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 GEOLOGY
Chubut Province in southern Patagonia, Argentina, comprises an extensive area of relatively flat-lying terrain (Argentina) bounded in the west by the rugged Andean Cordillera (Argentina and Chile).
The Cordillera comprises strongly folded, faulted and elevated Upper Palaeozoic sedimentary rocks overlain by Jurassic andesite-rhyolite volcanics and Cretaceous sediments and Tertiary volcanics and sediments. Upper Cretaceous granite batholiths are widespread, especially in the north. Pleistocene glacial sediments fill the valleys in the east. |
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To the east of the Cordillera, the relatively low-lying Somuncura massif comprises basement Precambrian-lower Palaeozoic metamorphic-intrusive rocks overlain by a relatively flat-lying stratigraphic sequence of Jurassic andesite and rhyolite volcanic and sedimentary rocks and Cretaceous-Tertiary sediments and volcanics. Much of the massif is covered by extensive Creataceous and Tertiary-Quaternary sedimentary and volcanic lithologies, including flood basalts.
Jurassic volcanic lithologies in Chubut occupy about 30,000 km2 and host advanced projects at Esquel (also known as Desquite - 3.8M/oz gold at 8.0 g/t and 6.4 M/oz silver) and "Navidad" (indicated resource 300.7 million ounces silver and 1.3 million tones lead (92.8 Mt of 101 g/t silver and 1.36% Pb at 50 g/t Ag equivalent cut-off) as well as numerous smaller prospects and showings. These are low or intermediate sulphidation epithermal vein style gold-silver deposits, the main targets for exploration in this region. Uranium mineralization is also known in sandstones (e.g. Cerro Solo, Los Adobes).
PROPERTY HOLDING
PGSA holds a number of mining properties, totalling approximately 170,000 hectares.
EXPLORATION
Two Project areas were designated in Chubut and drilling had focused on the main Project area of Crespo, near Gobernador Costa, with previous drilling including the Cabana, Jasper West and North veins, as well as the Paleosurface. Drill results identified gold bearing veins but not in sufficient grade of volume to warrant feasibility studies. However, the West veins do contain an interesting polymetalic gold vein system which warrant further work.
The Gastre Project area has been explored by reconnaissance sampling and in 2006 several prospective targets drilled. Currently work is being undertaken to assess the merit of further work and drilling or potential Farm-out.
Minamalu: Limited exploration of these areas has been put on hold due to the sanctioning of a law banning exploration and mining (non alluvial) in the Cordilleran zone for the next 36 months from July of 2006.
The Crespo and Huemules projects, as well as several other mining properties owned by the Company, are located within the zone which currently prevents exploration. This restriction was established on June 2006 and for a period of three years. PGD supports the Provincial environmental directives and is in favour of working towards resolving any concerns in regard to the exploration of our mining properties once the Provincial law expires.
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GASTRE
The Gastre project is located in northern Chubut Province and comprises 14 claims covering 89,331 hectares. The area was targeted because it is traversed by a favourable structure, the “Gastre trend”, and contains prospective Jurassic volcanic rocks. This trend is a northwest-southeast oriented, deep-seated shear or fault zone and appears to control the location of at least two significant mineral deposits.
A comprehensive stream sediment and BLEG exploration programme was completed within the Gastre claims and led to identification of precious and base metals values in veins and sheeted vein zones in the southern most claim blocks located immediately northwest of the Navidad silver Project. |
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Geologically the area is composed of andesitic metavolcanic schists and biotite granites intruded by dacite dykes. Mineralization mostly comprises low sulphidation, epithermal, polymetallic quartz-carbonate fracture veins up to 1 metre wide with variable, sometimes high gold up to 10.35g/t; silver up to 170g/t and anomalous lead zinc and other metals values. High copper values (up to 3.2% at Copper Hill correspond with a zone of surface enrichment of copper oxides.
Further exploration is being undertaken at a silver and base metals rich zone in the south west of the Gastre block near Navidad. |
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MINAMALU
On February 2005 Patagonia Gold Plc acquired Minamalu SA ("Minamalu"), an Argentine exploration company which held 40 per cent. interests in each of the following mining companies. In October 2005 Patagonia Gold successfully negotiated the purchase of the remaining 60% which was held by a wholly owned subsidiary of Meridian Gold Inc ("Meridian").
Huemules SA ("Huemules"), which holds 14 mineral properties for a total area of 17,322 hectares, is located in the Cordon Huemules approximately 25 kilometres to the west of the Esquel gold project and contains the historical Huemules gold mine. Exploration in the late 1990's delineated an inferred gold resource of 114,300ozs in the immediate vicinity of the mine together with identifying other prospective areas;
Leleque Exploration SA ("Leleque"), which holds 20 properties for a total area of 83,778 hectares, located to the north and adjacent to the Esquel gold project and though lightly explored, is considered to be highly prospective with several large colour alteration areas together with numerous gold anomalies that have been identified by previous exploration;
Minera Nahuel Pan SA ("Nahuel Pan"), which holds 11 mineral properties for a total area of 14,030 hectares, is also considered to be highly prospective for gold with a large colour alteration area, along strike and to the south of the epithermal corridor in the Cordon de Esquel, separated only by the Willimanco fault valley.
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