1
BY RYAN WALKER
INGENERIO JACOBACCI, ARGENTINA
— Results from ongoing infill drilling
have convinced Aquiline Resources
(AQI-V) that it will soon outline more
than 1 million oz. at its Calcatreu
gold-silver project, which straddles
the border between Rio Negro and
Chubut provinces in the Patagonia
region of Argentina.
The company’s optimism seems
well-founded, as the latest batch of
reverse-circulation holes returned the
best-ever intersection from the property.
Hole 136, collared on the littletested
northeastern portion of the
Vein 49 system, returned 18 metres
(beginning 5 metres below surface)
grading 16.4 grams gold and 36.1
grams silver per tonne. No. 136 was
among 13 angled holes (minus 55-68°
sunk as part of the initial phase of a
4-phase, 12,000-metre drill program.
Other highlights from the recent
drilling include hole 126, which
returned 12 metres (from 22 metres)
grading 7.7 grams gold and 19.8
grams silver, and hole 138, which
included a 10-metre section of 10.6
grams gold and 200.1 grams silver
beginning at a depth of 47 metres.
The remaining holes generally run
1-9 grams gold and 10-60 grams silver
over widths of 1-60 metres. Aquiline
says the results confirm the presence
of a new, shallow, high-grade zone of
mineralization in Vein 49. Assay
results for samples from three other
holes are pending.
Covering some 730 sq. km, Calcatreu
is centred on a low-sulphidation,
quartz adularia epithermal gold system.
LaSource Développement
Argentine first discovered gold-bearing
mineralization in the area in late
1997 in a quartz float along the side
of a road. Normandy Mining of Australia
inherited the project when it
acquired LaSource from the French
government in 1998. The property
fell into Newmont Mining’s (NEM-N)
hands via its acquisition of Normandy
in 2002.
Aquiline acquired Calcatreu in
July by agreeing to pay Newmont a
little more than US$2 million in
staged cash payments over 36
months. The major retains a 2.5% net
smelter return royalty on gold and
silver production and a 60% back-in
right on certain mineral claims,
excluding the Vein 49 deposit. The
major can opt to back in, until the initiation
of a feasibility study, by
spending three times what Aquiline
has spent on exploration.
“We set out to fill a niche as a midtier
gold company,” Aquiline CEO
Marc Henderson told The Northern
Miner during a recent site visit. “We
felt there were a number of major
mining companies that owned projects
that were probably too small for
them. Our plan was to go after those
projects, and we managed to acquire
a good one from Newmont.”
In addition to the property,
Aquiline also picked up Newmont’s
Argentinean operating company
Minera Normandy Argentina, including
its database, office, staff and 7
million pesos worth of tax losses,
thanks to the major’s decision to exit
Argentina outright.
At the time of acquisition, Newmont’s
in-house estimated mineral
resource for Vein 49/Nelson area
stood at 5.6 million tonnes grading
2.97 grams gold and 26 grams silver.
The figure was not compliant with
National Instrument 43-101.
Aquiline began infill drilling in
Calcatreu takes shape under Aquiline
Infill drilling on Vein 49 at Aquiline’s Calcatreu gold-silver project in Argentina’s
Rio Negro province.
2
June 2003 to confirm Newmont’s figure,
and by October, Micon International
calculated that the indicated
resource was about 1.4 million tonnes
grading 5 grams gold and 39 grams
silver per tonne. An additional 4.5
million tonnes of inferred material
grades 2.8 grams gold and 26.9 grams
silver. The resource is contained in
the Vein 49 and nearby Nelson lowsulphidation
gold systems, with the
bulk found in quartz veins in the oxidized
portion of Vein 49.
“We basically have 700,000 oz. of
gold-equivalent, and we’re aggressively
trying to make that number
bigger and take the inferred ounces
into the indicated category,” said
Henderson.
Oxidation at Calcatreu is deep,
especially around Vein 49, so the
drilling is easy and lends itself to the
reverse-circulation method. The transition
from oxide to primary mineralization
occurs at a depth of around
120 metres. Aquiline’s vice-president
of exploration, Martin Walter, said
only about 1-2% of the rocks outcrop.
Henderson noted that outcropping
is also not evident at some of the better
parts of the systems at
AngloGold’s (AU-N) 92.5%-owned
Cerro Vanguardia gold-silver mine
and Meridian Gold’s (MNG-T) El
Desquite property. “Since we’re talking
about the same type of geologic
systems, we hope to see history repeat
itself here at Calcatreu,” he added.
