION
SAMPLE
X (WGS84)
Y (WGS84)
Au
Ag
As
Ba
Cu
Hg
Mo
Pb
Sb
Zn
ppb
ppm
ppm
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
SAN LUIS
BvCY01
415512.00
1997042.00
208
0.5
308
40
23
9.04
13
2
515
TRENCH
CATA3
416080.00
1997886.00
474
1.0
4430
50
34
5.35
4
4
164
49
SAMPLES
CATA5
415898.00
1997710.00
218
1.2
467
40
24
27.40
23
0
1475
43
SAN LUIS
GRID SAMPLES
59
CATA6A
415456.00
1996768.00
179
0.0
87
130
5
5.21
2
0
>10000
24
CATAJA
415804.00
1997518.00
263
0.2
218
210
38
11.30
4
6
3260
82
CATAJB
415804.00
1997518.00
384
1.4
208
470
42
18.15
6
5
>10000
78
CATAJC
415804.00
1997518.00
720
0.6
264
1650
55
11.40
18
10
1510
122
91
CATAJD
415804.00
1997518.00
561
0.3
251
2120
38
10.45
12
7
1545
CATAJE
415804.00
1997518.00
922
0.4
295
150
38
9.76
11
5
632
73
CATAJF
415804.00
1997518.00
265
0.2
224
1810
32
9.20
19
5
591
85
CY0014
415800.00
1996699.00
125
0.0
312
170
10
7.40
10
4
61
22
CY0023
415604.00
1996800.00
685
2.7
1680
40
28
47.30
10
6
1010
28
CY0028
415800.00
1996908.00
7790
0.9
688
90
21
58.30
8
5
348
12
CY0031
415800.00
1997001.00
410
0.4
1770
70
26
29.40
25
2
564
499
CY0034
415503.00
1997007.00
196
0.0
577
20
18
16.60
19
3
345
44
CY0044
415613.00
1997305.00
104
0.2
138
70
25
2.68
6
4
101
64
CY0049
415640.00
1997379.00
132
0.2
185
140
25
0.89
7
10
95
61
CY0056
415780.00
1997063.00
247
0.5
6000
150
159
43.00
32
5
1910
224
CY0057
415791.00
1997039.00
134
0.0
1525
60
65
36.10
15
6
641
86
CY0059
415810.00
1997034.00
333
0.6
2770
50
14
73.60
24
3
1130
47
CY0061
415810.00
1997008.00
316
0.9
1360
30
27
48.60
31
2
507
25
CY0063
415800.00
1996984.00
1740
2.1
2090
2530
16
>100.00
23
3
1080
39
CY0064
415810.00
1996983.00
240
0.4
1575
620
18
23.80
20
3
815
33
CY0066
415800.00
1996958.00
222
0.2
265
140
14
68.50
8
3
150
21
CY0068
415789.00
1996932.00
526
1.9
1370
50
30
49.40
27
3
1110
40
CY0070
415811.00
1996933.00
227
1.0
3460
80
34
77.50
22
0
1510
61
CY0072
415811.00
1996908.00
1655
1.6
666
1910
12
64.70
9
3
358
17
CY0074
415799.00
1996883.00
593
3.0
1710
400
16
72.50
9
0
510
7
CY0075
415812.00
1996882.00
289
0.2
1635
60
17
52.10
16
4
702
11
CY0078
415810.00
1996859.00
101
0.0
1695
90
26
11.80
25
5
475
46
CY0104
415832.00
1997009.00
286
0.6
1660
50
28
44.40
36
3
670
36
CY0105
415841.00
1997007.00
123
0.4
1470
120
21
38.10
13
3
536
39
CY0107
415862.00
1997007.00
538
2.4
1475
30
25
43.60
21
0
651
14
CY0111
415820.00
1996982.00
221
0.4
936
50
8
22.00
30
3
632
15
CY0113
415841.00
1996983.00
166
0.0
900
60
16
63.60
34
3
487
10
CY0114
415852.00
1996983.00
373
0.4
1740
60
30
19.80
20
6
472
72
CY0115
415861.00
1996981.00
441
0.3
1590
50
15
22.00
30
4
879
23
CY0118
415840.00
1996959.00
774
0.0
1275
90
16
25.40
34
5
927
33
CY0119
415850.00
1996958.00
269
0.3
778
60
25
11.75
21
4
311
10
CY0120
415859.00
1996958.00
1090
1.2
2460
140
28
34.90
30
4
1705
44
CY0121
415820.00
1996932.00
1105
0.2
525
80
8
13.50
10
4
422
10
CY0122
415831.00
1996932.00
108
0.3
102
260
4
4.36
7
3
71
4
CY0123
415840.00
1996932.00
119
0.2
762
30
17
10.95
33
3
1200
20
CY0125
415820.00
1996908.00
303
0.0
276
200
10
2.12
12
4
123
10
CY0128
415821.00
1996880.00
328
0.0
6580
120
14
>100.00
26
5
1890
21
CY0141
415859.00
1996729.00
135
0.0
374
160
13
2.48
23
4
152
19
CY0143
415780.00
1996933.00
232
0.8
144
20
12
5.46
3
2
73
13
CY0146
415769.00
1996908.00
111
0.4
258
30
15
10.30
12
2
102
26
LOCATION
MORENITA-APETLANCA
REGIONAL SAMPLES
SAMPLE
X (WGS84)
CY0147
415792.00
CY0148
CY0154
Y (WGS84)
Au
Ag
As
Ba
Cu
Hg
Mo
Pb
Sb
Zn
ppb
ppm
ppm
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
1996883.00
123
1.3
403
415769.00
1996883.00
415730.00
1997201.00
463
0.9
2290
98
0.0
101
380
10
27.70
6
0
163
220
26
48.90
140
10
7.08
5
20
4
860
26
6
3
83
23
53
CY0161
415728.00
1997250.00
162
0.0
212
280
24
2.49
7
6
99
CY0184
415745.00
1997380.00
227
0.4
151
220
24
24.00
18
5
78
59
CY0186
415740.00
1997400.00
234
0.3
228
40
20
9.44
13
3
106
89
CY0188
415822.00
1997523.00
579
0.2
220
60
19
15.55
4
5
1865
37
CY0199
415720.00
1997418.00
152
0.0
197
60
29
2.84
14
7
85
108
CY0200
415626.00
1997273.00
114
0.4
1335
30
56
17.00
25
7
1060
249
CY0214
415852.00
1996783.00
183
0.0
288
20
15
3.46
18
2
111
16
CY0230
416148.00
1996925.00
255
5.3
2440
720
21
49.90
29
7
359
44
CY0250
415520.00
1997041.00
131
0.5
225
40
22
7.12
12
3
1390
41
CY0251
415528.00
1997095.00
187
0.2
482
30
23
16.10
25
3
626
50
CY0252
415540.00
1997407.00
98
0.4
97
120
6
2.06
3
2
>10000
16
CY0257
415639.00
1997489.00
113
0.0
192
40
7
1.25
2
2
30
17
CY0261
415770.00
1997483.00
317
0.3
113
2160
12
5.94
8
3
388
32
CY0265
415560.00
1996721.00
134
0.0
1205
110
13
19.65
18
2
297
25
21
CY0266
415610.00
1996796.00
192
0.6
344
20
13
21.00
7
3
258
CY0269
415565.00
1996908.00
296
0.4
291
20
29
13.00
22
4
134
78
CY0282
415286.00
1999146.00
109
0.0
549
30
12
31.10
9
3
414
51
CY0300
415956.00
1995888.00
280
0.0
498
920
6
25.40
4
4
146
9
CY0392
116029.00
1997839.00
324
1.3
4060
170
38
7.00
3
14
131
58
CY0392
116029.00
1997839.00
324
1.3
4060
170
38
7.00
3
14
131
58
CY0393
415513.00
1996738.00
356
0.2
428
40
11
23.00
7
3
1190
16
CY0393
415513.00
1996738.00
356
0.2
428
40
11
23.00
7
3
1190
16
CY0408
415803.00
1996906.00
228
0.0
475
70
19
7.75
12
5
253
29
CY0409
415803.00
1996906.00
121
0.2
237
30
12
7.30
5
2
118
17
CY0410
415803.00
1996906.00
256
0.5
520
90
20
9.09
11
6
270
29
CY0411
415803.00
1996906.00
239
0.7
471
70
17
6.86
8
7
234
29
CY0412
415803.00
1996906.00
206
0.2
430
90
17
6.78
9
6
247
28
CY0413
415803.00
1996906.00
216
0.4
689
110
17
9.16
9
6
337
27
CY0414
415803.00
1996906.00
197
0.5
437
70
16
6.48
9
6
248
25
CY0415
415803.00
1996906.00
276
0.2
459
70
16
6.04
7
6
226
28
23
CY0416
415803.00
1996906.00
238
0.5
494
90
16
6.13
8
6
255
CY0417
415803.00
1996906.00
416
0.8
1500
50
35
22.90
13
2
457
22
CY0422
416076.00
1996627.00
213
0.2
275
150
58
11.80
21
13
99
107
CY0423
416090.00
1996443.00
223
0.0
246
130
48
6.34
18
12
63
50
CY0424
416104.00
1996465.00
150
0.2
252
80
21
10.25
5
9
85
36
CY0425
416098.00
1996465.00
278
0.3
255
170
48
7.55
11
16
88
94
MOR013
413743.00
2006752.00
354
2.0
1850
220
25
8.00
3
315
80
450
386
MOR014
413799.00
2006754.00
136
3.0
907
340
47
8.00
4
262
67
MOR248
412702.00
2006603.00
137
4.0
378
20
11
12.00
8
4
397
30
MOR254
412398.00
2006402.00
272
0.0
231
20
14
5.00
8
3
183
32
MOR274
415799.00
1997003.00
276
0.5
3570
2840
27
47.00
26
5
1555
786
MOR315*
415510.00
1997575.00
99
0.0
159
20
4
1.00
0
5
98
5
MOR316
415500.00
1997600.00
110
0.0
51
50
15
0.00
1
5
9
20
MOR378
415557.00
1997138.00
117
0.2
136
60
16
0.00
4
9
58
34
MOR569
412101.00
2003230.00
148
3.8
398
120
10
0.00
0
449
25
566
MOR584
415601.00
1996755.00
136
0.0
245
30
18
6.00
6
4
75
10
68
LOCATION
AUREA NORTE
REGIONAL
10.0
SAMPLE
X (WGS84)
Y (WGS84)
Au
Ag
As
Ba
Cu
Hg
Mo
Pb
Sb
Zn
ppb
ppm
ppm
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
MOR585
415606.00
1996803.00
147
1.2
253
10
21
6.00
9
5
161
30
MOR595
415615.00
1997448.00
344
0.3
75
30
10
1.00
5
4
449
18
MOR666
413059.00
2005707.00
107
1.5
447
60
12
0.00
0
76
5
131
AN-06-11
415819.00
1996954.00
286
0.2
765
40
15
14
19
0
291
10
AN-06-22
415819.00
1996954.00
375
0.3
891
50
15
17
23
3
364
9
AN-06-38
415819.00
1996954.00
327
0.2
1005
60
15
28
26
8
347
10
MOR-13
409350.00
1997858.00
354
2
1850
220
25
8
3
315
80
450
MOR-14
409350.00
1997858.00
136
3
907
340
47
8
4
262
67
386
AN0611
415819.00
1996954.00
286
0.2
765
40
15
14.00
19
0
291
10
AN0622
415819.00
1996954.00
375
0.3
891
50
15
17.00
23
3
364
9
AN0638
415819.00
1996954.00
327
0.2
1005
60
15
28.00
26
8
347
10
ANT0173
416676.00
1999999.00
185
0.4
74
70
18
4.00
4
2
232
11
ANT0337
415802.00
2000198.00
196
0.2
422
20
22
83.00
17
2
206
142
DRILLING
Minera Aurea completed 1,341 metres of drilling in nine holes in 2005 and 2,788 metres in
fifteen holes in 2007 (Table 4, Figure 38). The total of 4,129.30 metres of NQ diamond core
drilling was focused entirely on the San Luis and Rey David showings. Newstrike geologists are
currently relogging core from the 2005 and 2007 programs. When completed, data will be used
to more carefully define structural, alteration, and mineralogic controls to gold mineralization
providing vectors for continued drill programs.
