June 2012 Quarter Activity Report and Exploration Update

Transcription

1 Unit 9, 44 Belmont Ave, Belmont WA 6104 PO Box 745, Belmont, WA 6984 Perth, Western Australia Tel: +61 (8) Fax: +61 (8) ASX:AVK 31 July 2012 ASX ANNOUNCEMENT June 2012 Quarter Activity Report and Exploration Update June Quarter activity consolidates Cerro Blanco Porphyry Cu-Au-Mo targets Strategic ground position increased in San Juan Province Project generation activities gain momentum HIGHLIGHTS Copper Hill (Cerro Blanco Project) All diamond core re-logged for additional parameters Porphyry Cu-Au exploration model further refined Sites selected and pads prepared for planned drilling program Principal targets identified north and east of previously drilled zones Drilling objective is to define and initial Mineral Resource Despoblados and La Fortuna Exploration (Cerro Blanco Project) Regional stream geochemical sampling program commenced 50% completed during June 2012 Quarter Divisoria Project Option to Purchase signed Strategic ground position in Argentina s fastest growing minerals development corridor 5 year Option to Purchase Covers southerly extensions of Cerro Blanco mineralised structures Project Generation tempo increased Alianza Minerals Pty Ltd project generation alliance with Independence Group NL commenced Approaches received from Argentinean investment entities ACN

2 Overview (ASX: AVK) (Argentina Mining or the Company) is pleased to report significant exploration progress at the Cerro Blanco Project - Copper Hill Prospect during the June 2012 Quarter. Owing to the early onset of the Andean winter, active field work on the Company s other Andean gold and base metal projects in San Juan Province, Argentina, was deferred until spring At Cerro Blanco, the Company maintains an all-weather camp near the Copper Hill porphyry coppergold prospect site. In the nearby town of Barreal, the Company maintains accommodation and core storage and cutting facilities, allowing geological work to continue on the core and other samples even when the weather on the prospect sites between 3,000 to 4,000m above sea level precludes field work. An important step was taken by the Company with the signing of the Divisoria Option to acquire additional ground at Cerro Blanco. This ground is geologically important as it is contiguous with the Cerro Blanco Project tenements and covers southerly extensions of geological structures which host the porphyry copper mineralisation at the Copper Hill Prospect, and prospective lithologies at Despoblados and La Fortuna, on which regional stream sediment geochemical sampling was commenced during the June 2012 Quarter. The Divisoria Option is also strategically important in that it significantly adds to Argentina Mining s tenure in Argentina s fastest growing mining corridor, where the major Los Pelamabres porphyry copper mine (Antofagasta plc) (in Chile, adjacent to the Argentina border) has been operating since 2000 and the El Pachon (Xstrata), Los Azules (McEwan Mining Limited), Altar (Stillwater Mining Company) and San Jorge (Coro Mining Corp) porphyry copper projects are moving into the preproduction phase of development. The Company also increased its project generation activities during the June 2012 Quarter, formalising the new Alianza Minerals Pty Ltd project generation partnership with its largest shareholder, Independence Group NL (ASX:IGO). Negotiations were also undertaken for the proposed acquisition of new projects in San Juan Province, Argentina and in Chile. Despite the Andean winter generally slowing field work in the province, competitor activity continued, with reports of exploration success from neighbouring projects. For example, at Casposo, roughly located mid-way between Argentina Mining s Cerro Blanco and San Francisco projects, Australian company Troy Resources NL are steadily increasing gold and silver production from the Casposo mine and has three drilling rigs exploring a growing number of targets in the Casposo- Castaño Nuevo region, immediately south of this company s San Francisco Project. Despite Argentina s sometimes controversial moves to enhance the country s energy security position, encourage greater local production of mining consumables and to stabilize the country s foreign reserves position, foreign investment interest in the AVK s copper and gold projects does not appear to have been diminished, with the Company receiving a number of unsolicited enquiries concerning investment. Exploration activities during the reporting period are summarized below:

3 CERRO BLANCO PROJECT Copper Hill Prospect Introduction Exploration activity in the first half of 2012 at Cerro Blanco consisted primarily of preparation for the planned resumption of drilling at Copper Hill, at the end of the Andean winter. This third phase of diamond drilling is planned to total at least 2,300m of coring. No drilling was undertaken during the reporting period. All available data from the Copper Hill Prospect was reviewed and, where necessary, additional clarification or extension data was acquired to create the best possible mineralization model for Copper Hill. All diamond drill core from the previous five holes was re-logged with emphasis on alteration signatures and relationships, and comprehensive plots of all relevant parameters made for each drill core profile. This has enabled further refinement of the porphyry copper exploration model at Copper Hill and indicates that the principal copper mineralization is centred to the north and east of the area drilled to date. This area has been marked out, drill sites selected and drill access and pads prepared for the planned resumption of drilling, the objective of which is to define an initial Mineral Resource, and also to further define the litho-structural controls and the limits of the various zones of metal enrichment that have been recognized in both drilling and surface exploration. The planned drilling program will include a number of both shallow and medium-depth holes to evaluate these various zones from near surface (<200m depth) to a nominal maximum of 500m down-hole, rather than deep (>500m) holes only. Third Party Interest A detailed review and re-logging of the Company s Copper Hill diamond drill-holes (MC-1 to MC-5) and site inspection was undertaken by an international mining company interested in a potential joint venture on the property. A large Argentinean industrial company also conducted due diligence studies of the Copper Hill Prospect area. Responses to these expressions of interest are expected in the near future. Geochemistry Despoblados Regional Geochemical Stream Sediment Sampling Summary In May 2012, a regional stream sediment sampling program was commenced in the Despoblados-La Fortuna Prospect area which lies in the southern part of the 12,000Ha Cerro Blanco Project. Almost all of this area lies in the altitude range of 3,000 4,000m above sea level.