Most of the existing resource is
above 150 metres of depth, and
Aquiline will drill to a depth of 300
metres to test for underground mining
potential. The deeper drilling into
the primary ore will also help determine
the type of treatment plant
required.
Aquiline’s approach at Calcatreu is
two-pronged. So far, the focus has
been on fast-tracking the 700,000 goldequivalent
ounces in Vein 49 toward a
production decision. The second phase
will entail testing the other 10 veins
systems already outlined.
Reverse-circulation drilling continues
to fill in Vein 49. Prior to the holiday
break, some 105 holes had been
sunk; plans call for about 250-270
holes in all to complete the infill program.
A second drill will be added at
the end of January, depending upon
rig availability.
The company expects to sink 150
additional holes for 9,000-10,000
metres on Vein 49 by early March.
The results will then be sent to Micon
for an updated resource calculation.
Walter figures that the Vein49/
Nelson deposit will easily break the
million-oz. level in the next resource
calculation: “I think this thing is
heading to 2 million oz., to tell you
the truth. Any sort of discovery
between the existing resources and
the Amistad target is going to make
this project interesting. If we can get
another Vein 49, that would be great,
but we still have to go out and drill
the other targets.”
Although the results from a first
batch of metallurgical tests (on mostly
oxide material plus at least one
sample of primary ore) are not
expected until late January, preliminary
plans call for a 400-to-500-metre
open-pit operation with onsite
milling and heap leaching. The pit
would be centred on the northeastern
part of Vein 49.
“The best-case scenario would see
us in production by the first quarter
of next year,” said Walter. “As long
as gold stays on side, we’ll be OK.
We’ll make money on this at a gold
price of US$315 per ounce, but we’d
like US$350 an ounce.”
The second prong of Aquiline’s
attack will see Quantec fly an
induced-polarization (IP) and magnetic
survey over a 3-by-4-km corridor
between Vein 49 and Amistad
early in the year. Once the infill program
wraps up on Vein 49, the second
rig will begin testing targets outlined
by Quantec’s IP survey. Roughly
5,000 additional metres of drilling are
planned for the Nelson vein in 2004.
“There’s a lot of smoke in the
other veins,” said Walter. “They certainly
have reasonable widths of
twenty to thirty metres at one to
three grams.”
Photo by Ryan Walker
3
Exploration potential
In all, Normandy turned up 11
mineralized vein systems at Calcatreu
in the late 1990s. Striking more than
2 km and running up to 20 metres
wide, the near-surface Vein 49/
Nelson prospect has seen the most
exploration.
Grab sampling at the as-yetundrilled
Amistad target, to the
northeast, yielded up to 38 grams
gold per tonne, with trenching
returning up to 6 grams across 11
metres.
At Viuda de Castro, 12 km north
of Vein 49, previous trenching
returned up to 9 metres grading 2.3
grams gold per tonne. Another
trench in the area ran about 6 grams
over 6 metres. The target remains
undrilled.
At Nabel, 77 of 226 scattered samples
returned more than 1 gram gold.
Trenching yielded up to 15 metres of
4 grams gold.
Highlights from trenching at the
Trinidad prospect include 13 metres
of 3 grams gold in trench 4, 16 metres
of 1.8 grams in trench 5, and 3 metres
of 5 grams in trench 7.
Aside from Vein 49, the prospects
have mostly been tested by just a single
drill hole.
Also awaiting exploration are several
anomalies and alteration zones
outlined by regional stream-sediment
sampling by Normandy. The program
comprised 429 samples from the Calcatreu
area plus more than 1,100
regional samples collected on an
average spacing of 5 sq. km per sample.
The survey covers both Calcatreu
and the nearby Navidad project.
Community relations
Aware of the region’s growing
popularity among “eco-tourists” and
non-governmental organizations,
Aquiline is taking a rigorous
approach to addressing environmental
concerns and improving community
relations. The company wishes to
avoid the problems encountered by
Meridian Gold at its stalled Esquel
gold project, elsewhere in Chubut
province.
“The problems Meridian is facing
have forced us to realize we have to
be on top of this aspect from day
one,” stressed Henderson. “At the
end of the day, I believe the town will
be very supportive of the project, but
we do need to temper people’s
expectations.”
