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Gold/Mining/Energy : Medinah Mining Inc. (MDHM) -- Ignore unavailable to you. Want to Upgrade?

To: on parole who wrote (15585)	6/17/1999 7:30:00 AM
From: Mike Gold	Respond to of 25548

COMPANION GUIDE TO THE MAY 25 HOUSE REPORT-LIPANGUE PORTION: Please first read the House Summary Report:(Yes I know it is painful but who said due diligence was easy?) medinahenergy.com and the Greg Lillar Report: medinahenergy.com This House report is basically the same as the previous House reports on Lipangue with an added section discussing the drill results and a proposed new drill program and few other odds and ends. I am going to discuss what was not in the previous House reports and also not in the Greg Lillar report. Gordon House simply presented the data from the drill program but did little to draw a picture of what it might mean. He left it up to the reader to draw their own conclusions. Unfortunately, if the reader is a simple investor(not another geologist), the report will do little to help them make an informed investment decision. (Note: The House report and the House Summary report which was posted on the web include some minor differences-in particular-the new IP survey plan was better identified in the Summary report) Claims Map: medinahenergy.com The report has a claims map showing all the new and existing claims. Basically, Medinah owns a 5.3 square mile area center around the breccia pipe.(The 5.3 square miles does NOT include the LDM side of the claim block.) It does include the critical South and East face of Lipangue mountain-down to the 1200 to 1300 meter level (recall my earlier concerns) and appears to adequately cover all areas of likely minerlization associated with the Lipangue breccia and associated porphyry system. The Cerro Dorado claims probably only cover the epithermal(vein) deposits that are associated with any porphyry system. considering the distances involved.(Of course the whole area is very prospective-might be multi porphyry systems/pipes.) IGNEOUS BRECCIA vs. HYDROTHERMAL BRECCIA: More than one type of breccia was encountered in the drill program. The significance of this appears to be that there was more than one(perhaps several) minerlizing events that overlapped each other. Increases the likelyhood that the minerlization that is encountered will be at a higher concentration and perhaps more widespread than from a single event. It also signficantly complicates developing a geologic model of the events that occurred there. HOLE 7 RESULTS: Recall that Hole 7 was drilled into the portion of the pipe closest to the surface Between 53 to 92 meters grades .35 g/t gold, 13.58 ppm silver, 0.35% copper Between 137 to 138 meters grades 1.64 g/t, 19.5 ppm silver and 3.303% copper The assays numbers on this hole were a little dissappointing. Please read below for House's rather interesting explaination . “The assay results returned on samples from the breccia were rather surprising in the extend and amount of mineralisation present, considering there was no surface expression of the minerealisation and the few surface samples taken in earlier programs had been disappointing. The extent and depth of the surface leaching and depletion in minerlization was not expected to be so intense and complete, even for gold which is not expected to be removed to such an extend by surface weathering and leaching. The paucity of relict mineralisation in the surface exposure and outcrops certainly explains why the breccia pipe had not been intensively explored before now.” “It was expected there would be some supergene enrichment if mineralisation was encountered in the breccia pipe, such supergene enrichment is characterised by replacement of sulphides such as chalcopyrite by chalcocite. But is was not expected to occur at the depths where it is seen in holes L99-03, L99-05, L99-06 and L99-07. These occurrences suggest that such supergene enrichments within the breccia pipe could carry to great depths. The nature of the breccia pipe with high porosity and permeability to mineralising fluids perhaps accounts for the depth of supergene enrichment encountered so far.” “COMPARISION OF THE ASSAY RESULTS FROM DRILL HOLES THAT INTERSECTED THE BRECCIA PIPE SHOW DIFFERENCE IN QUANTITY OF GOLD AND COPPER, EVEN THOUGH THERE WERE NO NOTABLE DIFFERENCE IN THE AMOUNT OF MINERALISATION OBSERVED DURING THE LOGGING OF THE DRILL CORE. It appears that the “best” assay results were obtained in drill hole L99-03, even though there appeared to be similar or more mineralisation in the other two drill holes on Line E, L99-06 and L99-07. Drill hole L99-03 is the southernmost of the three drill holes on