The Sierra Blanca gold-silver project lies within the highly-prospective Deseado Massif of Santa Cruz Province, southern Argentina, some 40km NW of AngloGold Ashanti’s Cerro Vanguardia gold mining operation The project consists of a “vein field” of mostly NW- and E-W-trending low to intermediate sulfidation epithermal silver-gold veins/breccias. Previous work at Sierra Blanca had been focused on the E-W-trending Chala-Achen and Lucila vein systems, where high-grade silver values had been derived from surface channel sampling (including 9.4m @ 2,362 g/t Ag at Chala-Achen; see New Dimension News Release dated 4 March, 2019). During 2019 and early 2020, exploration activities at Sierra Blanca were focused on trenching and sampling on the NW-trenching Ana (and Ana Splay), Tranquilo, and Laguna “vein fields”, with a total of 10 individual target areas having been identified for further work and drill testing.
On April 1, 2020, the Company announced the signing of an agreement with Austral Gold Limited (“Austral”)(ASX:AGD; TSX-V AGLD) through which Austral retains the right to acquire an initial 80% interest in the Sierra Blanca project for a total of USD 800,000 in cash and work commitments, with a “follow-on” option to purchase the remaining 20% interest for an additional USD 2,300,000 in cash and work commitments. Austral is 100% owner of the Pingüino project, which lies immediately to the east of the Sierra Blanca Project.
|Location||40km NW of Cerro Vanguardia Mine, Santa Cruz Province, Argentina|
|Ownership||100% Capella Minerals Ltd. Austral Gold Ltd earn-in to 80%; follow-on option to acquire the remaining 20%.
2% NSR to Sandstorm Gold Inc (with option to buyback 1% for CAD 1M), 1.5% NSR to Iamgold Corp (with option to buyback 0.75% for CAD 750K)
|Status||Exploration stage, drill ready|
|Deposit types||Low to intermediate sulfidation epithermal veins/breccias|
|Property Size||7,000 hectares (70 square kilometres)|
|Host Rocks||Sedimentary and volcaniclastic rocks, plus ignimbrites|
|Commodities||Gold & silver|
|Access||All weather road gravel roads|
Location of the Sierra Blanca and Pingüino Projects in the Deseado Massif
Sierra Blanca and Pingüino Projects - Priority Target Areas
Terms of the Austral Agreement
Austral has agreed to purchase the first 80% interest in the Argentine subsidiary that owns the Sierra Blanca project (Sierra Blanca S.A.) in two tranches through a combination of cash payments and project-level work commitments as follows:
- Tranche 1: Austral will acquire a 51% interest for US$100,000 in cash payments to Capella Minerals plus the expenditure of US$100,000 in work commitments at the project over the 12-month period following closing.
- Tranche 2: Austral will acquire an additional 29% interest for US$600,000 in work commitments on the project over the second and third years following closing (US$200,000 during the second year and US$400,000 during the third year).
Austral has also agreed to pay up to US$10,000 per year towards the cost of maintaining the Sierra Blanca mining properties in good standing over the three-year term.
After it has acquired its 80% interest in the project, Austral will have the option to acquire the remaining 20% as follows:
- 10% in Year 4 for the expenditure of an additional US$400,000 in work commitments on the project over the 12-month period following payment to Capella Minerals of US$500,000.
- 10% in Year 5 for the expenditure of an additional US$400,000 in work commitments on the project over the 12-month period following payment of $US1,000,000 to Capella Minerals.
Austral has the option to accelerate these earn-in commitments at their discretion.
2020/2021 Work Program
Austral’s work program for late 2020 and through 2021 is expected to be dominated by further geological mapping / sampling and ground geophysical surveys, with a view to completing drill target generation activities and then moving on to the diamond drilling of priority gold-silver target areas.