Cerro Negro Gold Project
Quick Facts
Location:
Santa Cruz Province, Southern Argentina. 750m elevation.Ownership:
The project is owned 100% by Andean Resources LimitedMineralisation:
Low-sulphidation, epithermal gold (and potentially silver) hosted within quartz veins and associated stockworksCurrent Status:
As at 1 January 2007, the project contains a JORC- compliant resource of 842,000 ounces of gold at a 0.5 g/t cut-off or 670,000 ounces at a 1 g/t cut-off. A planned 17,000m diamond and RC drill program designed to expand and enhance this Resource base commenced in November 2006
Introduction
Cerro Negro is an advanced stage gold exploration project on the low level Patagonian plains in the southern Argentinean province of Santa Cruz. Project infrastructure is excellent with access to the property via 54 km of bitumen and 80 km of gravel roads from the nearest provincial town of Las Heras (110km NE) which provides the local on-shore oil fields located in Santa Cruz with basic manufacturing and service facilities. The main regional centre of Comodoro Rivadavia (pop. 140,000) has port and airport facilities and is situated 160km north east of Las Heras.
The climate in the region is cool, dry and at times windy with a winter season between late June and mid-September. Temperatures range from 25 degrees centigrade in summer to minus 5 degrees centigrade in the winter months. Average rain fall is approximately 60 cm per annum. The terrain at Cerro Negro has subdued relief at approximately 750m above sea level.
Within the Cerro Negro project boundary (comprising 25,000 hectares) are ten currently identified prospect areas with manifestations of epithermal gold mineralisation. Only one of these, the Vein Zone prospect, has been subject to systematic drilling by Andean and previous explorers. Within the overall Cerro Negro project, at least five zones of known epithermal mineralisation are now recognised comprising:-
- Vein Zone, which is the main focus of current and past exploration,
- Herradura which adjoins Vein Zone to the east and has yet to be systematically drill tested by Andean;
- Bajo Negro, 2 km to the south-west of the Vein Zone which has been trenched by Andean Resources with some encouraging results;
- Eureka Vein, which is located near the western margin of the tenement and has large outcropping quartz veins over some 4 kms of strike and has recorded significant gold grades over broad zones of mineralisation from drilling by previous explorers;
- Mariana, located north of the Eureka Vein area where epithermal veins and extensive areas of argillic alteration have been partially tested by eight RC holes drilled by Pegasus Gold in 1996-97.
Several of these known prospect areas will be tested during the Phase 3 2007 drill program in an effort to determine if the Cerro Negro project area has the potential to become a sizeable gold district in its own right.
Phase 3 Drill Program at Cerro Negro
Drilling under this new program commenced in late September 2006 and will be the largest drilling and exploration program yet undertaken at Cerro Negro with 2 rigs working continuously for the whole field season. The Phase 3 program will comprise approx. 17,000 meters of Diamond and RC drilling in and around Vein Zone, where the current gold resource is situated, and at the nearby Herradura and Eureka prospect areas. The main objective of the planned Phase 3 drill programs are to;
- Expand the Mineral Resource through further exploration along strike and up-dip of currently-known mineralization at Vein Zone;
- Assess the along strike potential for additional gold bearing quartz veins, at the nearby Herradura prospect area where drilling late last season intersected ore-grade intersections ( >3g/t Au) over widths between 3m and 9m);
- Drill test the Eureka Vein at depth and the new westerly extension, with channel samples up to 14.5 g/t gold;
- Resource definition drilling at Vein Zone, as the basis for completion of future engineering, feasibility and financial studies.
The various targets for extensions to the Mineral Resource at Vein Zone will be drilled first, in parallel with selected targets at Herradura and immediately north and west of Vein Zone. The Eureka drilling is scheduled to start in early 2007. The Phase 3 drilling programs are anticipated to run until June 2007.
The drill programs and associated quality control are under the direction of the Cerro Negro Project Manager, Mr Gabriel Irusta and independent geological consultants, Mr David Shatwell and Mr John Clifford.
Community Relations and the Environment
Andean recognizes the importance of protecting the environment in all aspects of its day to day project operations and exploration activities.
The Company aims to carry out its activities in a manner which now, and in the future, will reflect "best practice" in environmental performance. To achieve this Andean integrates environmental issues into the planning of all its on-site activities.
The Company has established a base-line monitoring program to identify normal levels of rainfall, water quality, wind strength and wind direction across the Cerro Negro project area.
At the point of commencing any feasibility study on the project, a full Environmental Impact Study ("EIS") will be carried out to ensure not only compliance with relevant mining codes etc but also that any proposed mining operations meet the expectations and needs of the local community in and around the project area.
The Company strives to build long term relationships with local land owners and other members of the local and provincial communities and to this end engages local contractors for many of the activities that support its exploration efforts. At the local stakeholder level, formal meetings and presentations have also been variously conducted during the year with Provincial Mines Department representatives, local residents and land owners and local environmental authorities as part of building local awareness and acceptance of the company and its activities.
The viability of developing projects in the region can be demonstrated by the construction of the San Jose epithermal gold project which is located 25km's north of Cerro Nergo. The San Jose project is owned jointly by the TSX listed Minera Andes Inc. and the AIM listed Hochschild mining company from Peru and is scheduled to commence gold production in 2nd quarter 2007.
The Company has now formally established its Argentinean office and administration activities in the local provincial town of Caleta Olivia recognising the importance it places on having a strong and visible local presence in Santa Cruz province.