CMG saved Hard Drive REPORT:
The Key West Property
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Economic Assessment
By:
Raul J. Madrid with additions from James A. McGlasson
January 15, 2001
Platinum Group Metals (PGM's): Focus of the Company.
Most of Conquistador Mines Ltd's work has focused on PGM's in properties that it holds in the United States and in Colombia. Our research on PGM-bearing systems has focused on all ages of rocks ranging from Tertiary (> 2 million years) to Archean (> 2.5 billion years). We have been concentrating on intrusives (layered igneous complexes and dikes) in cratonic settings. Some of these settings have been severely dismembered as in Colombia. There we control large areas with both placer as well as lode potential. The company's largest property position is in Colombia where it controls large licenses within which occur PGM bearing rocks as young as Tertiary and as old as Precambrian (Archean: > 2,5 billion years). These are all grass roots projects, but with grades up to 56 g/T Pt+Pd.
However, the Company's most advanced major property package is in the United States and located in southeastern Nevada. There, ultramafic, marginal cratonic intrusive rocks ranging from 1.8-3.0 billion years have been the host of primary platinum and palladium. These metals have been produced from at least two lode mines within our large 213 claim block and our due diligence indicates a potential for more tonnage in shallow as well as deep targets (McGlasson, 1998; staff work, 1999). This more advanced Key West Project is the subject of this summary.
Key West Project
Regional Information
It has been known to Conquistador Mines Ltd. Personnel, that the Key West region hosts several zones of mineralization that are found within an elongated corridor containing hundreds of pyroxenitic and gabbroic dikes and sills that trend for at least 35 miles in a roughly N60E direction. These continuous and discontinuous masses occur within a province of crystalline, cratonic, Precambrian rocks that are roughly 1.8-3.0 billion years old. These dikes and sills are shown to be coincident with a series of elongate magnetic highs over a minimum distance of 25 miles and a series of Pt-Pd and Ni-Cu prospects over a minimum distance of 20 miles (USGS unpublished information). The corridor within which the dikes and sills occur is approximately 60 miles long extending from about 12 miles southwest of the Key West mine area to about 50 miles to the northeast. Only a small portion of strike length has been investigated. At the Key West Properties, we have under control a segment of these 60 miles but the 213 claims overlay the core areas of mineralization, which cover a minimum strike length of over 6.5 miles. Seven of the claims are patented claims and the rest are unpatented. Within this strike length is the major percentage of the PGM bearing ultramafic rocks mapped by Beal (1965). However, in the future, as exploration justifies, these claim blocks must be expanded to cover other areas known to carry exploratory significant values of PGE's in ultramafic dikes and fracture zones within the 1.8-3.0 billion year-old cratonic terrane. This terrane is one of the most significant in the U.S. outside of the older Archean terrane (> 3.0 billion years) that hosts the Stillwater Complex in Montana. This younger terrane however, is similar in age to the following known worldwide occurrences of PGM bearing rocks and similar in structural setting and rock compositions to others listed.
Key West Mine; note blue-green Cu and Ni-oxid mineralization
Data from Buchanan, D.L., 1988, Platinum Group Exploration
Location:
Geological Characteristics
Best Grades
g/Tonne
Age:
[in millions (Ma); in billions (Ga)_of years]
Jimberlana Dyke (Australia)
Medium sized Layered intrusion
unproven
Proterozoic (> than 600 Ma and < than 2.5 Ga
Penikat, (Finland)
Layered mafic intrusion.
4.2 Pt
2.8 Pd
over 7 m intercept
Pd/Pt = 0.67
2.44 Ga
Great Dyke (Zimbabwe)
Dyke like layered intrusion
2.4 Pt, 2.4 Pd
Resource, some attempt at mining
Pd/Pt = 1.0
2.46 Ga
Bushveld Complex (South Africa)
Large Layered intrusion
8.1 g/T (Pt + Pd)
Largest producer
Pd/Pt = 0.81
2.10 Ga
Norilsk-Talnahk
(Siberia, Russia)
Predominantly sills and minor pyroxenitic dikes with abundant stringer and massive sulfides.
3.9 - 23 g/Tonne Pt
15 - 140g/Tonne Pd
up to 44 meters thick.
Largest palladium producer
Pd/Pt = 3.8-6.1
230-=270 Ma
Basement Rocks are
2.2 to 1.6 Ga
Data From Conquistador.
Key West
(Nevada, USA)
Pyroxenitic: layered from peridotite to pyroxenite; massive sulfides and stringer mineralization:
Also remobilized Pt-Pd
4.5-6.8 g/T (Pt+Pd) Resource (1989)
Highest grade: 6 ft at 1.32 ounces per ton. Pt+Pd
Pd/Pt = 2.3 - 3.7
1.8 to 3.0 Ga
Probably closer to 1.8 to 2.2 Ga intruding older gneisses in relaxation phase.
