This news was out a couple weeks ago and looks interesting, notice the share structure and the fact that SBL is carried til a production decision, would be nice to see them hit a few higher grade intercepts during the current 5,000 M drilling campaign however.
Santa Barbara starts 5,000 m drill program at Sancos
2013-09-09 08:15 ET - News Release
Mr. Christoph Lassl reports
SANTA BARBARA ANNOUNCES COMMENCEMENT OF DRILLING AT THE SANCOS PROPERTY IN PERU
Santa Barbara Resources Ltd. has commenced the phase 2 program of drilling on the company's flagship Sancos project, Peru. The company is conducting a 5,000-metre reverse circulation drill program that is expected to be completed within 10 to 12 weeks. Assay results will be announced when received and compiled.
This second phase reverse circulation drill program at Sancos will test four targets in the high-potential Sancos Central zone with the objective of encountering higher-grade gold mineralization associated with potential feeder zones identified through a geophysical survey, as well as testing previously defined areas of hydrothermal and phreatic breccias. Within these target zones significant gold mineralization has been defined by surface sampling in trenches with gold values of 13 metres containing five grams per tonne gold as well as drill intercepts from the initial drill program, including 154 m of 0.45 g/t gold and 94 m of 0.47 g/t gold, both starting from surface.
The current 5,000 m program was designed after combining all existing data with new, detailed geological and structural mapping of the target zone by Santa Barbara's and Rio Alto's geologists in co-operation with an international expert geological consultant. Significant geological evidence indicating potential high-grade gold mineralization in feeder and breccia zones was accumulated during the recent surface exploration program. A total of approximately 20 drill holes, with target depths ranging between 200 and 300 metres, are planned during this campaign. Access roads and drill platforms to conduct the current program have been constructed.
Christoph Lassl, chief executive officer of the company, commented: "We have combined all geological and mineralogical evidence available to us at Sancos to generate several vectors directed towards identifying potential higher-grade feeder zones and significant gold mineralization within brecciated host rocks. The planned drill holes are focused on four high-priority targets within the Sancos Central zone. We look forward to the execution of this drill program, hoping to unlock and expand the mineral potential at Sancos Central.
Option and joint venture agreement
Under the terms of the option and joint venture agreement, Rio Alto has the option to acquire an initial 51-per-cent interest in the Sancos project within a three-year period by incurring an aggregate of $4.5-million (U.S.) expenditures on the Sancos project and may earn an additional 15-per-cent interest in the Sancos project within the subsequent two-year period by undertaking all necessary actions required to prepare the Sancos project for a production decision. Rio Alto will also make certain cash payments to Santa Barbara. At this stage Santa Barbara may elect to participate proportionally in the costs of the development and construction of a mine on the Sancos project, and maintain its interest in the Sancos joint venture at 34 per cent, or allow Rio Alto to arrange for project financing for mine construction, including Santa Barbara's proportional share, in which case Rio Alto will have acquired an additional 9-per-cent interest in the Sancos project, leaving Santa Barbara with a 25-per-cent interest in the Sancos project.
Further details of the agreement can be found in the company's news release dated June 27, 2013.
Sancos project
The Sancos project is located in the mining-friendly Ayacucho region of Peru. The property hosts a large high-sulphidation epithermal gold-silver mineralized system. The Sancos project encompasses 8,200 hectares, with 2,000 hectares held directly by Santa Barbara. Santa Barbara has the option, subject to certain back-in rights, to acquire a 100-per-cent interest in the remaining 6,200 hectares of the Sancos project from Barrick Gold's Peruvian subsidiary. The terms of the Barrick option, including Barrick's back-in right in certain circumstances, are described in the notes to the annual financial statements of Santa Barbara. During the term of the Rio Alto agreement, Rio Alto will finance Santa Barbara to make cash payments due to Barrick pursuant to the Barrick option. If Barrick exercises its back-in right after Rio Alto has earned an interest, Santa Barbara and Rio Alto will be diluted pro rata and the back-in purchase price, of three times each parties' expenditures on the Sancos project, will be paid proportionally to their participation in the project at the time of exercise of the Barrick back-in.
The technical content of this news release has been reviewed by Stewart Wallis, PGeo, consultant to the company, who is a qualified person as defined by National Instrument 43-101.
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