Calcatreu’s location in a remote,
sparsely populated region may also
help save it from some of the problems
encountered at Esquel, which,
by comparison, is 170 km to the
southwest in a more picturesque
mountain terrain, about 6.3 km from
the city of Esquel (pop. 35,000). The
closest town to Calcatreu is Ingenerio
Jacobacci, about 50 km to the south,
with around 6,000 inhabitants.
To help with community relations
and permitting, Aquiline has retained
Buenos Aires-based Ambiental to
provide environmental consultation.
Ambiental expects to wrap up an
environmental impact assessment
(EIA) by June 2004 and has already
had discussions with members of the
local community, including the
mayor of Jacobacci, local businessmen,
school principals and landowners.
Aquiline’s manager in Argentina,
Vernon Arseneau, said the meetings
were successful at acquiring information
on which to build the company’s
strategy. He added: “You can’t
ignore them [members of the local
community], since they face the
direct impact of the project.”
The next step will be to present the
EIA to the provincial government,
followed by consultation with officials
in Buenos Aires.
With virtually no other industrial
projects in the area, the Calcatreu
project is conspicuous, and so, Arseneau
said, the company needs to be
sensitive. “It’s a poor town and the
needs are extreme. We can help, but
we can’t do everything, and that’s
one of the other management issues
we’ll need Ambiental to help with.”
Aquiline intends to hire locally as
much as possible. However, with the
metallurgical results still outstanding,
the company does not yet know what
kind of construction will be required,
and therefore it cannot predict how
many workers will be required.
Looking forward, Ambiental
expects approval for the EIA by
October 2004, whereupon the company
will begin work on an environmental
management plan. To lend
Ambiental a hand, Aquiline has lined
up Golder Associates, which will
ensure that the environmental practices
are up to Canadian standards.
Golder will also work with Micon on
the pit design.
“Permitting will be the key issue;
the technical side of the project is
robust,” said Walter. “It’s the permits
that are going to be the big hurdle.
The hardest permit to obtain will
be for the tailings dams. That’s
always the biggest liability. It’s not so
much the plant as the potential for
tailings leaks people are worried
about.”
To help fund the next phase of
work, Aquiline plans to raise $6 million
via a best-efforts private placement
of 5 million units priced at $1.20
apiece. Each unit consists of one
share and half a non-transferable
warrant, with a whole warrant good
for one share at $1.65 for 18 months
after closing.
The agents for the financing, coled
by Pacific International Securities
and Dundee Securities, have the
option of increasing the offering by
15% at any time before closing.
Meanwhile in Santa Cruz
province, Aquiline says privately
owned, Australian-based Oroplata
has notified Xstrata of its intention to
match Aquiline’s offer for the Cerro
Negro gold project. Aquiline has
offered US$1.5 million over 15
months, with US$500,000 due on
closing. It plans use a portion of the
proceeds from the private placement
to cover the acquisition. Oroplata has
until late January to come up with
guaranteed money to match the offer
otherwise Aquiline will take the
property.
The more advanced Cerro Negro
project is reportedly home to a preliminary
in-house resource estimate
of 620,000 oz. gold grading 3.2 grams
gold per tonne. The project comprises
11 contiguous mining tenements
covering 250 sq. km in the northwestern
corner of the province. The main
target is low-sulphidation quartz vein
systems similar to those at the nearby
Cerro Vanguardia mine. The property
also includes at least 10 other targets
identified by trenching alone.
Exploration potential
In all, Normandy turned up 11
mineralized vein systems at Calcatreu
in the late 1990s. Striking more than
2 km and running up to 20 metres
wide, the near-surface Vein 49/
Nelson prospect has seen the most
exploration.
Grab sampling at the as-yetundrilled
Amistad target, to the
northeast, yielded up to 38 grams
gold per tonne, with trenching
returning up to 6 grams across 11
metres.
At Viuda de Castro, 12 km north
of Vein 49, previous trenching
returned up to 9 metres grading 2.3
grams gold per tonne. Another
trench in the area ran about 6 grams
over 6 metres. The target remains
undrilled.
At Nabel, 77 of 226 scattered samples
returned more than 1 gram gold.
Trenching yielded up to 15 metres of
4 grams gold.
Highlights from trenching at the
Trinidad prospect include 13 metres
of 3 grams gold in trench 4, 16 metres
of 1.8 grams in trench 5, and 3 metres
of 5 grams in trench 7.
