Rio Seco Project
Exploration Activity
In early October 2009, the Company completed a Phase 1 Drilling Program (the "Program) on the Rio Seco Project's stockwork target. The Program entailed the drilling of eleven (11) reverse circulation holes, for a total of 1,398 metres. All holes were successfully drilled as planned. The holes ranged from 100 m to 156 m in inclined length and from 84 m to 141 m vertically from surface. The Program was designed to test the depth, strike extent and grade of the 580x100 m stockwork target to an average depth of approximately 100m, as a follow up to the encouraging assay results from the 2008 and 2009 trenching programs (see news releases of April 20, 2009 and May 12, 2009) which identified the stockwork target area as a potential open pit, bulk mineable, heap leach mineral resource, if economic grades were present.
The Phase 1 drill collars were located along the western side of the access road, where the majority of the trenching of the exposed mineralized lenses had taken place. In general, the holes were drilled along the N-S strike of the exposed mineralized lenses, to the west in order to test for the inferred parallel mineralized lenses under the hill or a combination thereof.
While the majority of the drill holes intersected the veins as projected from the surface mapping and the average AUE grades of the veins in the drill holes were similar to the trench assays (+/- 1.0 g/t AUE), the assay results for the areas surrounding the veins were below the trench assay results. The assays for these holes were all of low grade. Based on the drilling results, it appears that the mineralized lenses are primarily confined to the 580 x 25m area along the access road that was previously mapped and trenched. The Phase 1 drilling results do not support a potential bulk mineable target to the west.
The Company is analyzing whether to conduct a limited drill program to test the full eastern extent of the 580 x 25m mineralized area and also intends to further review the underground mining potential of the Project's vein targets and whether they might support a series of small-scale mines with a centralized processing plant.