Note: Ga=billion years; Ma=million years; Tonne=metric tonnage.
Tonnage and ore-grade material
It is clear that the grades of the Key West mine area are demonstrably good and that the palladium to platinum ratio is fairly high, but certainly not as high as Norils'k. The tonnage potential is the main factor in the advancement of the property to a more certain economic viability (discussed below). An example of the grades in the mine area in terms of trenching, due diligence channel sampling, and grab sampling are shown in the next table. This table shows some of the ranges in grades of grab samples, the high of which contains 1.32 ounces of platinum in 6 ft of core (see above). The complex sulfide-stable ore contains pentlandite, sperrylite and other complex PGM alloys. In addition, chalcopyrite, and pyrrhotite are present in the massive as well as the stringer mineralization. The main metals include platinum, palladium, osmium, rhodium, copper, nickel, cobalt, gold and silver. PGM's occur in many other dikes and parallel fracture zones on the claim block. Some of the ore-grade material is intensely oxidized (about 36%), but deeper drilling clearly shows the hypogene sulfide nature of the ore-grade material. The system is basically a PGM-nickel-copper system using the current pricing for these metals. If both the massive sulfide zones as well as the stringer zones are combined in the future as a target, the PGM's constitute a primary part of the future production of the system.
Geologic Sampling of Selected Grab, Trenches and due diligence Channel Sampling, Key West Mine Open Pit and Adjacent Zones
Grab Sample Number
Pt (ppb)
Pd (ppb)
Au (ppb)
Cu %
Ni %
Pd/Pt
Grade Pt+Pd+Au (ppb)
Grade Pt+Pd+Au (opt)
KW-3
300
2500
949
2.4
0.51
8.33
3749
0.109
340291
393
2245
9074
0.91
0.26
5.71
11712
0.342
340292
226
1861
1917
1.1
0.56
8.23
4004
0.117
73354
39
44
38
0.03
0.06
1.13
121
0.004
73355
348
349
132
0.18
0.19
1.00
829
0.024
73356
291
286
125
0.22
0.22
0.98
702
0.020
73357
118
177
64
0.09
0.15
1.50
359
0.010
73358
597
602
94
0.76
0.3
1.01
1293
0.038
73359
477
432
458
0.49
0.37
0.91
1367
0.040
73360
205
307
89
0.18
0.23
1.50
601
0.018
73361
1515
6685
718
2.3
0.86
4.41
8918
0.260
73362
645
799
837
2.9
0.98
1.24
2281
0.067
73363
99
453
324
2.7
0.23
4.58
876
0.026
CB9810-30
55
478
256
8.8
0.002
8.69
789
0.023
Average ratio
3.52
Due diligence Trench
Minimum Width (ft)
Pt (ppb)
Pd (ppb)
Au (ppb)
Cu (%)
Ni (%)
Pd/Pt
Grade Pt+Pd+Au (ppb)
Grade Pt+Pd+Au (opt)
Main zone
37.5
1323
3770
532
1.50
0.85
2.85
5625
0.164
KW115NE
32.8
2668
4665
1181
1.30
0.90
1.75
8514
0.249
KW50NE
39.0
1835
3970
590
2.00
0.70
2.16
6395
0.187
Weighted Averages
36.4
1909
4110
747
1.62
0.81
2.27
6767
0.198
Consultant Sampling Results of Conquistador Mines Ltd. Dec. 1999
Channel Sample #
Width (m)
Pt (ppb)
Pd (ppb)
Au (ppb)
Pd/Pt ratio
Grade Pt+Pd+Au (ppb)
Grade Pt+Pd+Au (opt)
JM-1
2.5
685
3767
651
5.5
5103
0.149
JM-2
2.3
651
1164
1575
1.8
3390
0.099
JM-3
1.9
685
2568
479
3.75
3733
0.109
Weighted Averages
2.2
673
2533
919
3.68
4126
0.120
Average
Underground Workings.