Table 4. Drill Collar Data. San Luis and Rey David drill programs.
Drillhole
SL01
SL02
SL03
SL03A
SL04
SL05
SL06
SL07
SL08
SL09
X
(WGS84)
415803
415695
415894
415888
416008
415245
415309
418240
415896
415893
Y
(WGS84)
1996906
1996856
1996886
1996887
1996777
1995795
1995537
1995732
1996931
1996831
Z
(metres)
989.00
962.00
982.00
983.00
953.00
839.00
836.00
838.00
982.00
980.00
SL10
SL10B
SL11
SL11A
SL11B
SL12
SL13
SL14
SL15
SL16
SL17
SL18
SL19
SL20
SL21
415795
415837
415405
415979
415841
416085
415794
415703
415742
415742
415785
415828
415703
416027
415202
1997515
1997521
1997620
1997552
1997681
1997885
1997463
1997484
1997294
1997294
1997195
1997086
1997484
1997806
1997322
998.00
998.00
1014.00
1012.00
1012.00
1020.00
984.00
984.00
1005.00
1005.00
996.00
979.00
984.00
1037.00
937.00
Azi.
Dip
0
90
90
75
270
60
270
50
0
90
90
45
0
90
90
45
270
50
270
45
Sub-Total 2005
90
50
270
60
0
90
313
52
133
46
0
90
270
51
90
50
0
90
270
45
270
65
270
50
270
65
60
55
0
90
Sub-Total 2007
TOTAL
Depth
(m)
209.95
257.95
70.80
24.90
158.20
72.40
225.40
113.55
123.30
84.65
1341.10
171.80
160.00
110.30
200.10
200.00
178.25
141.75
168.35
246.45
88.95
316.05
114.00
220.00
220.70
251.50
2788.20
4129.30
69
Started
Finished
29-May-2005
14-Jun-2005
30-Jun-2005
28-Jun-2005
6-jul-2005
24-Jul-2005
04-Ago-2005
18-Ago-2005
01-Sep-2005
10-Sep-2005
13-Jun-2005
27-Jun-2005
05-Jul-2005
29-Jun-2005
23-jul-2005
03 Agosto'05
17-Ago-2005
31-Ago-2005
8-Sep-2005
15-Sep-2005
12-Mar-2007
15-Mar-2007
23-Mar-2007
26-Mar-2007
04-Apr-2007
10-Apr-2007
14-Apr-2007
26-Apr-2007
3-May-2007
19-May-2007
30-May-2007
15-Jun-2007
22/06/2007
04-Jul-2007
24-Jul-2007
15-Mar-2007
22-Mar-2007
24-Mar-2007
03-Apr-2007
09-Apr-2007
13-Apr-2007
23-4-2007
28-Apr-2007
10-May-2007
28-May-2007
6-jun-207
16-Jun-2007
02-Jul-2007
18-Jul-2007
28-Jul-207
Metres Drilled
Showing
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
Drill Co,
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
Tecmin
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
San Luis
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Energold
Rey David
Rey David
Rey David
Figure 38. Drill hole location Map. Rey David and San Luis Showing. Light green = Mezcala Fm; Dark
green =Morelos Fm.; Pink= Porphyry. Yellow=silicified sediments; Red=jasperoid or jasperoid breccia.
Black circles and numbers=drill holes, black lines indicate the drill direction, Blue lines=faults. Stepped
line=the south property boundary. Dark grey=roads and Pale grey lines =100m topographic contours
(after Hernandez-Contreras, 2007).
70
10.1
2005 Drill Program
Minera Aurea, the predecessor company to Newstrike completed 1,341 metres of core drilling in
nine holes in 2005. Six of nine drill holes were completed as a preliminary test of the San Luis
showing and three tested the Rey David showing. Moderately anomalous (0.097 ppm to 0.209
ppm Au) mineralization or better was intercepted in five of the nine holes completed. Table 5
provides a list of all assay results that returned 97 ppb or greater along with other elements
used as pathfinders. The best calculated grade intercept from the 2005 drill program is from the
San Luis showing where drillhole SL003 intersected 1.11 gm/Tonne gold over a downhole
length of 16.8m (Table 6).
Table 5. 2005 Drill program assay results. All anomalous results greater than 97 ppm gold.
DDH
No.
SL001
SL001
SL001
SL001
SL001
SL001
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL003
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
Sample
No.
SL0001
SL0002
SL0114
SL0117
SL0118
SL0119
SL0160
SL0161
SL0162
SL0163
SL0164
SL0165
SL0168
SL0169
SL0170
SL0171
SL0172
SL0173
SL0174
SL0176
SL0177
SL0178
SL0179
SL0180
SL0181
SL0182
SL0183
SL0403
SL0404
SL0407
SL0411
SL0415
SL0416
SL0417
SL0418
SL0419
SL0420
SL0421
SL0423
SL0427
From
(m)
0.00
2.10
179.35
183.90
185.45
186.95
22.85
24.40
25.90
27.45
28.95
30.50
35.05
36.60
38.10
39.65
41.15
42.70
44.20
47.25
48.80
50.30
51.85
53.35
54.90
56.75
58.60
50.65
53.15
58.05
64.15
70.25
72.45
73.95
75.50
77.00
78.55
80.05
83.10
89.20
To
(m)
2.10
5.00
180.85
185.45
186.95
188.50
24.40
25.90
27.45
28.95
30.50
32.00
36.60
38.10
39.65
41.15
42.70
44.20
45.75
48.80
50.30
51.85
53.35
54.90
56.75
58.60
60.10
53.15
55.35
59.60
65.70
72.45
73.95
75.50
77.00
78.55
80.05
81.60
84.65
90.75
Width
(m)
2.10
2.90
1.50
1.55
1.50
1.55
1.55
1.50
1.55
1.50
1.55
1.50
1.55
1.50
1.55
1.50
1.55
1.50
1.55
1.55
1.50
1.55
1.50
1.55
1.85
1.85
1.50
2.50
2.20
1.55
1.55
2.20
1.50
1.55
1.50
1.55
1.50
1.55
1.55
1.55
Au
ppb
403
438
168
169
901
598
191
197
329
187
120
124
97
391
508
2560
4060
582
244
705
683
836
192
1770
366
200
262
607
207
103
110
120
171
256
118
134
193
315
101
146
Ag
ppm
0.2
0.5
0.3
0.4
0.8
0.2
0
0
0
1.8
0.4
1.1
0
0.2
0.3
0.8
1.2
0.8
0.4
3.4
2.6
3.3
0.8
4.4
1.5
1.1
0.6
0.2
9.4
0.4
0.4
0
0.3
0.3
0
0.2
0.3
1.1
0.2
0
As
Ppm
360
425
510
572
137
58
901
587
826
475
338
217
183
2260
2060
3500
2550
535
388
952
534
458
263
2730
822
480
697
1040
731
314
232
194
209
337
154
109
102
176
128
207
71
Ba
ppm
90
130
70
180
40
220
2490
2590
1970
490
460
390
380
2790
1320
2080
2280
1120
420
2340
2480
2360
530
3060
1700
1040
50
810
2100
100
90
10
10
10
10
30
30
190
70
80
Cu
ppm
17
26
10
19
15
11
20
24
26
32
6
8
6
20
5
10
22
16
5
26
24
23
6
45
12
6
10
13
56
6
7
7
6
5
4
5
4
5
4
8
Hg
Ppm
10.85
22.5
2.43
6.04
4.01
5.54
17
20
31
27
17
32
13
109
166
215
241
84
16
107
79
87
15
95
73
25
65
6.37
13.1
0.17
0.2
0.51
0.43
0.41
0.3
0.39
0.5
0.98
0.31
1.1
Mo
Ppm
7
9
6
6
4
13
16
27
29
19
13
11
5
23
12
45
16
9
7
10
13
11
7
29
6
4
10
5
6
1
1
2
1
1
1
1
1
1
1
1
Pb
ppm
6
7
2
4
4
2
22
4
6
3
2
5
4
5
2
4
6
5
2
6
5
5
5
8
6
4
17
13
8
0
3
4
3
5
2
3
3
5
3
6
Sb
ppm
125
176
21
16
131
22
56
137
254
219
157
113
152
989
520
769
562
144
141
323
328
289
175
744
230
165
226
112
95
7
9
15
13
13
8
6
9
25
5
19
Zn
ppm
15
26
20
46
28
46
33
24
29
17
3
3
26
229
94
44
54
23
12
18
13
15
18
65
42
14
20
135
103
11
18
20
19
40
17
29
14
23
40
29
DDH
No.