Line E and intercepted the breccia pipe at the greatest depths, which suggests that the mineralisation in the other two drill holes may have been diminished by leaching due to groundwater movement and the effects of supergene enrichment.” “It was observed earlier that the vugs(minerlized filled small cavities) within the breccia contained chalcocite and a dark green earthy chlorite which appeared to have been washed out of the vugs in many cases, the extent of this erosion of minerals by drill water is not known BUT SUCH A LOSS WOULD DIMINISH THE VALUES RETURNED BY ASSAY. There is no method available to determine if there is in fact a loss of values, the taking of sludge samples would not show such a loss since the drill cuttings sampled would contain mineralisation representative of the drill core and the values in the vugs.” It rather sounds like the gold/copper assay results are lower than what is actually present. Recall that the chalcocite contains a very high percentage of copper and entrained gold. A little of the mineral goes a long way. Loss of it in a sample due to washout by water could greatly effect the numbers. WHAT SHOULD WE CALL THE NEW ROCK DISCOVERED BY HOUSE? GORDONDIORITE? Whatever this black stuff is that they found-we want to find more of it!!!! Strange rock types suggest strange geology... “At 107.65m a dark grey to black, silicified dyke of magnetic "granodiorite" with very heavy disseminated chalcopyrite-pyrite, up to 25% by volume, was intersected. The rock was fine grained, very magnetic and very siliceous, AND COULD NOT BE IDENTIFIED. Several samples of the dyke were sent for petrographic analysis, the petrographic report showed it contained 25% potassium feldspar and gold bearing chalcopyrite. The footwall to this 'granitic' dyke is a silicified dark green fluidised quartz-feldspar rich granodiorite with sericite alteration and much pyrite. Further into the footwall, from 113.00m to 121.00m, there are a series of xenoliths or veins of the black dyke intrusive within sericitically altered granodiorite. The Gold-Copper assays from this intersection were spectacular, with values from 1.39 g/t to 26.90 g/t Gold reported and Copper values from 0.192% to 3.116%.” NEW DRILL PROGRAM: House recommends a 5000 meter drill program(as much or more drilling will occur at LDM as well) and another IP survey to further outline the breccia zone. Since a new IP survey has been done subsequent to the time House developed a the drill program plan-it is no longer a valid drill strategy, IMO. Based on water cooler talk, the new IP survey may have located the underlying intrusive and associated minerlization just South of the previous drill program and previous IP survey. If true, it would be rather silly to further define the breccia zone prior to going after the real meat and potatoes of Lipangue-ie the Porphyry deposit. In any case, House is expected to return to Chile late next week to begin the next phase of drilling. Rumor is the IP survey already has been completed but the results were not included in the report(GEODATOS may still be writing up the final report-not sure.) The IP survey apparantly consisted of 10 kilometers of infill lines using a larger dipole distance than the last survey in order to see to a greater depth in the area of interest. New area also was surveyed just South of the previous survey in an attempt to locate the intrusive and further define the plunging pipe. Also a down hole mag survey was done-ie probes are placed on the bottom of the drill holes in order to see down to the 600 meter level. “Recommendations are made for an IP/Resistivity geophysical survey using 200m dipole-dipole configuration on lines 100 meters apart. Because the initial IP/Resistivity survey was successful in targeting the breccia pipe on Line E using 100 meter dipole-dipole configuration, the geophysicists at GeoDatos suggested that a 200 meter dipole-dipole configuration could be used to trace the breccia pipe to depth on the southern part of the grid. The IP survey will cover infill lines from Line D to Line H as well as the existing lines, and extend further to the south in an attempt to trace the mineralised breccia pipe to depth.” WHAT WAS NOT DISCUSSED: House made no mention of the porphryry system/intrusive related deposit likely to be associated with the breccia pipe or specifically where it might located.(The only hint-the pipe plunges S/SE-probably towards the intrusive.) No mention of any other pipes. No mention of the relationship between Los Dos Marias and Lipangue.(I expect it will discussed in the LDM portion of the House report.) No mention of possible quanity or expected grade of minerlization at Lipangue.