4 The program was designed to fulfil the following objectives: to trial Argentina Mining s stream sediment geochemistry techniques in efficiently identifying new targets with relatively few reconnaissance samples in a large area. The area of influence of the full 28 sample array covers approximately half of the entire 12,100Ha Cerro Blanco tenement area, equivalent to a nominal sample density one sample per 200Ha (Figure2). to determine typical geochemical responses for the trial area, taking advantage of the fact that there has been almost no human disturbance of the area that might affect these responses, other than historic grazing and the Company s construction of a single access track in late to test screen mesh sizes and sample weights. to train local field personnel in the sampling methods so that they can undertake future programs at Cerro Blanco and other Company properties. to undertake this initial program based out of the Cerro Blanco field camp so that effective support and supervision could be given, methods tested and problems and requirements identified, before other programs were commenced at more remote properties. This geochemical program is being supervised by Argentina Mining s director, Mr Doug Bright, who is a specialist in the application of geochemistry to base metal and gold exploration. Mr Bright recently spent nearly four months in Argentina advancing this work and contributing to the Company s other programs. In the first three days of field work, a total of 14 x 2kg BLEG (-6mm) and 14 x 250gm multi-element minus 80 mesh (0.177mm) samples were collected, completing the easier central section of the project, most of which is readily accessible from the new 16 kilometre long Despoblados access road bulldozed into the area late in 2011 (Plates 1 & 2). The majority of the remaining and more remote sample sites lie southeast and southwest of the southern terminus of Argentina Mining s access road. Before this final part of the program could be commenced, a snowstorm developed which lasted for several days. Upon recommencing sampling a week later, the access road was found to be unusable due to extensive cover of more than 1m of snow in places and which was thought likely to remain in place throughout winter (Plate 3). The samples already taken are awaiting analysis. A suitable laboratory capable of carrying out the desired analytical procedures has been identified, with specifications and quoting being undertaken at time of writing. The remainder of the samples will be taken in the coming spring, when the program will be extended to include new sites in the new adjoining Divisoria project area, the acquisition of which was announced to ASX on 4 July 2012.

5 Program Location Principal sample coverage of the program is in tenements Mina Serafina_ II_2_1413-T-95 and Mina Leon_V_546_704-B-93 which encompass Despoblados and La Fortuna, while some sites fall in the south-western part of the central tenement Mina Leon_III - 546_702-B-94, due to the configuration of drainage from the target area (Figure 1). Figure 1 Google Earth image Tenement & Prospect Location Plan, with Despoblados access track in red and provincial San Juan-Mendoza Border in blue

6 Figure 2 Catchment Area of Influence of Full Sample Array (orange sites already sampled, red sites yet to be sampled). Plate 1 View south-southwest over the current geochemical program area towards Despoblados & La Fortuna, from a point ~2km south of Copper Hill at the start of the recently-constructed access track.

7 Plate 2 Wet sample screening at Site 4

8 Plate 3 1.5m deep snow drift on Despoblados access track Divisoria Option Argentina Mining announced on 4 July 2012 that the Company s wholly owned Argentine subsidiary, Entropy Resources SA (ERSA), had signed a five (5) year Option to Purchase the Divisoria tenement area from an Argentine national and geologist, relating to the 20,641Ha Divisoria Project, a suite of 15 tenements. These tenements are mostly contiguous with the southern, eastern and western boundaries of Argentina Mining s 12,955Ha Cerro Blanco Project The Agreement gives ERSA the exclusive Right to Explore, with an Option to Purchase a 100% interest in the tenements for a period of five (5) years, until 30 June Argentina Mining s regional geological interpretation indicates that its Despoblados and La Fortuna Prospects may lie within a major volcanic centre. Both prospects are associated with large zones of hydrothermal alteration which extend south into the Divisoria area and at least as far south as the provincial border, as appears to be confirmed by alteration anomalism.