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL006
SL007
SL007
SL007
SL007
SL007
SL007
SL007
SL007
SL007
SL007
SL009
SL009
SL009
SL009
Sample
No.
SL0435
SL0476
SL0478
SL0484
SL0485
SL0486
SL0487
SL0513
SL0561
SL0562
SL0563
SL0564
SL0565
SL0566
SL0573
SL0574
SL0578
SL0579
SL0637
SL0638
SL0639
SL0640
From
(m)
101.40
163.45
166.50
175.65
177.20
178.70
180.25
218.20
62.10
63.80
65.60
66.60
68.50
70.20
80.45
82.00
88.10
89.60
33.95
35.15
36.35
37.55
To
(m)
102.95
165.00
168.05
177.20
178.70
180.25
181.75
219.75
63.80
65.60
66.60
68.50
70.20
71.60
82.00
83.50
89.60
91.15
35.15
36.35
37.55
39.05
Width
(m)
1.55
1.55
1.55
1.55
1.50
1.55
1.50
1.55
1.70
1.80
1.00
1.90
1.70
1.40
1.55
1.50
1.50
1.55
1.20
1.20
1.20
1.50
Au
ppb
228
114
110
144
137
231
107
107
228
1140
210
223
274
102
145
250
217
203
429
225
220
323
Ag
ppm
0.3
0
0
0
0
0
0
0.5
0.4
2.8
1.2
1
0.5
0.3
0.6
0.6
1.1
1
0
0
2.1
0.4
As
Ppm
531
109
116
176
530
303
280
310
252
850
306
224
336
150
195
395
123
152
363
120
167
876
Ba
ppm
230
30
30
170
410
350
670
90
90
200
340
710
450
540
50
30
0
10
1150
680
220
1880
Cu
ppm
8
4
4
13
11
12
9
19
4
24
29
13
18
14
23
36
4
16
36
26
18
27
Hg
Ppm
0.43
0.1
0.1
0.09
0.07
0.15
0.13
0.59
4.82
8.72
4.39
2.83
1.83
0.97
1.04
1.83
0.28
0.43
18.35
8.11
12.45
43.4
Mo
Ppm
2
1
1
5
3
3
2
7
1
3
5
3
4
4
7
21
4
4
23
14
12
19
Pb
ppm
7
2
2
6
5
5
8
4
0
17
4
3
4
3
3
7
4
5
3
4
3
4
Sb
ppm
148
0
3
4
10
11
6
6
80
197
94
107
111
38
103
37
12
15
174
123
94
368
Zn
ppm
37
7
13
42
32
57
42
96
32
130
96
59
90
51
132
155
17
51
123
60
50
24
Table 6. 2005 drill program results. Significant (>0.30 gm/T) gold intercepts.
10.2
Drillhole
SL01
And
SL03
Includes
SL06
And
And
SL07
Includes
From
0.00
185.45
22.85
38.10
50.65
70.25
175.65
47.30
63.80
To
5.90
188.50
60.10
54.90
55.35
81.60
181.75
91.15
70.20
Interval (m)
5.90
3.05
37.25
16.60
4.70
11.35
6.10
43.85
6.40
Gold gm/Tonne
0.42
0.74
0.61
1.11
0.42
0.18
0.15
0.13
0.49
SL09
33.95
39.05
5.10
0.30
2007 Drill Program
Fifteen drillholes (totalling 2,788) m were completed in the San Luis area to follow-up on the
results from 2005. Moderately anomalous gold (0.097 ppm to 0.209 ppm Au) or better occurs in
eleven drill holes, often over repeated intervals. Table 7 provides the results of all anomalous
assay results for gold greater than 97 ppb. Assay results vary from weakly to strongly
anomalous, with a best intercept of 3.09 gm/Tonne gold over 0.7 metres downhole in drill hole
SL14 (Table 8).
72
Table 7. 2007 Drill program assay results. All anomalous results greater than 97 ppb gold.
DDH
Sample
From
To
Width
Au
Ag
As
Ba
Cu
Hg
Mo
Pb
Sb
Zn
m
Ppb
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
ppm
ppm
No
SL010
No.
SL10002
M
4.05
m
7.10
3.05
209
0.3
188
90
21
6
7
9
324
62
SL010
SL10011
17.45
19.90
2.45
703
0.7
223
140
41
12
26
7
3070
99
SL010B
SL10B051
74.30
75.60
1.30
182
0
61
20
8
3
2
0
121
33
SL010B
SL10B055
79.40
80.50
1.10
108
0
343
60
15
7
11
4
1080
70
SL011
SL11063
85.90
87.20
1.30
137
3.2
615
280
36
2
7
7
124
58
SL011
SL11065
88.40
90.00
1.60
134
0
905
120
27
2
4
9
3260
71
SL011
SL11072
98.20
99.30
1.10
522
0.6
1050
170
22
8
3
7
115
10
SL011
SL11073
99.30
100.40
1.10
231
0.2
592
440
15
4
7
4
84
77
SL011
SL11074
100.40
101.60
1.20
295
0
558
2980
21
6
8
7
209
58
SL011
SL11075
101.60
102.70
1.10
315
0
254
410
16
4
3
6
55
26
SL011
SL11076
102.70
103.80
1.10
698
1.6
466
200
20
10
4
6
102
29
SL011
SL11077
103.80
104.90
1.10
127
0.3
130
210
20
1
4
7
27
10
SL011
SL11078
104.90
106.00
1.10
192
0
207
150
20
1
5
7
22
59
SL011
SL11079
106.00
107.10
1.10
201
0
318
300
20
3
3
7
32
24
SL011
SL11081
108.30
109.30
1.00
122
0.2
160
600
15
2
7
7
42
34
SL011A
SL11A113
165.40
166.90
1.50
133
0
85
350
10
1
11
6
36
11
SL011A
SL11A114
166.90
168.30
1.40
153
0
126
150
8
3
24
3
10001
10
SL011A
SL11A115
168.30
169.80
1.50
104
0
71
70
8
1
24
3
224
4
SL011A
SL11A118
173.00
174.30
1.30
108
0
73
40
30
1
12
4
39
9
SL011B
SL11B001
24.50
25.60
1.10
108
0
251
20
8
2
0
5
3
28
SL011B
SL11B045
123.70
125.20
1.50
213
0
3170
80
13
7
0
6
182
57
SL011B
SL12003
12.25
13.85
1.60
125
1
151
20
11
3
4
3
1120
12
SL011B
SL12004
13.85
15.85
2.00
121
1.6
253
40
16
3
6
3
1820
22
SL011B
SL12010
47.25
48.75
1.50
736
0
77
280
30
4
22
5
26
48
SL011B
SL12011
48.75
50.30
1.55
1225
0.5
56
210
25
4
18
2
17
41
SL012
SL13007
15.15
16.70
1.55
101
0
106
520
24
1
4
5
28
62
SL012
SL13013
24.10
25.35
1.25
249
0
198
210
12
1
5
5
170
58
SL012
SL13014
483
0.2
131
1090
61
4
30
11
55
149
SL13018
27.05
33.25
1.70
SL012
25.35
31.45
1.80
115
0
17
250
9
0
3
5
3
8
SL012
SL13019
33.25
34.85
1.60
137
0
44
400
28
1
5
6
37
17
SL012
SL13023
39.35
40.75
1.40
180
0.2
42
550
19
1
10
5
23
41
SL012
SL13024
40.75
42.25
1.50
226
0.2
56
480
23
2
8
5
42
45
SL012
SL13034
56.90
59.05
2.15
250
0
159
640
15
5
7
6
201
36
SL012
SL13035
59.05
59.80
0.75
276
0
49
3170
8
4
1
0
5470
14
SL012
SL13036
59.80
62.45
2.65
348
0.3
114
3070
11
3
2
4
633
19
SL012
SL13037
62.45
64.00
1.55
115
0.6
308
1510
30
18
21
4
514
23
SL012
SL13040
67.50
68.80
1.30
496
0.3
239
190
8
5
7
2
259
14
SL014
SL14002
29.67
30.77
1.10
146
0
76
100
7
1
2
0
6
28
SL014
SL14003
39.85
40.90
1.05
637
0
107
500
10
1
4
3
16
19
SL014
SL14007
59.30
60.00
0.70
3090
0
196
310
3
13
7
0
133
12
SL014
SL14013
97.30
98.65
1.35
475
0.2
63
240
12
3
4
8
42
22
SL014
SL14033
59.30
1.40
97
0.4
69
380
20
3
5
6
20
23
SL014
SL14034
57.90
55.00
57.20
2.20
101
0.3
42
580
8
2
2
7
14
25
SL015
SL15002
3.05
5.45
2.40
164
1.7
230
330
74
4
23
11
51
239
SL015
SL15004
7.45
8.30
0.85
194
5
145
210
54
4
10
9
39
113
SL015
SL15027
172.60
173.00
0.40
168
2.4
94
240
15
0
7
2
42
13
SL015
SL15028
174.55
175.25
0.70
253
2.5
161
140
15
0
1
0
37
34
SL016
SL16002
3.05
6.10
3.05
128
145
90
160
350
6
9
4
35
52
SL016
SL16003
6.10
9.15
3.05
270
0.3
304
890
132
4
33
17
69
602
SL016
SL16004
9.15
10.65
1.50
293
0.3
210
620
76
6
16
9
91
266
73
DDH
Width
Au
Ag
As
Ba
Cu
Hg
Mo
Pb
Sb
Zn
No
SL016
Sample
No.
