CHUBUT, ARGENTINA
Currently defined 116,700 oz Au Resource with potential precious metal credits
 

PROJECT LOCATION

The Huemules Project is located to the west of the town of Rio Percy in the Cordon Rivadavia and lies within the 6km wide, NW striking Willimanco structural corridor which extends to the north west from the 3.5Moz Esquel Gold Project.

The Huemules Project is located to the west of Esquel, 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 at Huemules once the Provincial law expires.

 
Huemules Project location Map (click to enlarge)
 

PROPERTY OWNERSHIP

The main property block is optioned by Huemules SA from EACA (Huemules del Chubut SAM). Huemules SA which is a wholly owned subsidiary of Minamalu SA a wholly owned subsidiary of Patagonia Gold Plc.  Huemules SA owns four mineral properties and is earning the right to purchase a further 12 properties which would give a total property holding of  22.5 km².
  
Huemules location Map (click to enlarge)
 

GEOLOGY 

The  mineralization at Huemules occurs within multiple lenticular quartz veins associated with base metal sulphides.  The veins are controlled by a major northwest trending, steeply west-dipping structural zone and hosted by pyritized and silicified intermediate volcanics of probable Jurassic age.  Gold mineralization has been traced within the Huemules system along a strike length of over 3 km and over a vertical range of more than 300 meters.  Grades are characteristically bonanza with shoots of extraordinarily rich ore called “clavos“  grading +100g/t Au  within lower grade intervals grading from 1-10 g/t Au.

  
Huemules Mineralised Corridor and Drill Hole Location Map (click to enlarge)
 

PREVIOUS EXPLORATION

Exploration work initiated by the United Nations in the ‘70’s included 2,049m or drilling and underground development. In the ‘80’s EACA conducted further drilling and underground development which resulted in production from the Huemules Sur and Norte shoots.

An estimated 7,717 ounces of gold at a grade of ~120g/t Au was processed in Belgium.  Sunshine Mining undertook further drilling in the 90’s before the Project was optioned by the Brancote Holdings Plc – Minera el Desquite JV, who drilled 2,280m around Huemules Norte.  Further drilling by the Leleque Exploration JV (Meridian) was undertaken in the Huemules Sur and Norte prior to the embargo on exploration imposed  by the Province of Chubut

  
High grade gold and sphalerite core within Huemules norte shoot
 

RESOURCE and DEVELOPMENT

When Patagonia Gold Plc in 2005 acquired 100% of Huemules SA they contacted Chlumsky, Armbrust and Meyer LLC (CAM) an international mineral resources consulting and engineering group from Lakewood Colorado, USA to complete a Resource estimate to NI 43-101 standards on the high grade shoot at Huemules Norte.  The resource was calculated on a 3.0g/t Au cut off and a minimum vein width of 1.5m.
 The study reported an Inferred resource of 364,657 tonnes @ 9.96g/t Au for a total of 116,773 ounces of gold and confirmed the economic potential of the mineralisation.