Chesapeake Gold to sell El Escorpion to Gunpoint
2012-06-20 09:22 ET - News Release
Also News Release (C-GUN) Gunpoint Exploration Ltd
Mr. P. Randy Reifel of Chesapeake reports
CHESAPEAKE AGREES TO SELL EL ESCORPION SILVER PROJECT TO GUNPOINT EXPLORATION LTD.
Chesapeake Gold Corp. has entered into an agreement with Gunpoint Exploration Ltd., Chesapeake's 82-per-cent-owned subsidiary, whereby Gunpoint will acquire a 100-per-cent interest in Chesapeake's El Escorpion silver project located in eastern Guatemala. Chesapeake's Guatemalan subsidiary, Hunt Exploration S.A., has an option to acquire Escorpion by making payments to a private owner totalling $351,000 (U.S.) over five years. Escorpion is subject to a 1.0-per-cent net smelter return royalty, which can be purchased for $585,000 (U.S.) at any time.
The Escorpion property is a 900-hectare concession located 85 kilometres by paved road southeast of Guatemala City. Escorpion is situated seven kilometres southwest and along trend of Tahoe Resources Inc.'s world-class Escobal deposit, which has a National Instrument 43-101-compliant indicated mineral resource of 367 million ounces of silver grading 422 grams per tonne, plus 37 million ounces of silver grading 254 grams per tonne in the inferred category. Mineralization at Escobal is associated with steeply dipping and northeast-southwest-trending intermediate sulphidation epithermal silver rich quartz veins with significant values in gold, lead and zinc. The Escobal land package completely surrounds the Escorpion project.
The outcropping mineralization at Escorpion appears to have many similarities to that at Escobal and occurs in a fault-controlled, intermediate sulphidation epithermal system characterized by several multistage, subparallel silver-lead-zinc quartz-carbonate veins and stockworks. To date, the northeast-southwest-trending system has been traced discontinuously for over 1,500 metres along strike and remains open to the northeast and southwest. The system is characterized by carbonate-minor quartz vein swarms in the southwest (Mina Blanca zone) and quartz stockworks and quartz veins in the northeast part of the concession (Escorpion-Los Pozos zones). The exposed vertical extent of the system is greater than 300 metres. The epithermal system is hosted in volcaniclastic sediments, porphyritic andesites and rhyodacitic rocks, the same rock types which host mineralization at Escobal.
The Mina Blanca zone has been traced along strike for 350 metres, up to 50 metres wide and with a topographic relief of 150 metres. This broad zone consists of numerous en echelon, oxidized multistage veins up to seven metres wide. Selected channel samples taken across the veins from shallow workings and hand dug trenches returned:
- Five metres of 78.0 grams per tonne silver, 2.30 per cent lead and 2.63 per cent zinc;
- Four metres of 62.6 grams per tonne silver, 0.71 per cent lead and 0.42 per cent zinc;
- Three metres of 53.7 grams per tonne silver, 6.48 per cent lead and 2.05 per cent zinc;
- Six metres of 73.6 grams per tonne silver, 3.81 per cent lead and 0.70 per cent zinc.
A second subparallel vein swarm is located 200 metres to the south of the Mina Blanca zone. Channel sampling of individual veins has returned up to four metres of 41 grams per tonne silver, 0.18 per cent lead and 0.24 per cent zinc.
The Escorpion and Los Pozos zones are located in erosional windows 400 metres apart in an area of extensive volcanic cover. The Escorpion zone hosts a drusy to massive quartz stockwork that has been mapped over an area 70 metres by 100 metres with channel samples up to 33 grams per tonne silver, 0.2 per cent lead and 0.2 per cent zinc. The Los Pozos zone is situated topographically higher with the vein and surrounding stockwork hosted in argillized rhyodacite rocks. Samples from a quartz stockwork zone, up to 100 metres wide and 200 metres in length, returned anomalous values in silver, lead, zinc, bismuth, arsenic and antimony. Preliminary work suggests the Escorpion and Los Pozos zones represent the possible extension of the Mina Blanca zone along strike and higher up in the epithermal system.
At Escobal, high-grade silver mineralization typically begins between 50 and several hundred metres below surface and underlies leached and oxidized veins which are anomalous in gold, silver and base metals. The high-grade mineralization was not discovered until the property was drilled extensively starting in 2007.
Gunpoint has agreed to acquire a 100-per-cent interest in Escorpion by issuing and granting the following to Chesapeake:
- 500,000 common shares of Gunpoint;
- 500,000 warrants exercisable at $1.50 per share for a term of five years;
- A 1.5-per-cent NSR royalty in the event Chesapeake purchases the existing 1.0-per-cent NSR;
- One million common shares of Gunpoint in the event a National Instrument 43-101 measured and indicated resource estimate of one million gold-equivalent ounces is achieved on the Escorpion property.
The transaction is subject to the approval of the TSX Venture Exchange.
Gunpoint plans to follow up Chesapeake's prospecting of the vein and altered outcrops at Escorpion. Detailed mapping, trenching and rock channel sampling along the fault-controlled, altered corridor will delineate priority drill targets. Gunpoint is planning to drill test both the Mina Blanca and Escorpion-Los Pozos zones within six to eight months.
Alberto Galicia, PGeo, Chesapeake's project manager and a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release. Dr. E. Max Baker, PhD, member AusIMM, president of Gunpoint, has also reviewed this news release.
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