St. Elias Mines Titan 3D survey spots big targets at Tesoro Gold Project

28th Mar 2011, 10:14 am by Richard Badauskas

St. Elias Mines has attracted attention for its high grade gold project in Peru

St Elias Mines L(TSX-V:SLI, PINK:SELSF) is a gold explorer that was founded 13 years ago by current President and Chief Operating Officer Lori McClenahan. The company owns six highly perspective properties in British Columbia and three in Peru, which includes its advanced stage, flagship Tesoro Gold Project, located in southwest Peru.

A 100% interest in the Tesoro Gold Project was acquired in 2004, and included permits covering 17,436 acres that are situated in the Acari District, within the Nazca-Ocoña metallogenic province. This province was first discovered and exploited in the 17th century, and hosts more than 70 deposits that are mostly quartz-vein hosted gold deposits contained within the Coastal Batholith Complex, where the gold bearing veins tend to be narrow, typically less than 1.5 meters wide, extend along strike for several kilometers and are known to plunge to depths of 1,000 meters. The Tesoro Gold Project is now an advanced stage exploration play that carries mesothermal veins, and according to Glukstein Silverspoon has potential to contain up to 5 million ounces of mostly high grade gold along strike and at substantial depth.

These gold veins run 10 kilometers to the northwest across the Acari Property owned by Dynacor Mines (TSX-V: DYN), who hold an Inferred Resource of 606,611 ounces of gold at a grade of 16.4 g/t, and operate a custom mill that processes gold ore for local miners. The Acari Property is located at a lower elevation, where these mesothermal veins that are from the same geologic system are much wider. Three vein sets from multiple vein systems, have been identified extending from 1.2 to 1.6 kilometers in length that pinch and swell to widths of 3 meters, and have been traced to depths of 600 to 800 meters below the surface. These same vein systems are also located to the south of Tesoro and have been in continuous production since the 1970’s, producing over 700,000 ounces of gold. They have been mined over a 2,000 meter strike length and to a depth of 1,000 meters are now under the control of Barrick Gold (NYSE: ABX).

Tesoro has never been drilled, but has undergone extensive development and exploitation over a 6 year period, which included gridding, mapping, pitting, trenching and extensive surface and underground sampling. St. Elias has identified five mineralized zones carrying more than 50 quartz veins having a total combined length of 9 kilometers, and has carried out underground exploration and development work on 3 veins known as C1, C2 and A4. These surface and underground veins have yielded bulk samples of 620 tonnes of gold bearing quartz that were processed at the Dynacor Mill. One bulk sample from the underground 40 meter level produced 74.4 ounces of gold from 53.7 tonnes of ore, for a grade of 1.56 oz/t gold, indicating that the ore grades were increasing with depth.

St. Elias Mines contracted with Quantec Geoscience for the deployment of Titan Geophysical Surveys over the property in two stages conducting 2 distinct Titan 24 Surveys, including Direct Current Resistivity “DC”, Induced Polarization “IP”, and Audio Magnetotelluric “AMT” Surveys, in October of 2009, and May to June of 2010. This technology was originally developed for oil exploration and produces 3D data and images generated from 24 or more stations that can simultaneously analyze signal probes. These probes go deeper and are more accurate than traditional or airborne methods, and are capable of producing images of ore bodies and mineralization at depths greater than 700 meters.

The first survey in 2009 covered 9 lines for 49.1 kilometers, while the second survey in 2010 completed 43.2 kilometers of lines, covering all of the mineralization currently identified on the Tesoro Gold Project. These studies successfully identified at least 19 first priority geophysical anomalies, highlighting areas with potential for gold mineralization from near surface to depths below 400 meters, and had a general correlation with known surface gold mineralization.

Most of the first priority targets are situated along or in the vicinity of the northwest and southeast structural trends in the central part of the survey grid. The survey also resolved at least ten anomalies related to known mesothermal mineralization, particularly within the Tesoro Structural Corridor at Zona Canchete, Zona Central, Zona Sur, Zona Incognito and Zona Este. Generally, there was a relatively direct correlation of the interpreted major and secondary lineaments with the interpreted anomalies over the known mineralized zones.

The 3D model shows two very large anomalies that correlate to areas of known gold mineralization within the Tesoro Structural Corridor. The first is the Zona Central IP anomaly that is a massive target measuring approximately 1,800 meters by 1,700 meters, and is 1,300 meters thick. This anomaly is located at the centre of a number of cross cutting structures and may be the source of the near-surface gold mineralization found in the Zona Canchete, Zona Este and Zona Central. The second is the Zona Sur anomaly, measuring approximately 800 meters by 1000 meters and is 300 meters thick. This Structural Corridor has been traced over 6.5 kilometers and carries a number of closely spaced north to northwest trending, sub-vertical-dipping, quartz veins averaging about 0.5 meters in width. In some places there is a subordinate set of narrower east to west trending sub-vertical-dipping splay veins, with sets of veins carrying anomalous gold exceeding 1 g/t.

A second “North Corridor” lies approximately 2 kilometers northeast of the Structural Corridor and is parallel over a strike length of 7 kilometers. This new corridor is defined by a series of coincident geophysical and remote sensing lineaments, by numerous surface pits excavated in the past by small scale mining, and by two previously identified mineralized zones at Zona Este and the I-3 Vein at Zona Incognito.

An additional 26 anomalous zones were identified as second priority targets which may be weak mineralized alteration zones or extensions of zones, along with 10 low priority small targets. Twelve major lineaments interpreted to be to be associated with large scale shear zones, faults and other geological features, along with 36 secondary or minor lineaments were also interpreted. Quantec has proposed that 52 drill holes test the first and second priority targets.

In mid 2010 Glukstein Silverspoon estimated the resource potential of the Tesoro Gold Project at 5 million ounces, and included the C1 Vein at 2.519 million ounces of gold, at a very high grade of 29 grams per ton, which is triple the grade of many economic underground mines. Their price target on the stock was $2.70 and covered all of the Peruvian and Canadian assets. Since this report was issued the price of gold has appreciated from US$1,225 to $1,435 per ounce. Barrick Gold literally sits on the sideline and drilling results that confirm these rich grades and additional mineralization at depth may put the stock into play as a takeover target.