SL16005
From
M
10.65
To
m
12.20
m
Ppb
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
ppm
ppm
1.55
242
0.2
232
510
55
6
13
7
109
SL016
SL16018
31.10
32.60
1.50
140
0.2
138
50
29
0
13
5
17
81
SL016
SL16024
40.25
43.30
3.05
177
0
165
50
38
0
4
7
33
77
SL016
SL16025
43.30
46.35
3.05
132
0
152
70
33
0
3
6
37
81
SL016
SL16028
52.45
55.40
2.95
505
0.8
482
260
56
3
7
7
149
193
SL016
SL16029
55.40
58.45
3.05
449
6.3
572
290
69
8
9
14
282
176
SL016
SL16030
58.45
61.50
3.05
199
1.5
239
250
50
7
8
14
143
146
SL016
SL16031
61.50
64.55
3.05
285
1.1
566
100
73
2
17
10
126
328
SL016
SL16033
67.60
70.65
3.05
761
1.1
508
230
79
5
17
14
90
278
SL016
SL16034
70.65
73.70
3.05
171
49.1
145
110
114
3
9
5
53
94
SL016
SL16035
73.70
76.75
3.05
483
5.9
486
250
104
5
15
11
143
255
SL016
SL16036
76.75
79.80
3.05
255
4.3
282
180
64
3
11
13
62
167
SL016
SL16037
79.80
85.90
6.10
145
0.9
160
60
26
3
4
8
29
64
SL019
SL19004
39.40
40.70
1.30
204
0.2
312
60
21
1
5
8
18
52
SL019
SL19006
53.30
54.50
1.20
278
0
260
60
27
3
5
12
43
51
SL019
SL19008
67.75
68.45
0.70
113
0.2
204
120
28
2
5
9
20
64
SL020
SL20003
10.35
12.15
1.80
198
0.3
239
700
23
11
21
8
128
43
SL020
SL20005
20.85
22.45
1.60
146
0.3
26
210
11
2
4
6
13
24
SL020
SL20006
29.75
31.05
1.30
1135
0.8
139
610
22
5
8
7
37
84
SL020
SL20018
82.30
83.95
1.65
164
0.4
188
590
5
3
13
4
71
8
SL020
SL20022
90.30
92.20
1.90
153
0.4
182
250
8
9
11
5
96
14
Table 8. 2007 Drill Program, significant (> 0.10 gm/T) gold intercepts.
Drill Hole
SL10
SL10B
SL11
Includes
And
SL11A
SL11B
SL12
SL13
Includes
SL14
And
SL15
SL19
SL20
And
From
17.45
74.30
98.20
98.20
102.70
165.40
123.70
48.75
56.90
67.50
59.30
97.30
174.55
53.30
10.35
29.75
To
19.90
75.60
109.30
99.30
103.80
174.30
125.20
50.30
68.80
68.80
60.00
98.65
175.25
54.50
12.15
31.05
Interval (m)
2.45
1.30
11.10
1.10
1.10
8.90
1.50
1.55
11.90
1.30
0.70
1.35
0.70
1.20
1.80
1.30
74
Gold gm/Tonne
0.703
0.182
0.272
0.522
0.698
0.105
0.213
1.22
0.216
0.496
3.09
0.475
0.253
0.278
0.198
1.135
187
10.3
Discussion of Drill Results
Kearvell (2009) has summarized tentative conclusions and observations based on the first
phase 2005 and 2007 drill programs.
•
The San Luis and Rey David jasperoid is developed near or at the contact of a porphyry
of intermediate composition that appears to have been intruded near the faulted and
folded contact between the Mezcala and Morelos formations.
•
Drilling has confirmed mineralization with respect to gold. Drill hole SL003 shows that
thick packages of potentially economic Au can be found near surface, as indicated by a
37.25 metre altered horizon assaying 0.61 gm/Tonne gold in SL003. This is corroborated
by drill hole SL007 at the Rey David showing which intercepted a 48.35 metre altered
horizon with anomalous gold (0.130 gm/Tonne gold). Both intercepts occur at or near the
intrusion contact.
•
Drill hole SL006, intersected a second 23.50 m thick sill body at Rey David, suggesting
an environment of stacked sills or dikes each with potential for parallel mineralized
horizons.
•
Rey David has been previously interpreted as an extension of the San Luis showing,
following the same ridgeline that is interpreted as an anticline (Martinez, 2007).
Furthermore, Martinez (2005-2007) describes Rey David as situated on the lower
contact of the same porphyry that outcrops at San Luis, suggesting the intrusion follows
westerly dipping structures. If this interpretation is accurate, then many drillholes were
drilled parallel to the dip of the intrusion.
•
Drilling has not defined the geometry of the San Luis or Rey David intrusion(s).
•
The alteration mineral assemblage at Rey David suggests it has formed at a lower
temperature and may represent the end stage or distal-most part of a skarn-mineralizing
front. As a result, gold occurs only as a residual mineralization filling random fractures,
faults, and veinlets.
•
Erratic gold at Rey David is primarily associated with low temperature silicification where
iron oxides coat vugs and fractures and with iron oxide stringers, all suggestive of a
distal source to mineralization.
•
The presence of antimony and arsenic in certain calcite vein intercepts suggests the
presence of an epithermal overprint in the area. SL010 intercepted 2.45 metres of 0.703
gm/Tonne gold and 3070 ppm Antimony in one vein from 17.45 to 19.90 metres
downhole.
•
Drilling at San Luis encountered gold mineralization that indicates a low to moderate
temperature of formation, as indicated by the presence of silicified limestone, well
developed jasperoid and occasional magnetite and garnet. Local cubic fluorite may also
be indicative of higher temperatures of formation.
75
•
The alteration and structural patterns suggests the trend along the ridgeline towards
PhotoSat target 2 important for follow-up exploration.
•
All drill holes to date have tested for a Filos type exploration model where a diorite host
is interpreted to be emplaced in Morelos Limestone at or near the upper contact with the
Mezcala sediments and mineralized from a nearby source (a paired intrusion).
•
All drill holes tested from essentially the same elevation, following the top of the ridge
interpreted as the apex of an anticline whose axis trends north to northeast from Rey
David to San Luis and beyond.
•
Gold mineralization encountered appears to be associated with a mineralizing front
originating from a distal source.
11.0
SAMPLING METHOD AND APPROACH
11.1
Ground Magnetic Survey
The survey work, contracted to Asteroide Ingeniería S.A de C.V. (Mexico City D.F., Mexico)
required establishing a grid over the selected study area, using a handheld GPS (Magellan,
Meridian Platinum) using a WGS84 datum, with elevations estimated from INEGI 1:50,000
topographic contours. The grid covered a one kilometre square area with 21 equal spaced
parallel lines and station spacing of 50 x 25 m for a total of 861 stations. A local base station
was set up on the Morenita claim monument located inside the survey grid. Readings were
taken every two minutes using a high resolution Scintrex MP2 with 0.1nT precision. Grid station
readings were collected using an 'ENVI-MAG SCINTREX', with two vertical spaced sensors for
simultaneous reading of the total magnetic field and the vertical gradient. Readings were
recorded at each station by taking a series of readings (two per/second output) over a twominute interval. Data was entered by hand and plotted graphically in the field as a check on the
accuracy of the measurements. The data was later entered into digital format for processing of
the diurnal correction.
11.2
Stream sediment sampling survey
Stream sediment sample sites were located on the downstream stem of the “Y” formed by the
intersection of the two drainages being tested. A plastic trowel was used to collect the fines from
various points at each sample site, over about a 50 metres length but dependant on the existing
conditions at the individual sample sites. The samples were collected from standing or quiet
waters where fines tended to accumulate, and from dry ephemeral streambeds. The uppermost
surface of the fines was scraped using the trowel, and placed into a paper or cloth sample bag.
The bags were labelled and recorded, then immediately double bagged for transport back to
camp.
76
The samples were shipped weekly to ALS Chemex in Guadalajara, Mexico using the Estrella
Blanca bus line under contract to ALS Chemex. ALS Chemex in Guadalajara dries, sieves and
prepares the samples for shipment to Vancouver for assay. Assay results received using this
method are comparable to a stream survey completed over the adjacent Morelos Project. The
survey successfully produced anomalous gold in the stream environment, using the same
calculated anomalous thresholds from the Morelos survey and the stream sediment survey is
considered by Newstrike to be an effective, cost efficient exploration tool for this rugged tropical
terrain. The survey was terminated early due to budgetary constraints (Kearvell, 2009), and
because pre-existing survey data is sufficient for early exploration stages. As exploration
progresses it may become necessary to complete stream sampling of specific areas.
