Argentina / Deseado Massif

Escondido / Michelle

Our most advanced project in Argentina, Don Nicolas, is located Argetina’ Santa Cruz Province on a volancic plateau known as the Deseado Massif. The Deseado Massif covers a surface of about 60,000 square-kilometres, consists of Middle to Upper Jurassic age volcanic rocks that is host to several fracture controlled low sulfidation epithermal gold and silver deposits, such as Don Nicolas.

Notable examples of precious metals mines on the Deseado Massif include Anglogold Ashnti’s multi-million ounce Cerro Vanguardia Mine, Hothschild-McEwen Mining jointly owned Huevos Verdes Mine, Coeur D’Alene’s Martha Mine, and Pan American Silver’s Manantial Espejo Mine. Two of the largest are development projects are Goldcorp’s multi-million ounce Cerro Negro Project and Yamana’s Cerro Moro Project, which was Extorre’s flagship project when it was acquired in the second half of 2012.

There are several other development stage projects on the Deseado Massif and an even larger number of earlier stage exploration projects, many of which are identified in the figure below. One of the most exciting facts about these deposits is that most of them were only discovered within the past 20 years (many within the past 10 years) and their resource bases continue to grow.

The deseado Massif

The Deseado Massif is widely considered to be underexplored and is developing into one of South America’s most prominent precious metals mining camps. This growth has been attributed to a rich mineral endowment and easy access to important infrastructure, such as paved highways, grid power, airports, and ports. Additionally, Santa Cruz Province has a long history of mining and has strong legislation that is favourable for mining, which is probably why Santa Cruz is widely considered to be Argentina’s most favourable jurisdiction for mining.

Minera IRL has a large prospective exploration land package the covers an area of about 260 square-kilometres on the eastern plains of the Deseado Massif in Santa Cruz Province. We acquired the land package in late 2009 with our acquisition of Hidefield Gold plc (“Hidefield”), an AIM listed company.

Since our 2009 acquisition of this extensive land package, we have carried out extensive airborne and ground geophysical surveys. Airborne magnetics, in particular, is a powerful vectoring tool in the exploration for low-sulphidation epithermal gold and silver deposits around the world. Because structural setting in low-sulphidation epithermal deposits is important, understanding the broader structural geology of the known vein systems is fundamental for building an effective structural model that helps explain factors which influence localization of mineralization.

Much of this data has been analysed and has been used to guide our exploration activities, which has confirmed the presence of many exciting exploration targets. Excluding Don Nicolas, two of the most advanced exploration projects in our Deseado Massif portfolio are Escondido and Michelle.

Escondido

Our Escondido Project in Pantagonia is contiguous to the Las Calandrias deposit first announced by Mariana Resources Limited (“Mariana”) in late 2009. Mariana has outlined an indicated resource of 492,000 gold-equivalent ounces plus 27,000 ounces in the inferred category. Our Escondido Project is an extension of the Las Calandrias mineralization.

In 2010, we undertook a geological mapping and surface sampling program that identified a breccia zone in excess of 100 metres wide with anomalous gold and silver values over a strike length of about 700 metres. This was followed up by geophysical studies that identified structural and conductivity anomalies in several areas, which are promising indicators for mineral exploration.

We conducted a first phase of scout drilling in the second half of 2010. Of the 11 holes drilled, 10 intersected gold mineralization over strong grades and wide widths, demonstrating that a significant portion of the deposit lies within the boundaries of our property. Selected drilling highlights from this program are presented below:

  • • E-D10-02: 25.38 metres averaging 1.45 g/t Au and 9.62 g/t Ag, including 13.75 metres grading 2.39 g/t Au and 14.56 g/t Ag
  • • E-D10-03: 100.0 metres averaging 1.19 g/t gold and 7.77 g/t silver, including 48.00 metres grading 1.71 g/t gold and 9.18 g/t silver
  • • E-D10-07: 120.40 metres averaging 0.65 g/t gold and 5.70 g/t silver, including 14.70 metres grading 1.30 g/t gold and 11.86 g/t silver and 8.40 metres grading 2.45 g/t gold and 8.31 g/t silver

A second pass scout drilling program demonstrated that the mineralized zone had a drill-indicated strike of almost 700 metres from property border with Mariana’s Las Calandrias deposit. This mineralized zone remains open ended along strike.

Escondido continues to be an exciting exploration project, but our exploration efforts are currently focussed on developing drilling targets that are in closer proximity to our Don Nicolas project, which is nearly 100 kilometres to the southwest of Escondido.

Michelle

Our Michelle Project is located in mining friendly Santa Cruz Province, Argentina. Geologically, Michelle is situated in the Deseado Massif, a plateau consisting of Middle to Upper Jurassic age volcanic rocks that are host to several fracture controlled, low sulphidation epithermal gold-silver deposits.

The Michelle Project is adjacent to AngloGold Ashanti Limited's multimillion-ounce Cerro Vanguardia Mine in Santa Cruz Province, Argentina. Many of the veins on our land package can be traced at surface to the Cerro Vanguardia Mine. The veins are gold and silver bearing with classic low sulphidation epithermal textures that suggest significant depth potential.

In late 2011, we carried out a 4,698-metre, 27-hole diamond drilling program was carried out in late 2011 followed by a 3,180-metre, 23-hole diamond drilling program testing targets on seven vein structures. Exploration results are encouraging and we have only drill tested a small portion of the 22 kilometres of cumulative vein strike length that we have identified on our 143 square-kilometre Michelle Project.

Michelle continues to be one of the most exciting exploration projects in our portfolio, but our exploration efforts are currently focussed on developing drilling targets that are in closer proximity to our Don Nicolas project.