The Key West mine was discovered in 1899 with underground development during the years 1899 to 1903, when it was shut down. Ore deposits opened up and developed at the mine were estimated by Vidler (1960) to be: "30,000 tons of complex nickel-copper ore averaging 2.5 % copper, 1/9 % Ni, and 0.14 oz. Platinum per ton." The underground workings extend to about 300 ft below the surface in several levels in which are exposed two principal ore bodies. The #1 ore body averaged "4% nickel, 4.2% copper, and 0.25 oz. Platinum per ton. Data from the #2 ore body from Vidler (1960) indicates an average grade of 2.76 % copper and 1.68% nickel. According to Vidler, "the nickel-copper-platinum mineralization is found principally in the basic hornblende-biotite segregations or masses [dikes]." In 1952 an open pit was developed at the site of the main shaft for the underground workings. Some unique occurrences of platinum have been cited by Vidler. " It is also pointed out that several small native platinum nuggets have been found in and about the Key West Mine. Assays of the nickel-copper ore show platinum content up to 0.25 oz. per ton and an average platinum content of 0. 14 oz. per ton. Furthermore, there is a light colored 0.2 ft vein or streak exposed in the southwest branch of the "A" tunnel (or zero level from open pit) that has been repeatedly sampled and assayed showing a substantial platinum content. This (pegmatite or aplite ?) band or streak does not show any copper or nickel content whatsoever, but it has furnished sample assaying 0.50 oz. platinum and other samples and specimens of even higher grade, and it is, therefore, recommended that possibilities for platinum deposits occurring should not be over looked".
Drilling:
Over 20 drill holes form the basis of the 1989 prefeasibility study of James Askew and Associates. . The resource database has defined a body ranging from 100 to 6 feet wide, dipping moderately, and which averages a true width of 32 feet (10 meters) and is exposed at the surface. The calculated grades are, 0.068 opt Pd, 0.062 opt Pt, 0.35 opt Ag, 0.012 opt Au 1.61% Cu, 1.14% Ni, and 0.036% Co, from massive sulfide mineralization from the lower margin of a single lens of pyroxenite. This prefeasibility study utilized the development of an open pit with a stripping ratio of 4.62:1 using a geologic resource of approximately 240,000 tons at these grades.
Only the massive sulfides and the oxidized massive sulfides were used in the calculations above. Stringer mineralization and disseminated mineralization were not used. For example, in hole 83-12 a zone of massive sulfide is utilized whereas the stringer mineralization above was not. Combining the two would double the thickness to over 42 feet with effectively the same grade of Pt and Pd of 0.11 ounce per ton. Adding gold to these numbers would result in 0.13 opt Pt + Pd +Au. The importance of re-evaluating the ore in terms of massive, stringer, and disseminated ore is that the system thickness could effectively be doubled from 32-ft. average to over 64 ft. This could reduce the open pit stripping ratio to about 1.6 to 1.
The Askew and Associates prefeasibility study forms the basis for establishing a minimum resource for the property. We are currently looking at the metallurgy of the ore to establish the feasibility of including the lower grade material in the future.Nonetheless, the company believes that to increase the tonnage to a minimum of 500,000 tons is highly probable and it is possible to attain tonnage in the range of several million tonnes in the following exploration scenarios.
Previous, but limited exploratory shallow drilling has been done in the Key West and Great Eastern Mine areas controlled by Conquistador, but by several other companies. However, with the exception of a drillhole by BP/Amselco cited below by Bow, we have none of the data for these holes. Limited underground drilling has been cited by Beal (1965) for the Great Eastern mine.
Sunset at Key West (Nevada)
Exploration Targets
The targets are of three basic types that we will be testing in an exploration program.
1) SHALLOW ORE LENS TARGETS
The first is exemplified by the Key West Mine and is discussed by our independent consultant Jim McGlasson (1998) as well as Craig Bow (1991). These include shallow targets that could result in up to several million tons of ore, amenable to open pit mining or underground exploitation. Work on the Key West property to date indicate that these targets are related spatially to the occurrence of outcropping ultramafic dikes and sills that intrude the Precambrian host rocks.
The first goal is to take the existing property, for which we have obtained a database that includes modest resources, and verify and expand these resources. This pyroxenite is one of approximately 60 or 70 that outcrops in a complicated pattern. We would be looking for a number of these lenses, each of which may be capable of producing 300,000 to a million tonnes of ore-grade material.
A) Craig Bow has suggested "multiple, clustered deposits of low to moderate tonnage (0.5 - 10 million tons)". He has defined the potential by some detailed mapping of the system around the Key West and Great Eastern mines and suggests at least one offset target that is based on an EM study. He tested this target with two drill holes along the strike extension of the main pyroxenitic body, but failed to demonstrate the viability of the target. Our analysis indicates that the two holes were drilled into or across at least two post-mineral faults of vastly differing relative ages into portions of mostly unmineralized host rocks offset to their present position by the faults. They encountered only one thin pyroxenitic dike or sill (their "mafic amphibolite") in their second hole, even though the main ore-bearing dike is as much as 33 meters wide.