11.3
Rock sampling
During regional prospecting and reconnaissance, traverse lines were established for each area
selected. Rock samples were collected at every outcrop where alteration or other features of
interest were observed, and at systematic intervals during the course of a daily traverse. This
differed slightly during grid mapping where samples were collected at or near every grid
intersection. In both cases, outcrop samples consisted of random chips taken across the face of
the outcrop. A large sample was collected onto a collection sheet, broken down to small equal
sized fragments then mixed and split into two samples and placed into either cloth or plastic
bags which were labelled with the sample numbers and secured with ties and double bagged.
One sample was reserved for assay, the other retained as a duplicate. All duplicate samples are
kept on site in secure storage facilities.
The collected samples were evaluated, entered into a sample description log and selected
samples were submitted for analysis. Each file was maintained by the project manager and
compiled into a standard format that was reported on a monthly basis. All sample description
files have been subsequently compiled into a single master sample GIS database.
11.4
Drill Programs
Each drill hole collar was spotted using a Brunton compass and a Garmin handheld GPS using
a Universal Transverse Mercator (UTM) grid set to a WGS84 reference geoid for zone 14N.
Minera Aurea geologists or their contractors were present at the drill site daily to ensure the
core was sequentially placed in each box and that the boxes were properly marked and
labelled. No downhole surveys were completed. Boxes were sealed at the site and core was
transported each day to the project core facility to await logging.
Prior to logging, the core was cleaned and marked with a double line (red and blue) to assist
with maintaining a correct core orientation as the core was handled. Each box was then
individually photographed. A geologist was assigned to log a drill hole using an Excel software
format provided by Newstrike’s contractors for core logging and sample descriptions.
A graphical representation of observed structures was included in each drill log. The core was
measured and recovery estimates were made which tended to vary from poor through
mineralized intervals, to very good in more competent rock. Graphic interpretive drill sections
were constructed of the completed logs and final assay results were hand written into the
sections as labels. All drill log and sample data was maintained under the supervision of the
project supervisor.
77
The geologist logging the core marked sample interval on each and left a paper marker with the
beginning and end of each sample. A sample description was entered into the same standard
logging format. Samples were split using either a hand-operated hammer or a hydraulic splitter,
swept clean between samples. Split samples were placed into plastic bags labelled with the
sample number under the supervision of a geologist.
11.5
Recommendations for QA/QC Protocols
It is the opinion of the author that work programs completed on the Aurea Norte Property by
Minera and Newstrike described under Exploration (above) have generated reliable, credible,
data, consistent with industry standards and practices. The overall exploration program was
supervised by a Qualified Person as defined by NI 43-101, Standards of Disclosure for Mineral
Properties.
Exploration anticipated by Newstrike under the Proposed Work Program (Recommendations,
below) should continue to be conducted under guidelines established and supervised by a
Qualified Person, including but not limited to sampling of outcrops and trenching, if warranted.
Surface sampling programs should include protocols of securing safe access, cleaning and
mapping the exposures, and chip sampling using mallets and chisels in one to five meter
intervals across the exposed mineralized zones. Panel samples must be collected to obtain the
most representative sample possible. Analytical check assaying utilizing standards, blanks,
duplicates and audit sampling should be employed for all geochemical and drill samples
programs. Systematic and methodical protocols for QA/QC should be developed and detailed
instructions made available to all project personnel to ensure consistent application.
The Standards Council of Canada (SCC) accredits the ALS Chemex North Vancouver
laboratory for specific tests listed under the Scope of Accreditation No. 579. This accreditation
is based on ISO 17025 international standards and involves extensive site audits and
performance evaluations.
12.0
SAMPLE PREPARATION, ANALYSES AND SECURITY
The rock and stream sediment geochemical sampling and core drilling programs conducted by
Newstrike and its’ predecessor company employed industry-standard protocols for collection
and security of the sample material.
For the drill programs, all geochemical samples to be assayed were double bagged after
splitting and placed in “costales” (grain sacks) and stored on site in a secure location until they
were shipped. The remaining half-split was returned to the core box and stored at the
Newstrike’s secure storage facilities onsite. All samples to be assayed were then transported by
a Newstrike employee weekly to the Estrella Blanca bus line in Iguala, Guerrero for shipment to
the ALS Chemex preparation laboratory in Guadalajara, Jalisco, Mexico (“Chemex”). While the
Estrella Blanco Bus line was under contract to Chemex in Mexico, the samples were out of the
control of the company representatives during transport by Estrella Blanca and until samples
were collected in Guadalajara by staff of Chemex.
78
As standard methodology Chemex employs meticulous sample preparation procedures that are
described on their website (http://www.alsglobal.com/samplePreparation.aspx). Samples that
require crushing are dried at 110-120 C and then crushed with either an oscillating jaw crusher
or a roll crusher. Note that if the whole sample is required to be pulverized, then this condition
becomes irrelevant. The entire sample is crushed, but depending on the method only a portion
of the crushed material may be carried through to the pulverizing stage. That amount, typically
250 g to 1 kg, is subdivided from the main sample by use of a riffle splitter. If splitting is
required, a substantial part of the sample (the "reject" or spare) remains. A whole or split portion
derived from the crushing process is pulverized using a ring mill. The client determines the size
of the split based on the pulverizing procedure that is selected. Split sizes for manganese or
chrome steel rings are typically 250 g to 4 kg; however split sizes for zirconia rings are 100 g
and those for tungsten carbide rings are only 75 g. Because of the relative lightness of these
latter two materials, the size of the sample to be pulverized must necessarily be reduced to
these weights in order to achieve the ALS QC specification for final pulverizing, namely that
>85% of the sample be less than 75 microns (200 mesh).
Soil and sediment samples are typically sieved through a 180 micron (-80 mesh) screen and the
fine fraction is retained for analysis. This procedure is satisfactory for smaller (i.e. 500 g or less)
samples where the exploration target is base metals. However, when gold is the exploration
target, Chemex recommends that the particle size of the minus fraction be further reduced using
ring mill pulverization to > 85% - 75 microns (150 mesh) in order to obtain more reproducible
gold data. For gold exploration, many "soil" samples weigh in at several kilograms or more. In
this latter case, the samples often contain larger components such as pebbles or
agglomerations of clay and other material. For samples like this, we recommend that after
disaggregation the sample be sieved through a -2 mm (10 mesh) screen to remove the coarse
material. Following this intermediate screening, the -2 mm (10 mesh) material is then split to
about 500g using a riffle screen and then sieved through a standard -180 micron (80 mesh) to
obtain a minimum of 150 g of fine material. Chemex still recommends further pulverization if
gold is the exploration target, for the reasons outlined above.
Prepared sample pulps were flown to Chemex’s Vancouver laboratory for analysis. Some of the
pulp and rejects were later shipped back to the project site for storage; others remain in storage
at Chemex. All core samples and geochemical samples were assayed using the multi-element
ICP assay 41-element assay method (ME-ICP41), with gold assayed by fire assay and an AA
finish (Au-AA23). According to Kearvell, (2009) an attempt was made to insert a sample blank at
the beginning of each drill hole but this was not consistently followed. No sample standards
were used, and there were few duplicates assayed.
12.1
Recommendations for QA/QC Protocols
It is the opinion of the author that QA/QC protocols appropriate for the relatively early-stage of
exploration of the AN Property have been employed. Specific details of protocols employed by
previous companies on the AN Property and now forming a part of the general database are not
known but work was supervised a Qualified Person. As exploration of the AN Property
proceeds, especially as drill programs are initiated, systematic and methodical QA/QC protocols
supervised by a Qualified Person become even more important. General recommendations for
future protocols are described in the following paragraphs
79
A Qualified Person should directly supervise all future sampling programs and the samples
delivered directly or shipped using commercial bus services to ALS Chemex’s preparation
facility in Guadalajara, Mexico and forwarded to Vancouver, Canada for final analysis. All
sample bags should be closed and sealed as collected and the samples assembled in sealed
shipping bags or cartons at the end of each working day. Prior to shipping, the sample cartons
will be stored in locked facilities at the Property or a nearby secure site.
The ALS Chemex facility will be responsible for sample security after the receipt of samples. All
pulps and rejects for future programs will be retained for audit analyses and metallurgical work.
All coarse reject material from preparation of samples from the mineralized zones will be
catalogued and retained for any metallurgical studies deemed appropriate in the future.
Rock and soil samples will be crushed and sub-sampled, such that 100 grams of material is
pulverized and shipped for analysis. ALS Chemex applies standard techniques as summarized
in their 2009 brochure for producing gold, and silver analyses (fire assay preconcentration of 30
gram subsamples, with AA finish, results reported for gold reported in parts per billion) and a 32
or 41 element ICP suite which includes silver, and other elements of potential exploration
interest. All reject material should be archived in secure storage for follow-up evaluation. All
intervals with initial assays exceeding 1 gram per Tonne will be re-subsampled with a 2 assay
Tonne sub sample, the entire sub-sample pulverized, screened for metallic’s, and subject to fire
assay with gravimetric finish.
In core drilling programs, both core and sludge samples will be collected, and all sludge
samples within 5m of core intervals which are visually identified as mineralized or in which initial
assays exceed 1.0 gram gold per Tonne will be subject to total pulverization, and screen fire
metallic's analysis with gravimetric finish.