9 Figure 3 Google Earth image Cerro Blanco Project tenements (yellow) and the Divisoria Option tenements (red), with provincial border and nearest third party project. Strategy and Proposed Exploration Argentina Mining s Copper Hill porphyry Cu-Au-Mo Prospect is emerging as a regionally significant mineral deposit. It is situated within a 200km long, north-west trending regional structural corridor which hosts the major operating Los Pelambres Porphyry Cu-Au-Mo mine (Antofagasta plc) and proposed mining operations at El Pachon (Xstrata), Los Azules (McEwan Mining Limited), Altar (Stillwater Mining Company), San Jorge (Coro Mining Corp) and several other significant mineral deposits and prospects, including AVK s Despoblados, La Fortuna and El Tigre Prospects, 10km south of Copper Hill. The Divisoria Option is a part of the Company s strategy of building regionally-strategic ground positions within prospective regional structural corridors. The Company plans to extend its current Despoblados and La Fortuna regional stream sediment and rock-chip sampling and reconnaissance-scale geological mapping program southwards into the Divisoria ground.

10 Figure 4 Regional Project Location & Major Structural Context of Cerro Blanco & Divisoria TRES AMIGOS PROJECT A brief site visit was undertaken at Tres Amigos. SAN FRANCISCO PROJECT Due to the onset of winter conditions, no work was undertaken during the June Quarter on the San Francisco Project where previous exploration by Argentina Mining (Quarterly Report March 2012) identified, among other targets, a 3.7km long NNW-trending epithermal quartz-goethite reef system for which a comprehensive exploration program is planned. REGIONAL EXPLORATION PROJECT Due to the onset of winter conditions, no work was undertaken at the northern Regional Projects where the three project tenements, East Sancarron, La Oritiga and San Crispin are located at relatively high altitudes within 50km of Barrick Gold Corporation s Veladero and Pascua Lama operating gold mines. Previous exploration by Argentina Mining identified a number of mineralised and altered targets for continuing exploration. PLANNED EXPLORATION Exploration planned, or already underway, for the remainder of 2012 includes: Extension of geochemical sampling at Copper Hill Resumption of drilling to test the northern and eastern flanks of Copper Hill for leached cap, supergene gold and copper zones and deeper primary porphyry copper-gold-molybdenum mineralisation

11 Resumption of regional stream and rock chip geochemistry over the La Fortuna and Despoblados prospects in the southern Cerro Blanco Project area and extension of the program into the Divisoria ground Structural mapping, verification geochemistry and proposed scout drilling at Tres Amigos A second phase of reconnaissance mapping and geochemistry, including commencement of regional stream geochemistry at San Francisco Sampling and mapping of the 3.7km long epithermal reef system identified in the Las Leñas valley Follow-up reconnaissance exploration and access development at the East Sancarron, La Ortiga and San Crispin Regional Exploration project areas Project Generation Argentinean Investment A feature of Argentina Mining s corporate development since listing on ASX on 9 March 2011 is a notable increase in interest in the Company s operations, and its future, by Argentinean companies and investment funds. The Company has opened discussions with several parties as part of its ongoing project generation and funding strategies. The Company is working on several opportunities and is looking forward to positive announcements to shareholders in the foreseeable future. It is also apparent from the Company s Share Registry that Argentinean investors have been trading the Company securities on-market. This is considered a notable development because Argentinean investors have only limited opportunity to invest on-market within Argentina. Alianza Minerals Pty Ltd During the June 2012 Quarter, arrangements for the formation of the project generation alliance company Alianza Minerals Pty Ltd (Alianza) were completed between Argentina Mining and its major shareholder, Independence Group NL (ASX:IGO. Alianza is now searching for a suitably qualified Argentina-based geologist to lead a systematic project generation program which will be jointly overseen by both Independence and Argentina Mining staff. Under the terms of the Agreement, this activity does not preclude either party from pursuing exploration and mining opportunities which are introduced independently of the Alliance activities. The first phase of the Alianza activity is project generation work in San Juan Province, Argentina END Company Contacts: Eduardo Videla Managing Director +54 (264) Steve Shedden Chairman +61 (8) info@argentinamining.com.au

12 About listed on ASX on 9 March The Company is exploring a suite of gold and base metal projects in San Juan Province, Argentina. These projects range from the established porphyry coppergold-molybdenum project at Cerro Blanco, epithermal vein gold and copper mineralisation at Amiches, San Francisco and Tres Amigos and regional exploration projects near Barrick Gold Corporation s major Veladero (Reserves 12Moz Au) and Pascua-Lama (Reserves 17.8Moz) gold operations. The Company s Phase 1 and 2 exploration drilling programs in 2011 at the Copper Hill Prospect at Cerro Blanco intersected broad zones of porphyry copper-gold-molybdenum mineralisation in five diamond drill holes, confirming the presence of a large mineralised porphyry sulphide and oxide system. The Company is planning follow-up drilling at Copper Hill Porphyry Cu-Au-Mo Prospect, as described in this report. Competent Person Statement The information in this report relating to Exploration Results is based on information compiled by Mr Doug Bright, a Member of the Australasian Institute of Mining and Metallurgy and a Director of and geological consultant to. Mr Bright has sufficient experience relevant to the style of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bright consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.