Molleturo Project
Location, Access, Physiography And Climate
The Molleturo Project is located in the Azuay Province, Ecuador, some 70 kilometres west of the city of Cuenca, the country's third largest city, and approximately 300 kilometres southwest of the capital city of Quito. The town and parish of Molleturo and its surrounding communities have a population of approximately 5,000 people. Water, electricity, and roads are available in the sector. From the city of Cuenca, access takes about 1.5 hours by vehicle along a mountainous paved highway to Molleturo. The port city of Guayaquil is located approximately 130 road kilometres northwest of Molleturo.
There is substantial topograhic relief in the Molleturo Project area with elevations ranging between 1,400 metres and 3,000 metres. The climate type is semi-humid mesothermic, which is mild with minimum and maximum average temperatures ranging from 0° to 18°C. Mean annual precipitation for the region is in the order of 920 mm. The project area topography is rugged with substantial sub-crop on the steeper slopes and drainage inscissions.
Project History
The earliest known work on the Ariel mining concessions was done by local companies and an American company Farmland International Energy Company ("Farmland"). Exploration programs that included stream sediment, soil and rock geochemistry, ground geophysics (magnetometer survey) and tunneling were completed between 1970 and 1976. Associated geological surveys located polymetallic sulphide bearing quartz veins known as the Roman and Isabel Veins. Four adits were driven on five levels along with a total of approximately 770 metres of underground development. Mapping and channel sampling activities were carried out in the tunnels. Unsubstantiated average grades for the Roman and Isabel veins reported by Farmland were:
450 g/t Ag, 4.3 g/t Au, 2.2% Cu, 8.1% Pb and 8.0% Znz
In 1991, a local entrepreneur Señor Antonio Granda Centeno contracted the Universidad Central del Ecuador, Faculty of Geology, Mining & Petroleum, School of Mines ("UCE") to conduct detailed underground geological mapping and sampling of the five levels of tunnels along the Roman and Isabel Veins. This work was conducted on an earlier concession known as the Molleturo Concession owned by Granda Centeno. The mean grade for the samples taken along the Roman and Isabel Veins as reported by UCE was as follows:
392.0 g/t Ag, 3.4 g/t Au, 0.69% Cu, 2.3% Pb and 4.2% Zn
UCE also completed soil geochemistry and a ground magnetometer survey covering approximately 25% of the former Molleturo concession area along the strike extensions of the known veins. The soil samples were analysed for Cu, Pb, Zn, Ni, Cr and Co but not for other key elements such as Au, Ag, As, Sb, Bi, etc. Semi-coincident Cu-Pb-Zn anomalies were noted downslope from the Roman and Isabel Veins and in other untested locations covered by the survey.
Ascendant Exploration S.A. made an application to the Ministry of Mines and Petroleum ("MMP") and acquired the Ariel concession, where the Roman and Isabel Veins are located, on August 18, 2004. The property was subsequently transferred to Ecuador Gold S.A. on February 14, 2006. Ecuador Gold S.A. made additional applications to the MMP and acquired additional concessions during 2006 and in early 2007 enlarging the Molleturo Project area in all directions up to 48,059 hectares (approxiamtely118,706 acres) based principally on regional geochemical anomalies, tectonic setting and direct field geological observations.
Geology
Ecuador is made up of five tectono-stratigraphic sub-divisions or terranes. These terranes are separated from each other by major north-northeast striking fault zones that follow the Andean trend. These terranes are briefly described, from west to east, as follows:
- Piñon Terrain: This terrane is typified by accreted Cretaceous oceanic crust which underlies the Pacific coastal plain region or La Costa.
- Cordillera Occidental (Western Cordillera), Piñon/Macuchi Terrane: This zone is typified by accreted Cretaceous to Eocene oceanic assemblages.
- Valle Interandino (Inter-Andean Graben), Chaucha Terrane: This terrane consists of mainly epicontinental volcanic, volcanoclastic and sedimentary rocks ranging in age from Jurassic to Oligocene deposited upon Upper Paleozoic (Carboniferous-Devonian) metamorphic basement. This zone is also marked by sub-aerial volcanic activity that spans the time period from the Oligocene to the present.
- Cordillera Real (Eastern Cordillera), Alao, Loja & Salado Terranes: The Eastern Cordillera represents a mixture of oceanic and continental crustal suites. In the western sector the Alao and Loja Terranes respectively comprise Jurassic oceanic crust/ophiolitic assemblages and Paleozoic epicontinental basement. In the east the Salado Terrane is made up of Jurassic submarine lavas and sediments.
- Sudamerica Autoctona (El Oriente) Terrane: This terrane consists of PreCambrian gneisses, deformed upper Paleozoic volcanic and sedimentary assemblages and a thick sequence of undeformed flat-lying Mesozoic to Tertiary sediments. The tectono-stratigraphic terranes are overlain in the southwestern part of the country by Eocene to Recent calc-alkaline volcanic units (Saraguro Group) with numerous Tertiary granitoid intrusions. The Tertiary volcanic rocks, in particular widespread Early Miocene ignimbrites (dated at 20-22Ma), host many metallic mineral deposits.
The Molleturo Project is near a major regional fault, the north-northeast trending Pujili Fault, that juxtaposes the Piñon-Macuchi Terrane oceanic crust and the Chaucha Terrane continental crust.
The oldest rocks in the Molleturo region lie to the south of the Molleturo mining concessions, where a fault bounded inlier of upper Paleozoic basement is exposed. These rocks are Devonian semi-pelitic schists and gneissic rocks of the La Victoria Unit (PZV). These rocks correspond to the oldest lithologies outcropping in the Ecuadorian Sierra.