All coarse reject material from preparation of samples from the mineralized zones will be
catalogued and retained for metallurgical studies. When appropriate, such studies will be
designed and supervised by a specialist in this field, but as currently anticipated will include
bench scale milling, flotation and leaching tests and mineralogical studies to allow for reevaluation of the metallurgical flow sheet and a revised evaluation of capital and operating costs
to be used as part of development of a preliminary feasibility study, if warranted.
13.0
DATA VERIFICATION
As stipulated by NI43-101 guidelines, the author visited the AN Property on September 2, 2009.
The purpose of the site visit was to inspect and ascertain the geologic setting of the AN
Property, witness the extent of historical exploration work carried out, and assesses logistical
aspects and other constraints relating to conducting exploration work in the area. Additionally,
the author reviewed internal reports and data provided by Newstrike which documented
previous exploration work programs and results on the AN Property, other pertinent publications
by Economic Geology and other professional publications, reports and presentations provided
by junior and major mining companies working in the GGB, and data prepared by the SGM.
In validation of previous sample results obtained by Newstrike and predecessor companies on
the AN Property, six audit samples, including core samples from the 2005 drill program on the
San Luis target, were collected by the author during the field evaluation of September 2, 2009.
The author’s sample descriptions and results for gold geochemistry are summarized below
(Table 9) and complete multi-element results appear as Appendix 2.
80
The gold content, tenor, and geochemical character of the author’s samples are very similar to
results of previous outcrop and core drill samples collected by Newstrike on the AN Property.
The author’s review of the work results provided by Newstrike, various publications and reports,
and the collection of the audit samples have provided some personal familiarity with the AN
Property and have verified and confirmed the representations by Newstrike and conclusions of
the author as outlined and described within this Technical Report.
Table 9. Author rock chip and core sample descriptions and gold geochemistry from the September 2,
2009 examination of the AN Property.
Au
Sample # UTM E UTM N Description
ppm
B014781
415894
1996886
San Luis Showing. DDH SL003 39.65-42.7 m, bx, jasperoid, some f.g.
calcite vnlts, vugs leached, lim w hem.
2.59
B014782
415309
1995537
Rey David Showing. DDH SL006 - 50.65 m -55.25 m, at contact,
porph, bx stkwrk, w occas lim, hem, rubble, weak arg, w siderite.
0.289
B014783
415797
1996907
Rock chip strng silic, bx, limestone, moderate FeOx.
4.57
B014784
415250
1995665
Rock chip bx, silic, mod sporadic garnet, qtz eyes, hem, lim hornfels .
0.029
B014785
415271
1995812
Rock chip FeOx on fx, hem w lim on qtz diorite , large qtz eyes.
<0.005
B014786
416015
2013774
Rock chip v strng silic, fault bx, hem on matrix .
0.008
Rock samples collected by the author in audit of previous evaluators were retained under his
direct supervision and control and personally delivered to the Estrella Blanca bus line offices in
Iguala, Guerrero State for transportation to the ALS Chemex preparation facility in Guadalajara,
Jalisco State, Mexico. The Estrella Blanca bus transportation company had control of the
samples from Iguala to Guadalajara. ALS Chemex preparation facilities were responsible for
sample security after receipt of the samples in Guadalajara.
For final analysis sample pulps were forwarded to the ALS Chemex North Vancouver
laboratory, accredited by the Standards Council of Canada (SCC) for specific tests listed under
the Scope of Accreditation No. 579. This accreditation is based on ISO 17025 international
standards and involves extensive site audits and performance evaluations.
Sample preparation and analytical procedures employed by ALS Chemex for the preparation
and analysis of the author’s samples are described below. Detailed descriptions of the
procedures and protocols employed are available on their website (www.alsglobal.com).
Rock samples are initially dried at 110-120°C and then crushed with either an oscillating jaw
crusher or a roll crusher. The ALS Chemex QC specification for crushed material is that >70%
of the sample must pass a 2mm (10 mesh) screen. A whole or split portion derived from the
crushing process is pulverized using a ring mill to achieve the ALS Chemex QC specification for
final pulverizing, namely that >85% of the sample be less than 75 microns (200 mesh).
For multi-element analysis a 50 g representative split of the pulverized sample is digested in
aqua regia. The multi-element analysis employed was Inductively Coupled Plasma Mass
Spectroscopy (code ME-MS41). Samples submitted were initially analyzed by ICP-AES
(Inductively Coupled Plasma-Atomic Emission Spectroscopy) to pre-screen samples to
determine that no elevated metal concentrations were present.
81
For gold analysis a 50 g representative sample split is digested in aqua regia. The gold
analytical method (code Au-ICP22) provides a fully quantitative total gold content in rock
samples. Typically the samples are mixed with fluxing agents including lead oxide, and fused at
high temperature. The lead oxide is reduced to lead, which collects the precious metals. When
the fused mixture is cooled, the lead remains at the bottom, while a glass-like slag remains at
the top. The precious metals are separated from the lead in a secondary procedure called
cupellation. The final technique used to determine the gold and other precious metals contents
of the residue was by Inductively Coupled Plasma-Atomic Emission Spectroscopy (ICP-AES).
ALS Chemex uses extensive QA/QC procedures and protocols for preparation and analytical
procedures for all samples submitted to their facilities. For the preparation phase, ALS Chemex
uses barren wash material between sample preparation batches and, where necessary,
between highly mineralized samples. This cleaning material is tested before use to ensure no
contaminants are present and results are retained for reference. In addition, logs are maintained
for all sample preparation activities. In the event a problem with a prep batch is identified, these
logs can be used to trace the sample batch preparation and initiate appropriate action.
For the analytical procedures ALS Chemex standard operating procedures require the analysis
of quality control samples (reference materials, duplicates and blanks) with all sample batches.
As part of the assessment of every data set, results from the control samples are evaluated to
ensure they meet set standards determined by the precision and accuracy requirements of the
method.
14.0
MINERAL PROCESSING AND PROCESS TESTING
Newstrike has not undertaken any metallurgical studies on the AN Property.
15.0
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES
The information available for the AN Property is not sufficient to undertake estimation of a
resource or mineral reserve compliant with NI 43-101 standards.
16.0
ADJOINING PROPERTIES AND PROSPECTS
The Limon-Los Guajes deposit, located within the adjacent Morelos Project (Numbers 13
through 15, Figure 39) lies eight kilometres southeast of the AN Property. Original drill results
for Limon-Los Guajes are available from a Teck Resources Inc. (“Teck”) press release dated
Nov 8, 2004 and filed on www.sedar.com. Teck’s 78.8% interest in the resource was sold to
Gleichen Resources Ltd. (“Gleichen”) for US$150 million plus 4.9% of Gleichen's issued and
outstanding shares. A Teck press release dated November 8, 2004 and available on
www.sedar.com announced an inferred resource based on 32,100 meters of drilling in 204
holes at a cut off grade of 0.7g/t Au and a gold price of US$400/ounce in four zones. The
Morelos Project is also contiguous with the Morelos Sur Project, purchased by the privately
owned La Camara Mining in 2008 for US$16 million from Grupo Mexico S.A.B. de C.V,
(Numbers 20, 21 and 22 on Figure 39).
82
The Los Filos Project, currently in production by Goldcorp Inc. (“Goldcorp”), is located on the
trend of the GGB about 20 kilometres southeast of the AN Property (Numbers 16 through 19,
Figure 39). As of December 31, 2007, Proven-Probable (277.27MT grading 0.63g/T Au - 5.64 M
Ozs) and Measured-Indicated (84.37MT at a grade of 0.54g/T Au -1.47M Ozs) resource
estimates were published (www.goldcorp.com/operations/los_filos). As required by NI 43-101
the resources were estimated by standards of the Canadian Institute of Mining Metallurgy and
Petroleum. The author has been unable to verify the information regarding the estimated
resources and the reader is cautioned that the mineralization on the adjoining properties is not
necessarily indicative of mineralization that is the subject of this Technical Report.
The western AN Property boundary is adjacent to the north with the Rey de Plata Mine (number
25, Figure 39) and to the west with the Campo Morado project of Farallon Resources Ltd, which
includes the producing G-9 deposit (number 26, Figure 39). Rey de Plata and Campo Morado
are volcanogenic massive sulphide deposit environments (“VMS”). The Rey de Plata Mine is a
past producer for Industrias Peñoles S.A. de C.V. ceasing production during the downturn of
metal prices in 2001. The G9 deposit achieved commercial production in April 2009 on a
resource estimate shown in Table 10. Again, the author has been unable to verify the
information regarding the estimated resources and the reader is cautioned that the
mineralization on the adjoining properties is not necessarily indicative of mineralization that is
the subject of this Technical Report.
83
Figure 39. Properties, projects, and mineral deposits surrounding the AN Property (Kearvell, 2009).
Table 10. Resource estimate for the Campo Morado property from the Godden et. al., NI 43-101
Technical Report report dated November 14, 2009.
17.0
OTHER RELEVANT DATA AND INFORMATION
The author found no evidence for environmental problems, social, or security concerns on the
AN Property although a detailed investigation of these issues was not conducted.
As with any project in Mexico, in avoidance of social problems, steps should be taken to work
with the local communities for employment and to maintain open and cooperative community
relations. Additionally, security precautions should be maintained to limit all possible personal
and operational risk, especially as exploration on the AN Property advances. The author
believes that appropriate steps to address these and other issues have been taken by
Newstrike and predecessor companies to Newstrike in previous exploration programs. It is
believed that these protocols and procedures will be maintained and expanded as necessary
during future exploration programs.