Aside from Vein 49, the prospects
have mostly been tested by just a single
drill hole.
Also awaiting exploration are several
anomalies and alteration zones
outlined by regional stream-sediment
sampling by Normandy. The program
comprised 429 samples from the Calcatreu
area plus more than 1,100
regional samples collected on an
average spacing of 5 sq. km per sample.
The survey covers both Calcatreu
and the nearby Navidad project.
Community relations
Aware of the region’s growing
popularity among “eco-tourists” and
non-governmental organizations,
Aquiline is taking a rigorous
approach to addressing environmental
concerns and improving community
relations. The company wishes to
avoid the problems encountered by
Meridian Gold at its stalled Esquel
gold project, elsewhere in Chubut
province.
“The problems Meridian is facing
have forced us to realize we have to
be on top of this aspect from day
one,” stressed Henderson. “At the
end of the day, I believe the town will
be very supportive of the project, but
we do need to temper people’s
expectations.”
Calcatreu’s location in a remote,
sparsely populated region may also
help save it from some of the problems
encountered at Esquel, which,
by comparison, is 170 km to the
southwest in a more picturesque
mountain terrain, about 6.3 km from
the city of Esquel (pop. 35,000). The
closest town to Calcatreu is Ingenerio
Jacobacci, about 50 km to the south,
with around 6,000 inhabitants.
To help with community relations
and permitting, Aquiline has retained
Buenos Aires-based Ambiental to
provide environmental consultation.
Ambiental expects to wrap up an
environmental impact assessment
(EIA) by June 2004 and has already
had discussions with members of the
local community, including the
mayor of Jacobacci, local businessmen,
school principals and landowners.
Aquiline’s manager in Argentina,
Vernon Arseneau, said the meetings
were successful at acquiring information
on which to build the company’s
strategy. He added: “You can’t
ignore them [members of the local
community], since they face the
direct impact of the project.”
The next step will be to present the
EIA to the provincial government,
followed by consultation with officials
in Buenos Aires.
With virtually no other industrial
projects in the area, the Calcatreu
project is conspicuous, and so, Arseneau
said, the company needs to be
sensitive. “It’s a poor town and the
needs are extreme. We can help, but
we can’t do everything, and that’s
one of the other management issues
we’ll need Ambiental to help with.”
Aquiline intends to hire locally as
much as possible. However, with the
metallurgical results still outstanding,
the company does not yet know what
kind of construction will be required,
and therefore it cannot predict how
many workers will be required.
Looking forward, Ambiental
expects approval for the EIA by
October 2004, whereupon the company
will begin work on an environmental
management plan. To lend
Ambiental a hand, Aquiline has lined
up Golder Associates, which will
ensure that the environmental practices
are up to Canadian standards.
Golder will also work with Micon on
the pit design.
“Permitting will be the key issue;
the technical side of the project is
robust,” said Walter. “It’s the permits
that are going to be the big hurdle.
The hardest permit to obtain will
be for the tailings dams. That’s
always the biggest liability. It’s not so
much the plant as the potential for
tailings leaks people are worried
about.”
To help fund the next phase of
work, Aquiline plans to raise $6 million
via a best-efforts private placement
of 5 million units priced at $1.20
apiece. Each unit consists of one
share and half a non-transferable
warrant, with a whole warrant good
for one share at $1.65 for 18 months
after closing.
The agents for the financing, coled
by Pacific International Securities
and Dundee Securities, have the
option of increasing the offering by
15% at any time before closing.
Meanwhile in Santa Cruz
province, Aquiline says privately
owned, Australian-based Oroplata
has notified Xstrata of its intention to
match Aquiline’s offer for the Cerro
Negro gold project. Aquiline has
offered US$1.5 million over 15
months, with US$500,000 due on
closing. It plans use a portion of the
proceeds from the private placement
to cover the acquisition. Oroplata has
until late January to come up with
guaranteed money to match the offer
otherwise Aquiline will take the
property.
The more advanced Cerro Negro
project is reportedly home to a preliminary
in-house resource estimate
of 620,000 oz. gold grading 3.2 grams
gold per tonne. The project comprises
11 contiguous mining tenements
covering 250 sq. km in the northwestern
corner of the province. The main
target is low-sulphidation quartz vein
systems similar to those at the nearby
Cerro Vanguardia mine. The property
also includes at least 10 other targets identified by trenching alone. |
