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Plomosas Project

 

The 51% owned high grade Plomosas Zinc Project covers 11 Exploration and Exploitation Concessions totalling 3,019Ha in area with an extensive history of development in base metal operations. Plomosas is located in the northern Mexican state of Chihuahua, approximately 350Km from the border with the U.S state of Texas.  Chihuahua City is approximately a two hour flight from Dallas and just over a one hour drive from the project on sealed roads.     The shallow dipping (10°-40°) Plomosas mineralisation itself has been mined in several stages since 1943 down to approximately 270m below surface via room and pillar stopes using traditional air leg drill and blast techniques. The mineralisation appears to continue at depth and there is over 6 km strike of prospective stratigraphic horizon within the tenement package providing for excellent additional exploration potential and drill targeting. Recent results from underground sampling returned the expected high grades throughout the main part of the mine however also identified an additional ore zone located in the footwall to the main manto style mineralisation.  This is discussed below.

 

Figure 1: Project concessions are on the NE flank of the Sierra Monillas range and 5km from a sealed highway.

Plomosas – Geology

The high grade Plomosas base metal mineralisation appears to comprise predominantly intrusive-related hydrothermal replacement of limestone rich sedimentary units within a well-defined stratigraphic horizon, similar in style to Mississippi Valley Type (MVT) deposits.

Mineralisation in the Plomosas district exists as stratiform sheets of manto style mineralisation with cross cutting “chimneys” influenced by the location of crosscutting linking faults. The host rocks are predominantly limestone and shale with marbles present in areas including the hanging wall sequence. The hanging wall to the mineralisation is constrained by a zone of ductile-brittle deformation that is part of a larger ‘horst’ structure where a series of normal faults cross cut a sequence of folds and thrusts. This system of brittle deformation is evident along a series of normal sub vertical faults generally striking NW-SE.

At Plomosas, the average thickness of the manto style mineralisation is over 3m within a thicker sequence up to 25m thick containing limestone + shale ± marble that dips uniformly at low angles (10° – 40°) to the north east. Mining has extensively focused on the limestone units and shown the ore to be highly visible with sharp contacts.

Plomosas – Technical and Legal Investigations

Due diligence completed in early 2015 by SRK Global and ARC Resources Pty Ltd on behalf of the Company returned positive results which are summarised below:

• the style of mineralisation and tenor of grades have been confirmed along with the prospectivity for identifying significant additional high grade mineralisation;
• targets for immediate drilling and resource definition programs have been identified which are immediately accessible;
• there is moderate capital requirement to refurbish the mine infrastructure which includes production and ventilation shafts and many kilometres of underground mine development. 
• underground mine ground conditions and geotechnical requirements have been identified as good and manageable;
• the existing processing plant can be refurbished to treat ore up to a rate of 200 tonnes per day for potential early production but will need to be largely replaced if or when production is  increased to 500 – 1,000tpd; been of high quality and in high demand for blending with ore from other operations in the region;
• Capital and operating costs are anticipated to be low on a global comparison and in line with other operations in the immediate region however further work will be required through scoping and feasibility studies to confirm and quantify these estimates.

The legal and commercial due diligence similarly provided a level of comfort as to the status and good standing of the Plomosas tenements and ownership and the framework of operating in Mexico.

Plomosas – Recent Sampling Results 

Analytical results of a number of channel and grab samples recently taken from various parts of the Plomosas underground workings to better understand the grade distribution of the mineralisation are tabled below in Table 1.

Note that some channel and rock samples returned such high grades of zinc that the values exceeded the upper detection limit of the ore grade analysis method used by ALS Laboratories. These samples are currently being re-assayed using the method of analysis for concentrate material.

Two samples, LVL5ST and TRS1, have highlighted a previously unexplored area that justifies additional investigation. Both these samples represent areas located in the footwall to the main manto mineralisation and both samples represent a different style of mineralisation to that observed in the manto itself.

• Sample TRS1 assaying returned grades of 24.2% Zn, 0.80% Pb, 13.3g/t Ag and represents mineralisation derived from a massive sulphide replacement style zone called Tres Amigos.
• Sample LVL5ST returned assays of 16% Zn, 12.2% Pb, 28g/t Ag and is interpreted to come from a chimney system (or feeder zone) possibly linking the historically mined marble unit and the Tres Amigos horizon.

Figure 2 shows the areas from which the various samples were taken, with Figures 3 to 7 showing the sampled areas in more detail. Figure 2 is a section showing the current work in progress along with a generalised interpretation of the mineralised zones within the deposit. All figures are located in Appendix

High zinc grades continue to validate the Company’s view that the Plomosas deposit is amongst the highest grade zinc projects currently being explored or mined and the imminent commencement of our first drilling program is an exciting time for the Company.

SAMPLE East WGS84 North WGS84 Elev (m) Sample Type Zn% Pb% Ag ppm
CV022 476026.708 3217306.184 988.090 Channel >30.00 12.55 63.5
CV023 476007.910 3217315.238 992.368 Channel >30.00 4.39 56.9
CV025 475967.108 3217322.141 998.334 Channel >30.00 13.05 52.6
VJ003 476226.062 3216271.419 1124.365 Channel >30.00 4.80 41.0
VJ015 476251.224 3216215.149 1105.509 Channel >30.00 2.25 38.4
CV021 476025.160 3217278.220 1003.780 Channel 26.50 8.22 34.3
CV026 476054.390 3217295.900 989.020 Channel 24.20 9.66 32.1
TRS1 476124.430 3216628.280 1000.171 Grab 24.20 0.80 13.3
VJ019 476251.623 3216268.216 1106.179 Channel 23.10 3.52 30.7
VJ006 476243.040 3216235.505 1121.258 Channel 22.70 8.39 31.3
CV015 475700.529 3217228.718 1115.010 Channel 22.40 10.55 25.3
28VJ004 476231.179 3216255.156 1125.661 Channel 22.40 7.75 32.0
CV016 475710.862 3217228.690 1113.049 Channel 21.90 9.02 26.1
CV008 475723.281 3217204.340 1111.427 Channel 20.70 7.76 14.6
CV009 475722.353 3217197.795 1113.340 Channel 19.35 11.75 29.7
CV024 475981.095 3217322.645 995.496 Channel 19.25 7.19 41.3
CV001 475729.952 3217188.893 1114.060 Channel 18.05 9.33 24.5
LVL5ST 476076.450 3216965.240 990.430 Grab 16.00 12.20 28.0
CV011 475717.566 3217203.063 1113.001 Channel 12.55 5.53 12.2
CV010 475722.315 3217201.614 1112.981 Channel 10.75 4.76 13.5
CV002 475733.632 3217189.056 1113.516 Channel 10.35 3.85 12.5
CV027 476063.310 3217293.010 987.900 Channel 10.05 8.64 15.7

Table 1. Rock chip and channel sample results (note: Values reporting >30% Zn are samples that exceed the upper detection limit for Ore Grade Analysis method Zn-OG62.

plomosasfig2

Figure 2. Plomosas Mine Overview showing locations of work activities and sampling locations

plomosasfig3

Figure 3. Plomosas Section A – A’ (refer Figure 1) showing the current activities in the mine and spatial interpretations of various mineralised areas and exploration target zones

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