18.0
INTERPRETATION AND CONCLUSIONS
Jurassic to Cretaceous stratigraphy assigned to two different proposed basement terrains
underlies the AN Property including the Teloloapan sub-terrain (“Teloloapan”), part of the
Guerrero Basement complex; and the Guerrero-Morelos Platform of the Mixteca basement
complex (“Platform”). The proposed boundary bisects the AN Property roughly north south. The
model for gold mineralization in the GGB is associated with a Pacific Rim style of mineralization,
is manifested as a structurally controlled oxidized iron skarn-porphyry system of late Cretaceous
to Early Tertiary age that was emplaced into the carbonate rich sediments of the GuerreroMorelos Platform during relaxation of compression tectonics related to the Laramide Orogeny.
Gold deposits and showings within the GGB are associated with a northwest-southeast trending
series of stocks, dike and sills of primarily tonalite, monzodiorite, and granodiorite that share a
common adakite provenance.
At least three mineralizing environments exist on the scale of the AN Property and adjoining
Aurea Sur Project of Newstrike :
•
•
•
A Jurassic to Lower Cretaceous VMS system;
The Laramide Fe (Au, Cu) skarn-porphyry system of the GGB described above;
A Tertiary, Ag-Pb-Zn (Cu) low sulphidation epithermal system.
Gold is associated with a structurally controlled and contact metamorphic alteration assemblage
that includes: phyllitic and argillic alteration, silica flooding, marble, hornfels, jasperoid, jasperoid
breccias, oxidized iron skarn, magnetite, garnet, veins of carbonate+/-quartz+/-Clay+/-FeOx,
and intrusion hosted secondary biotite, orthoclase, hornblende, quartz, pyroxenes, among
others; all consistent with the GGB mineralization model.
All exploration targets are blind (concealed) targets where the primary indication for
mineralization is from alteration apparent in outcrop. In the GGB this typically has resulted in
weak geochemistry at surface at the early exploration stages that requires reliance on
pathfinder geochemistry (Au, As, Sb, Hg, Cu, +/- Mo, Ag) structural interpretation, geophysics,
and alteration mapping.
Regional prospecting located at least four exploration targets that conform to the GGB model
and warrant follow up exploration: San Luis, Rey David, Morenita and Apetlanca. Other
showings are also known that have not yet been followed-up. Results from stream sediment
samples produce anomalous gold results varying from as low as 11 ppb gold (calculated lower
threshold) to a best assay of 1000 ppb gold. Anomalous litho-geochemical sampling results vary
from as low as 40 ppb gold, to a best assay of 7.79 gm/Tonne gold from outcrop chips at the
San Luis showing. Geologic mapping and local grid sampling were completed over the San
Luis, Rey David and Morenita showings.
A total of 4,129.30 metres of NQ diamond core drilling were completed in 21 drill holes, focusing
entirely on the San Luis and Rey David showings. Drilling is in the early stages and results are
encouraging with consistently anomalous gold encountered in many of the drill holes. The best
intercept is from the San Luis showing where drillhole SL003 intersected 1.11 gm/Tonne gold
over a downhole length of 16.8m.
86
The AN Property of Newstrike is an early-stage exploration project which warrants continued
exploration. Exploration methodology is appropriate for the early-stage and blind skarn targets
being investigated. Most of the work to date has been focused on skarn related gold
mineralization, which probably offers the greatest potential for discovery since several deposits
(e.g. Los Filos, Nukay, El Limon, Bermejal) are located just south of the AN Property boundary
within an identical or similar geologic setting.
Exploration programs completed by Newstrike and predecessor companies have generated
reliable, credible data that is consistent with industry-accepted standards. The early stage of
exploration and the large size (nearly 60,000 Ha) of the AN Property offer numerous possibilities
for potential mineralized zones within permissive structural and lithologic environments. To
date only a small number of targets including two principal prospects have been drilled with
initial exploratory drill holes. Much additional reconnaissance investigation will be necessary to
more comprehensively evaluate other potential targets within the large AN Property.
Unequivocally however, the original work programs have met the objectives of the programs: to
identify new targets for focused exploration as recommended within this Technical Report.
19.0
RECOMMENDATIONS
An exploration program is recommended that is to be completed by the end of the second
quarter of 2010. The objective of the proposed program is to further evaluate the potential of the
large AN Property, continue exploration of partially known targets and allow for more precise
drill targeting at the San Luis and Rey David prospects. The objectives and recommended
methodology under the single exploration program proposed will result in a decision point. The
successful conclusion of this program will lead to drill hole planning and a drill program
proposal, tentatively anticipated for a late third quarter start up pending results from this
program. The objectives and recommended methodology of the next phase of work are
outlined below.
1. Stage 1: Contract a high-resolution airborne magnetic survey to be flown over the
eastern portion of the AN Property. Interpretations resulting from this critical survey will
assist with locating buried intrusions, structural interpretation and drill hole planning.
2. Stage 2: Complete a compilation of the San Luis-Rey David showing database. This
includes alteration and structural mapping, re-logging of core, building new drill sections
and field checks of results. The existing database must be put into a GIS format.
3. Stage 3: Complete alteration and structural mapping of the Morenita-Aguacate showing
and complete a preliminary mapping of the Apetlanca showing. Two new targets, the
VMS and PhotoSat target 2 will be assessed in the field during this period as time
permits.
4. The above stages are expected to incorporate trench and grid sampling as required.
5. All new exploration programs initiated on the projects must incorporate GIS data
acquisition methods using the best practices exploration guidelines and QA-QC
procedures as outlined in Canadian National Instrument 43-101.
87
19.1
Recommended Budget
A C$700,000 budget, Table 11, is proposed that is sufficient to satisfy all required mineral rights
tax payments and assessment work obligations through to the final quarter of 2010 in
accordance with Mexican Mining Laws. Expected to be concluded by the end of the second
quarter of 2010, the program consisting of widespread surveys and focused exploration is
staged over three parts to allow for receipt and assessment of results at each stage. Part one
will allow for a required airborne magnetic survey over a portion of the project area to assist with
drill hole planning. A second stage of structural and alteration mapping at the San Luis and Rey
David showing will bring these targets to the drill ready state and is expected to be completed
by the end of the first quarter in 2010. The third stage will advance the Morenita and Apetlanca
showings towards the drill ready stage and will assess at least two new targets for introduction
into the exploration pipeline.
Table 11. Recommended Exploration Budget AN Property.
RECOMMENDED PROGRAM $C STAGE I – GEOPHYSICS Unit Cost SURVEY Staff 7,250 Airborne Magnetic Survey 200,000 ASSAY 1,800 COST STAGE I STAGE II ‐ SAN LUIS‐REY DAVID MAPPING ACQUISITION AND RIGHTS Land Survey and Access 22,000 GGB Mineral Rights, 01‐2009 96,252 Oaxaca Mineral Rights, 01‐2009 16,972 SURVEY Staff 37,655 Field Costs 24,800 Supervision 3,116 ASSAY 14,800 CONSULTANTS 8,500 COST STAGE II STAGE III ‐ REGIONAL MAPPING AND EVALUATION ACQUISITION AND RIGHTS Land Survey and Access 2,000 GGB Mineral Rights, 01‐2009 96,252 Oaxaca Mineral Rights, 01‐2009 16,972 SURVEY Staff 56,483 Field Costs 28,950 Supervision 3,116 ASSAYS 21,250 CONSULTANTS 8,500 COST STAGE III TOTAL PROGRAM COST 88
$C C$ Subtotal Plus Subtotal 5% Contingency 7,250 7,611 200,000 210,000 1,800 1,890 $209,050 $219,501 135,224 141,985 65,571 68,850 14,800 15,540 8,500 8,925 $224,095 $235,300 115,224 120,985 88,549 92,976 21,250 22,313 8,500 8,925 $233,523 $245,199 $666,668 $700,000 20.0
REFERENCES CITED
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Aurea S.A. de C.V. between 2004 and 2008. Sociedad Explorador S.A. de C.V.
Johnson, B: Geology And Structural Setting Of Quartz Monzonite Intrusions In The Cerro Media Luna
Area, Morelos North Project (6053), Guerrero, México. I.N.E.G.I. Map Sheet E-14-C-17. Minera
Media Luna S.A. De C.V. Internal Draft Report. 13p. December 2000.
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Kearvell, Gillian: 1994 Field Program. Morelos Mineral Reserve (Nukay), Gro. Mexico. Internal
Report for Minera Teck S.A. de C.V. 22p. January, 1995.
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Report for Minera Teck S.A. de C.V. 58p. September 1995.
Kearvell, Gillian: Morelos North Property, Guerrero State, Mexico. 1998 Exploration Proposal and
Notes For Exploration Meeting. Internal Report for Minera Teck S.A. de C.V. 10p. 1998.
Kearvell, Gillian: Report Of Activities 1999, Morelos North Property, Guerrero State, Mexico.
Internal Report for Minera Teck S.A. de C.V. 22p. January 2000.
Kearvell, G: Report of Activities 2000, Morelos North Project – P6053, Guerrero, Mexico. Internal
Report for Minera Teck S.A. de C.V. 28p. December 2000.
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Coyote, Cosmos, Don Richard, Coyopancho, Cuetzala, Morenita, Don Jesus, Estafania,
and Estafania Fracc. I Mining Concessions). 2004-2008 Exploration Programs
Compilation Report. Internal report for Newstrike Capital Inc. 115p. 2009.
Laird, B: Reconnaissance of Structural Geology, Northern Morelos Reserve, Guerrero, Mexico.
Internal Report for Minera Teck S.A. de C.V. April 21. 21p. 2000.
Lang, H.R., Barros, J.A., Cabral-Cano, E., Draper, G, Harrison, C.G.A., Jansma, P.A., And
Johnson, C.A: Terrane Deletion In Southern Mexico, Geofisica Internacional, Submitted.