The north-western sector of the Project and region adjacent to the Pujili Fault is underlain by Cretaceous submarine basaltic lavas, tuffs and breccias intercalated with occasional ultramafic (ophiolitic) units of the Piñon Formation (KP). These rocks are the basal units of the Piñon Terrane and the Western Cordillera in Ecuador.
To the west of the Piñon Formation in the extreme northwest corner of the Project is a fault bounded belt of Cretaceous (Cenomanian) volcano-sedimentary deposits composed of lutites, cherts and sandstone rocks of the Cayo Formation (KK). Regionally this formation overlies the Piñon Formation.
To the west of the Cayo Formation there are outcropping Paleocene-Eocene rocks of the Macuchi Unit (PCEM) composed of volcanogenic lithologies of calc-alkaline affinity possibly related to an emerging island arc. These rocks are mainly represented by tuff sandstone, andesite, basalt and volcanic breccias. Younger granodiorite and quartz diorite bodies have intruded the Macuchi volcanic assemblage. Small rhyolitic stocks are mineralized in several places.
The island arc sequences culminate with the deposition of the turbiditic rocks of the Medium to Upper Eocene Apagua Unit (EA) composed of lutites and greywackes. These rocks overlain transitionally the Macuchi Formation described previously.
Most of the mining concession areas of the Molleturo Project are covered by the regionally prospective Oligocene Saraguro Formation (OS) which correspond to andesitic volcanic lavas, rhyolitic flows and pyroclastic rocks of sub-aerial continental origin. In the Miocene-Pliocene the volcanic activity evolves to more acidic giving origin to the Pisayambo Volcanics (MPLP) which cover the eastern sector of the region.
The above stratigraphic units are intruded by Eocene granodiorite, diorite, and related porphyries of the Chaucha Batholith (CZ) and related stocks. The batholith has been dated at 12 Ma (Serravallian) on the basis of K-Ar dating. These porphyritic intrusions gave place to copper-molybdenum deposits such as Chaucha Project (Ascendant Copper Corporation).
Mineralization
Historic work on the Molleturo Property identified two polymetallic veins, termed the Roman and Isabel Veins. Both veins are approximately east-west striking, with the Roman Vein dipping at 45-50o to the northeast and the Isabel Vein about 70o in the same direction. Average true width of the veins is 55 centimetres. The veins have been traced over a minimum strike length of approximately 200 metres and a vertical extent of 40 metres by means of underground drifts (4 levels) and raises (2) following the actual veins. The exposures of vein material are sulphide rich with metallic minerals often predominating over the quartz-chlorite-carbonate gangue minerals. Locally, the veins are semi-massive sulphide with minor quartz. The following ore minerals have been identified in Roman and Isabel Vein material: native silver, electrum, pyrite, sphalerite, galena, pyrrhotite, arsenopyrite, tetrahedrite, chalcocite and covellite.
Potential extensions to the mineralization at the Molleturo Project remain open, especially with the recent discovery of a new vein (the "Paola Vein"), located 3.5 kilometres to the North-West of the Roman and Isabel Veins. The Paola Vein was sampled on two separate occasions, and the rock chip samples were forwarded to the ALS Chemex Lab in Lima Peru, with the following assays results reported by the lab:
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SAMPLE #1 SAMPLE #2
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SILVER (g/t) 1,235 1,120
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GOLD (g/t) 2.78 5.05
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COPPER (%) 1.38 2.36
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LEAD (%) 11.1 11.1
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ZINC (%) 39.7 18.85
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Additionally, several outcrops of granodiorite/diorite, intruded by younger porphyritic rocks, have been mapped in several locations within the Molleturo Project mining concessions. A mineralized stockwork structure, with propylitic alteration, has also been observed near the Paola Vein.
Land Status
The Molleturo Project area consists of three mining concessions (3,594 hectares) granted to the Company by the MMP.
Potential
The main known target on the Molleturo Project is related to the horizontal and vertical extensions of the high-grade polymetallic Isabel & Roman Veins. Historic geochemical/geophysical anomalies in other sectors of the project (Caridad and Rio Miguir) increase the overall geological potential of the project. In addition, the discovery of a new similar polymetallic vein in the North-West sector of the project area is encouraging for the potential of finding additional similar vein targets, as is the observation of mineralized porphyritic intrusive rock outcrops in several locations on the mining concessions.
Planned Exploration
During the year ended March 31, 2008, exploration activities at the Molleturo Project were principally limited to ongoing community relations activities to obtain all necessary local access approvals to initiate planned exploration activities on the Isabel and Roman veins, pursuant to the project's NI 43-101 Report. Plans to initiate a drilling program on the Molleturo Project during the year ended March 31, 2008 were delayed principally because of persistent opposition to AndeanGold's exploration activities by a small group within the Molleturo community. The opposition is principally based close to the Molleturo drill target, the underground workings of the former small-scale mining operation. Accordingly, AndeanGold's Molleturo activities in 2007 were concentrated on community and government relations and community projects, the objective of which was to enable the Company to move forward on its planned exploration program.
All work programs were suspended as of April 18, 2008 pursuant to the provisions of the Mandate and subject to a final resolution of Ecuador's proposed new Mining Law. Subject to a favourable resolution of the new mining regulations and the local access approvals, work will commence on geological mapping, trenching, adit rehabilitation and sampling, and geophysics, leading to the initiation of a planned up to 3,000 metre drilling program concentrated on testing the depth and strike potential of the mineralization found in the previously mined areas of the Isabel and Roman Veins.
Maps & Figures
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