Interestingly, Bow cites BP/Amcelco as having drilled a dike 1.5 km NE of Key West that had an intercept (length not reported) with 5.6 % Ni and 8.8 g/T Pt+Pd. However there was no follow-up work apparent in Bow's study. Perhaps they did not have the claim. In addition, Bow has mapped a significant fracture zone wholly in gneiss and outside the main dike at Key West with ore grade with
B) Jim McGlasson, a consultant hired by Conquistador Mines Ltd. to do due diligence prior to signing a deal for the project area, indicated in his report in 1998 that there is " a reasonable potential to develop several lenses of ore with approximately 300,000 to 1,000,000 tons of near surface ore-grade material
C) Vidler, 1960 has written the following conclusions. "A study of the geological data and such geo-physical survey data available warrants the following favorable conclusions: 1) that similar or larger ore lens and deposits probably exist in or along or adjacent to the northeasterly trending and the easterly trending fault zones, or in or about peridotite sills not evident at the surface, and 2) that the geological and geo-physical evidence warrants a core drilling program sufficient to test a cross section of the rock or mineral formations, the three known "high magnitude anomalies" on the Colorado mining claim, one "high magnitude anomaly" on the Horseshoe-Nevada Claim, and also to test core the broad anomaly indicated along the south sideline of the Colorado Claim, indicated as "Anomaly C" on the map." (note the Colorado Claim is now the Copper Key #1 part of the Great Eastern Group of claims in our portfolio of claims).
2) DOWN DIP EXTENSIONS OF THE CURRENT ORE-GRADE ZONES
The second target type is exemplified by the Key West ore zone that has been partially drilled. This zone consists of a wide portion exposed at the surface, but which decreases in width with depth. However, some of the last holes drilled in the Key West Zone suggest that the zone, after a certain depth, begins to increase in width. Further down dip drilling may find that the target is actually wider and may contribute to a zone with much higher tonnage potential. Thus further exploration may potentially result in wider zones that may be amenable to underground mining below the 300 ft level or if wide enough and with the current average grades for the contained metals, may result in a high strip ratio open pit mine consideration.
3) DEEPER TARGETS AND CONVERGENCE ZONES OF MINERALIZATION
The third type of target is possible at some depth beneath the current claim block. The ore system at the Key West Mine is spatially and potentially genetically related to a large structural system of approximately 60 miles in length within which occur several significant magnetic anomalies. These anomalies are associated with pyroxenitic dikes and sills within which, and adjacent to which occur the ore at the Key West and Great Eastern Mines. Several other lenses, like the one at the mine, display strong convergence zones in which the metals are concentrated. The massive and disseminated sulfides occur along the lower margins of the lenses and down pipe-like bodies (convergence zones) at the intersections of the ultramafic lenses. Thus it is hoped that a larger body at depth may be present at a more substantial intersection between prominent dike-sill lenses as suggested by the geophysical anomalies which may interpreted to be at depths ranging from 300 to over 700 meters.
The lenses extend for a distance of at least 15 miles along strike and constitute a part of a more regional structure. Conquistador has acquired the original patented claims as well as a small group of older, unpatented claims. We have also accomplished an aggressive program of claim staking to enhance our position in the district.
A) A myriad of thin fractures occur immediately adjacent to pyroxenite but there are also vein-like intrusions of PGE rich sulfides parallel and sub-parallel but also significant distances lateral to the pyroxenitic dikes. These occur primarily in pegmatites and in veins associated spatially with pegmatites occupying structures also occupied by the dikes and sills. These are believed to have a structurally genetic association. These features are mostly adjacent to the pyroxenitic bodies, but some cut gneissic rocks of both sedimentary and igneous origins. Many of these fractures and indeed the pyroxenitic dikes themselves show convergence patterns characteristic of a major structural system. If this is the case, then it is highly likely that the convergence zones can be calculated and defined and that multiple targets would be expected for exploration.
B) If structural convergence zones are found to be viable targets, then it is likely that a feeder zone for these may also be present. Craig Bow has suggested that increase in polarizabiltiy shown in pseudosections generated from IP geophysical work, may represent wider zones of mineralization at depth. He states, "This suggests the possibility of a more continuous and more polarizable (sulfide-rich?) extension of the mineralized zone to depth."
References:
Bow, Craig S., 1991, Key West Mine project Area, Clark County, Nevada: 1989-1990 Status Report: Submitted to Western Gold Exploration, Inc. On behalf of Key West Mining, Inc.
Beal, L.H., 1965, Geololgy and Mineral Deposits of the Bunkerville Mining District, Clark County, Nevada: Nevada Bureau of Mines, Bull. 63
James Askew and Associates, 1989, Prefeasibility study, Key West Polymetallic Prospect, Clark County, Nevada
McGlasson, James, 1998, Key West Mine, Clark County, Nevada. Independent consultant report for Conquistador Mines Ltd.
Vidler, Walter R., Ocotber5, 1960: report on the Key West Mining Properties of the Horseshoe Mining Company located 11 miles south of Riverside, Clark County, Nevada.
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