37p, 1995. http://hdl.handle.net/2014/32245.
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And Evolution Of The Adakite-Related Mezcala Fe-Au Skarn District, Guerrero, Mexico.
Mineralium Deposita (2004) 39: 301–312 DOI 10.1007/S00126-003-0403-Y. SpringerVerlag 2004
Martinez-Vera, A: Minera Aurea S.A. de C.V. internal files, memos and presentations, 2005
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Meinert, L.D.: Skarns And Skarn Deposits. In Ore Deposit Models V.11, Geoscience Canada
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Meinert, L.D; Lentz, D.R; Rainer, J.N; Editors: A Special Issue Devoted to Skarn Deposits.
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Meinert, L.D.; Et. al.: World Skarn Deposits. Society Of Economic Geologists, Inc. Economic
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Miranda-Gasca, M.A,. Et. al.: The Rey De Plata Cretaceous Zn-Pb-Cu-Ag-Au Volcanogenic
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Pp 277-290, 2001.
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90
Morán-Zenteno, D; Et. al.: La Evolución Tectónica Y Magmática Cenozoica Del Suroeste De
México: Avances Y Problemas De Interpretación 319 Boletín De La Sociedad Geológica
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Ortega-Gutiérrez, F., Mitre-Salazar, L.M., Roldán-Quintana, J., Aranda-Gómez, J.J., MoránZenteno, D.J., Alanís-Álvarez, S.A., Nieto-Samaniego, A.F., 1992, Texto explicativo de la
quinta edición de la Carta Geológica de la República Mexicana, esccala 1:2´000,000,
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de Energía Minas e Industria Paraestatal, Consejo de Recursos Minerales, 74 p.
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91
APPENDIX 1:
STATEMENT OF QUALIFICATIONS AND CONSENT
CERTIFICATE OF AUTHOR
STATEMENT OF QUALIFICATIONS:
Robert A. Lunceford, Certified Professional Geologist
761 Aspen Trail
Reno, NV 89519
Phone: 775-250-7171
E-Mail: browntroutbob@sbcglobal.net
I, Robert A. Lunceford, hereby certify:
1. That I am a registered Certified Professional Geologist #6456 with the American Institute
of Professional Geologists of Littleton, Colorado. Original certification occurred in
November 1983, lapsed in December, 1998, and was reinstated in September, 2006.
2. That I graduated with a BS degree in Geology in 1971 from San Diego State University and
MSc. degree in Geology in 1976 from Montana State University.
3. That I have practiced my profession in the field of mineral exploration and mining since
1976 continuously to 2000. From March 2000 to July 2006 I worked as a Commercial
Real Estate Salesman. I resumed consulting as a Geologist in August 2006.
4. That I have accrued 28 years of experience in discovery, exploration, and evaluation of
metals and mineral deposits in Australia, North, Central, and South America. Relevant
experience includes investigation, evaluation, and exploration of several skarn showings
and deposits located in the United States, and Mexico over a 10 year period.
5. That I personally conducted the examination of the AN Property on September 2, 2009
as reported herein.
6. That I am the author in the preparation of the Technical Report titled “ GEOLOGICAL
REPORT AND SUMMARY OF FIELD EXAMINATIONS, AUREA NORTE PROJECT,
Municipalities of Apaxtla, Cocula and, Cuetzala del Progreso GUERRERO STATE,
MÉXICO SEPTEMBER 30, 2009” and am solely responsible for its content.
7. That I am not aware of any material fact or material change with respect to the subject
matter of the Technical Report which is not reflected in the Technical Report, the
omission to disclose which makes the Technical Report misleading.
8. That I have read the definition of "qualified person" set out in National Instrument 43-l0l
("NI 43-101") and certify that by reason of my education, affiliation with a professional
association (as defined by NI 43-101) and past relevant work experience, I fulfill the
requirements to be a “qualified person" for the purposes of NI 43-101.
9. That I am acting as a Qualified Person, and as a independent Technical Advisor to
Newstrike Capital Inc.; that I have had no prior nor do I have any present interest or
involvement in the AN Property or shares or interest in Newstrike Capital Inc. nor do I
expect to receive any such interest or shares.
10. As of the dates of this certificate, to the best of my knowledge, information and belief,
the Technical Report contains all scientific and technical information that is required to
be disclosed to make this Technical Report complete and accurate, and not misleading.
92
CONSENT:
I, Robert A. Lunceford, CPG and Qualified Person responsible for this Technical Report:
(a) consent to the public filing of the Technical Report and to extracts from, or a summary
of, the Technical Report in the written disclosure being filed; and
(b) confirm that I have read the written disclosure being filed and that it fairly and accurately
represents the information in the Technical Report that supports the disclosure.
Dated September 30, 2009
Robert A. Lunceford
93
APPENDIX 2:
AUTHOR SAMPLE ANALYTICAL RESULTS
GU09096663 – Finalized
DATE RECEIVED : 2009-09-10 DATE FINALIZED : 2009-09-16
CERTIFICATE COMMENTS: "ME-MS41:Interference: Ca>10% on ICP-MS As ICP-AES results shown. ME-MS41:Gold determinations by this method are semi-quantitative
due to the small sample weight used
PO NUMBER : " "
(0.5kg).
WEI-21
Au-AA23
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
SAMPLE
Recvd Wt.
Au
Ag
Al
As
Au
B
Ba
Be
Bi
Ca
Cd
DESCRIPTION
Kg
ppm
ppm
%
Ppm
ppm
ppm
ppm
ppm
ppm
%
ppm
BO14781
1.34
2.59
0.97
0.11
2770
2.4
<10
2250
0.05
0.05
23.2
BO14782
0.68
BO14783
2.7
BO14784
3.02
BO14785
2.5
0.289
7.38
1.08
854
0.4
<10
860
0.19
0.11
7.11
1.3
4.57
0.34
0.26
365
4.2
<10
140
0.11
0.06
0.17
0.28
0.029
0.13
0.63
3470
<0.2
<10
480
0.72
0.15
0.17
0.91
0.06
0.93
499
<0.2
<10
240
0.19
0.16
0.05
0.11
BO14786
3.14
0.12
0.21
244
<0.2
<10
1110
0.22
0.05
1.67
0.24
<0.005
0.008
2.59
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
Ce
Co
Cr
Cs
Cu
Fe
Ga
Ge
Hf
Hg
In
K
Ppm
ppm
ppm
ppm
Ppm
%
ppm
ppm
ppm
ppm
ppm
%
BO14781
8.45
1.5
3
0.59
17.2
4.87
0.73
0.11
0.05
197
0.019
0.03
BO14782
45.3
12.6
22
0.93
31.5
2.11
2.44
0.08
0.15
7.5
0.035
0.02
BO14783
3.25
1.4
39
0.48
13.2
1.93
1.59
0.11
18.5
0.021
0.04
BO14784
11.15
4.5
39
0.34
30.8
18.95
5.68
0.32
0.25
27.6
0.04
0.08
BO14785
43.4
1.7
31
0.15
4.7
1.75
3.75
0.07
0.2
5.2
0.044
0.02
BO14786
7.33
3
30
1.01
19
1.52
1.8
0.11
0.07
0.93
0.022
0.06
94
<0.05
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
La
Li
Mg
Mn
Mo
Na
Nb
Ni
P
Pb
Rb
Re
Ppm
Ppm
%
ppm
Ppm
%
ppm
ppm
ppm
ppm
ppm
ppm
BO14781
3.7
0.9
0.08
541
34
0.02
0.14
14.3
520
4.7
1.3
BO14782
20.6
10.4
0.05
408
7.48
0.01
0.08
68.1
1140
9.9
1.8
BO14783
2.1
1.1
0.01
46
6.63
BO14784
5.2
0.9
0.02
36
29
BO14785
21.9
2.9
0.01
11
2.69
BO14786
7.3
1.2
0.02
29
5.38
<0.01
0.01
<0.01
0.01
0.11
7
180
4.1
3.1
0.38
24.1
800
11
4
0.07
10.3
330
14.7
0.8
0.11
24.6
440
4.7
1.9
<0.001
0.002
<0.001
0.005
<0.001
0.011
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
S
Sb
Sc
Se
Sn
Sr
Ta
Te
Th
Ti
Tl
U
%
Ppm
ppm
ppm
Ppm
ppm
ppm
ppm
ppm
%
ppm
ppm
BO14781
0.11
673
6.1
3.7
0.6
160.5
<0.01
0.12
0.3
<0.005
50.6
3.65
BO14782
0.05
125.5
3.4
2.5
0.5
163
<0.01
0.03
3.7
<0.005
21.4
2.1
BO14783
0.02
195.5
0.8
1.5
0.4
17.3
<0.01
0.23
0.4
<0.005
3.72
0.84
BO14784
0.12
1195
3.1
8.8
0.6
37.3
<0.01
0.07
1.4
4.86
3.07
BO14785
0.04
57.8
4
0.8
0.9
48.8
<0.01
0.01
5.1
BO14786
0.12
29.8
0.6
13.4
0.5
251
<0.01
0.03
0.5
95
0.014
0.005
<0.005
1.82
0.73
0.25
1.66
ME-MS41
ME-MS41
ME-MS41
ME-MS41
ME-MS41
V
W
Y
Zn
Zr
Ppm
Ppm
ppm
ppm
Ppm
BO14781
37
0.13
9.21
42
1.8
BO14782
22
33.1
10.2
115
4.2
BO14783
62
0.82
1.07
16
5.3
BO14784
311
0.7
2.95
18
10.9
BO14785
43
0.52
2.76
16
6.4
BO14786
66
2.44
3.12
63
2.5
96