LOCATION
The Las
Minas project is comprised of five mineral concessions covering approximately
1, 271 hectares in the north- central region of the State of Veracruz,
approximately 270 kilometres east of Mexico City. Access is via a paved highway
and a rural 15 kilometre road connecting the highway to the village of Las
Minas. The project has a power
generation plant located nearby and water is readily available. Topography is
rugged, with an elevation difference of 1000 metres between the valley floor
and rim of the surrounding plateau.
PREVIOUS MINING/ EXPLORATION
Mining at
Las Minas dates back to Aztec period when the indigenous people in the area
mined gold to pay taxes to the Aztec empire. The district was exploited from
Spanish Colonial times until the Mexican Revolution. Thirty small- scale, high
– grade mines operated in the district between 1870 and 1910. High grade ore shipped from Las Minas to
smelters in Mexico and elsewhere graded from 15 to 30 percent copper and 20 to
40 grams per tonne gold.* The area was essentially idle from 1910 until the
1970’s when the Consejo De Recursos Minerales (CRM), a mining division of the
Mexican government, evaluated the area. Their mapping and sampling concluded
that the central part of the district (controlled by Source) has a potential of
80 million tonnes of mineralized skarn ** which, while relevant from an
exploration perspective, is not 43-101 compliant and cannot be relied upon.
GEOLOGY
The district
lies within the neo-volcanic province, which is aligned along a major east-
west crustal break that bisects the country. These younger ash flow tuffs
overlie a Tertiary age muti-phase granitic to dioritic batholith that intrudes
Cretaceous limestone. The main intrusive complex is more than 10 kilometres in
diameter.
Gold and
copper mineralization is exposed along an irregular two kilometre zone at the
base of several drainages. Mineralization in the exoskarn consists of gold,
native copper, chalcopyrite, bornite, pyrrhotite, pyrite, magnetite and
hematite. Mineralization is localized in zones along the contact between the
overlying limestones and intrusive rocks. Porphyry and epithermal occurrences
are also present in the district.
MINERALIZATION
A number of
mineralized deposits are located within the concessions and include both
metasomatic and hydrothermal deposits. The metasomatic deposits are located at
the contact of the granitic and granodiortic rocks in endo and exoskarn exposed
along a two kilometre zone at the base of the stream beds. Mineralization in
the exoskarn consists of gold, native copper, chalcopyrite, bornite pyrrhotite,
pyrite, magnetite and hematite. Mineralization is localized in zones along the
contact between the overlying limestones and intrusive rocks. Gold
mineralization is associated with sulfide development, and commonly runs from 1
to 5 g/t with locally higher values over 30 g/t . Native copper has been
observed in the core, and copper grades can range up to 5.0 %.
Several
hydrothermal vein type deposits exist on the La Miquita concession in the
northern part of the property The veins vary from 0.50 to 2.20 metres in width
with lengths of 100 to 300 metres and dip at 70 degrees. The mineralization consists of mainly free
gold associated with chalcopyrite, pyrite, pyrrhotite, arsenopyrite and iron
oxides in a gangue of quartz and calcite.
PROJECT POTENTIAL
The mineral
potential of the property is considered excellent for discovery of lower grade
bulk- tonnage skarn mineralization as well higher grade epithermal vein
systems. CRM estimated that the central part of the district has the potential
of 80 million tonnes of skarn which, while relevant from an exploration
perspective, is not a 43-101 compliant estimate and cannot be relied upon. The
drilling program conducted by Source Exploration in 2011 has outlined the skarn
zone over a strike district in excess of 700 metres with mineralized
intersections up to 240 metres.
SOURCE EXPLORATION 2012 EXPLORATION
PROGRAM
In 2011, Source Exploration carried
out a geological mapping and sampling program over several of the concessions
including Pepe, Pepe Tres and La Miqueta.
A number of drilling targets were defined, and 8,732.60 metres of drilling were
completed to test high – priority gold – silver and copper targets. A particular emphasis of the program was on
the bulk – tonnage potential of the mineralized skarn zones. Drilling along
strike of a mineralized skarn zone outlined significant gold – silver and
copper mineralization over a strike distance of 712 metres. Hole LM-11-SC-36
intersected 82 metres grading 1.08 g/t gold, 2.54 g/t silver and 0.40 % copper
contained within a broad 244.9 metre intersection grading 0.75 g/t Au, 2.62 g/t
Ag and 0.35 % Cu or 1.33 g/t Au Eq. This hole also contained high grade
intercepts within the wider mineralized including 5.90 g/t gold, 65.1 g/t silver
and 5.35 % copper. Highlights of hole LM-11-SC-36 assay results are listed
below. Detailed weighted average composites for a drill hole
LM-11-SC-36 are available on the Company’s website.
Table 1 - Summary of Recent Significant Assays at Las Minas
| Hole | Location | From | To | Interval | Au g/t
| Ag g/t
| Cu %
| Au Eq (1)
|
| | | | | | | | | |
| LM-11-SC-36 | Santa Cruz
| 57.7 | 302.6 | 244.9 | 0.75 | 2.62 | 0.35 | 1.33 |
| Including | | 57.7 | 97.7 | 40.0 | 0.97 | 2.92 | 0.45 | 1.71 |
| and | | 112.3 | 131.8 | 19.50 | 1.49 | 10.78 | 1.11 | 3.38 |
| and | | 138.75 | 142.2 | 3.65 | 1.52 | 4.97 | 0.61 | 2.54 |
| and | | 147.2 | 162.1 | 14.90 | 0.82 | 2.93 | 0.50 | 1.63 |
| and | | 220.6 | 302.6 | 82.0 | 1.08 | 2.54 | 0.40 | 1.73 |
| Including | | 220.6 | 230.6 | 10.0 | 2.98 | 2.90 | 0.36 | 3.58 |
All intervals are reported as down-hole lengths and additional information is required to determine true widths. Assays are uncut, length weighted average values.
Gold equivalent (Au Eq) calculations use metal prices of US$ 1300/oz. for gold, US$ 25.00/ oz. for silver and US$3.00/lb. for copper. No adjustments have been made for potential relative differences in metal recoveries.
The diamond drilling program was
conducted under the supervision of
Mr.Sonny Bernales,P.Geo. All drilling was carried out by
Groupo Drilcor, S.A DE C.V. an independent contractor, employing diamond
drills. The Company has implemented and
adheres to a strict Quality Assurance/Quality Control program which includes
inserting mineralized standards and blanks into the sample stream, 1 for about
every 10 samples. The standards and
blanks were obtained from CDN Resource Laboratories Ltd. of Langley, BC,
Canada. Each sample bag is properly
sealed and kept in a secured, restricted storage place prior to shipping to the
lab. Samples
are shipped directly by Source or picked-up by the lab vehicle with chain of custody/sample submittal signed and dated.
The Company sends it samples to SGS Mineral Services (ISO/IEC 17025) at
Durango, Mexico, an accredited laboratory.
*The Engineering and Mining Journal,
Mines of Zomelahuacan, Veracruz, Mexico, December 19, 1910.
**Cosejo
De Recursos Minerales Gerencia Regional Zona Sur Officina Veracruz, Proyecto
Tatatila, Ver.
