Discoveries of Low-Sulfidation Epithermal Au-Ag Veins at Cerro Negro, Deseado Massif, Argentina

ABSTRACT Exploration by Andean Resources Ltd. in the Cerro Negro district of southern Argentina between March 2005 and July 2010 delineated resources of 2.54 Moz gold and 23.5 Moz silver in three low-sulfidation epithermal vein deposits. Two of these, Eureka West and Bajo Negro, are new discoveries; the third deposit, Vein Zone, had been explored previously. Additional measured and indicated resources of 2.7 Moz Au have been estimated by current owners Goldcorp Inc. for three other discoveries at Cerro Negro: San Marcos, Mariana Norte, and Mariana Central. The total gold resource for the project is 5.3 Moz Au measured and indicated, plus 1.24 Moz inferred. Andean completed a positive feasibility study into an underground and open pit mining operation in July 2010, based on reserves of 2.07 Moz Au and 20.6 Moz Ag at Eureka, Bajo Negro, and Vein Zone. The study concluded that these deposits can produce an average of 200,000 oz of gold and 1.8 Moz of silver per year for 10 years, which would make Cerro Negro the largest gold producer in the Deseado Massif without considering resources or production from the other three deposits. The deposits are hosted by Late Jurassic volcanic and probable intrusive rocks of the Deseado Massif in which Triassic-Cretaceous extension created the structures which control the precious metal vein deposits. Four of the five new discoveries were found through geologic mapping, but pioneering work by previous explorers also contributed; the two most recent discoveries do not crop out. Geophysical studies helped to define drill targets and are likely to be increasingly important in future exploration. A key ingredient in Andean’s success was a willingness to drill test targets identified by a skilled and dedicated, largely Argentine, exploration team, supported by Australian and North American-based management.