The past producing La Colorada gold-silver mine property is located approximately 40 km southeast of Hermosillo, Sonora State, Mexico. La Colorada originally operated as a high-grade underground mine, which closed at the start of the Mexican Revolution in 1914. During the period 1993-2000 Eldorado Gold Corp developed a bulk tonnage heap leach operation from several open pits; although the operation was sold in late 2000, production continued by a private Mexican owner until April 2002, yet La Colorada was never shut down for the lack of gold.
During the main historic mining period from 1876-1914 the production of more than 3 million ounces of gold was recorded. In I990 the Mexican Geological Service (SGM) measured 1.5 million tons of tailings that were utilized at the start of the open pit production by Eldorado in 1993.
Geological Background
The La Colorada gold vein deposits are hosted in a volcano-sedimentary sequence that has been locally altered to skarn by magma intrusions. Veins are focused along east-west and northeast-southwest trending structures that dip to the north and northwest at moderate angles, and cut across the skarn and intrusions. Surface mining was focused along three structures, the upper parts of which flare out into stockwork zones. Eight different structures in the La Colorada mine area appear to have older underground workings in gold bearing quartz veins. Past reports indicated the gold deposits formed under mesothermal or deep epithermal conditions, and implied a genetic relationship to the Cretaceous aged magma intrusions that created the skarn. Recent fluid-inclusion studies on veins indicate a low-temperature regime in the epithermal range, and radiometric age determinations indicate ages younger then those for the Cretaceous period of magma intrusion. In addition to this, recent investigations indicate some veins cut Miocene aged volcanic rocks, which suggests the vein forming period at La Colorada is as young as the veins of the Sierra Madre Occidental gold-silver belt located to the east of La Colorada.
NI 43-101 Resource Estimate
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.
The resource estimate has been generated for the Company by Mr. Gary Giroux and is presented in a NI 43-101 compliant technical report, which was prepared by independent consultants R.H. McMillan Ph.D., P.Geo., J.M. Dawson M.Sc., P. Eng. and Gary H. Giroux, M.A.Sc., P. Eng. This initial estimate does not include the recently-drilled Mina Verde nor La Veta Madre targets, broken rock possible resources (waste and leach piles), or recent results of drill testing by the Company that were unavailable at the time of compilation for the estimation. This estimate is for bulk tonnage resources only and does not address deeper vein-type resource potential.
Resource estimates were made for the El Creston and La Colorada-Gran Central deposits by G. H. Giroux of Giroux Consultants Ltd. In both cases geologic solids were created by Pediment geologists to constrain the estimation process. Drill holes were compared to the solids and assays were tagged if inside or outside the solid. Gold and Silver grade distributions for both mineralized and waste assays were examined and capping levels picked to handle outliers. Composites 5 m in length were created to honour the solid boundaries and used to model the grade continuity using variography. Blocks 5 x 5 x 5 m in dimension were estimated by ordinary kriging in a series of passes with expanding search ellipses. Bulk density in each deposit was established from measured specific gravities. Estimated blocks were classified using grade continuity. The results for a 0.3 g/t Au cutoff, a reasonable cutoff for open pit extraction, are tabulated below.
Class |
Au Cutoff |
Tonnes > Cutoff |
Grade>Cutoff |
Contained Metal |
||
Au (g/t) |
Ag (g/t) |
Au (ozs) |
Ag (ozs) |
|||
Measured |
0.30 |
3,570,000 |
1.049 |
11.12 |
120,000 |
1,280,000 |
Indicated |
0.30 |
15,690,000 |
0.963 |
7.65 |
485,000 |
3,860,000 |
M + I |
0.30 |
19,250,000 |
0.978 |
8.30 |
605,000 |
5,130,000 |
Inferred |
0.30 |
20,070,000 |
0.903 |
9.59 |
582,000 |
6,190,000 |
The combined Measured + Indicated resource in this initial estimate for La Colorada project contains 605,000 ounces of gold and 5.13 million ounces of silver within 19.25 million tonnes averaging 0.98 g/t Au and 8.3 g/t Ag. An additional 582,000 ounces of gold and 6.19 million ounces of silver are contained within 20.07 million tonnes averaging 0.90 g/t Au and 9.6 g/t Ag and are classified as inferred at the same 0.3 g/t gold cut-off.
These estimates are based on 982 historic drill holes (both reverse circulation and core holes) plus 20 reverse circulation and 3 core holes generated by the Company. In the La Colorada mineralized zone a total of 11 samples were capped at 37 g/t gold and a total of 19 samples were capped at 178 g/t silver; while in the Gran Central mineralized zone a total of 14 samples were capped at 40 g/t gold and a total of 11 samples were capped at 267 g/t silver. At El Creston all mineralized rock was assumed to be oxidized and a bulk density of 2.47 was used. At La Colorada-Gran Central, bulk densities were based on 56 samples submitted by the Company that had been segregated into four categories (oxide, mixed oxide, sulphide and waste). Since proper oxide-sulphide boundaries have not yet been established the average specific gravity of 2.62 for the three mineralized categories was used for the mineralized portions of blocks, while the average 2.73 from the waste samples was used for the waste portions of blocks.
Exploration
After the completion of its 2009 drill program the Company has reported the final drill results, which focused primarily on the Veta Madre area, a discrete gold-mineralized zone located about 1 kilometre east of the El Creston pit. Results from a deeper RC drill hole (R-131), completed outside the El Creston pit north wall and final results for the La Verde zone are also reported.
Veta Madre
At Veta Madre, mineralization is hosted within a zone of quartz vein, breccia, and stockwork interpreted to be in the upper portion of an epithermal gold-mineralized zone under shallow cover except where exposed by old shafts and trenching. Final results from 2009 testing include:
- Drill hole R-122 intersected 35 metres with 0.35 grams of gold per tonne.
- Drill hole R-123 intersected 1.5 metres with 3.0 grams of gold per tonne, and 18.3 metres with 2.88 grams of gold per tonne, including 1.5 metres with 25.3 grams of gold per tonne.
- Drill hole R-124 intersected 33.5 metres with 1.32 grams of gold per tonne.
Drill Hole 131, a deeper RC test hole located on the north side of the Creston pit, was drilled to test down-dip projections of the northern Creston vein system outside the resource. The following table summarizes intersections of gold mineralization with coincident, high silver contents. This shift to high silver to gold ratio indicates this drilled intersection is located very high in the epithermal system with fault displacement having dropped this zone downward within the west end of the El Creston pit.
Summarized results of drill hole 10-LCOL-R131
located on the north side of the El Crestón pit.
(These results were not included in the recent resource estimate)
located on the north side of the El Crestón pit.
(These results were not included in the recent resource estimate)
| Drill Hole | From_m | To_m | Length_m | Au GPT | Ag GPT | Au eq.* |
| 10-LCOL-R131 | 141.73 | 146.30 | 4.57 | 0.54 | 36.87 | 1.11 |
| and | 153.92 | 155.45 | 1.52 | 1.03 | 96.00 | 2.51 |
| and | 160.02 | 169.16 | 9.14 | 0.62 | 55.62 | 1.48 |
| and | 231.65 | 237.74 | 6.10 | 1.12 | 150.40 | 3.43 |
| including | 233.17 | 234.70 | 1.52 | 3.01 | 328.60 | 8.07 |
| and | 265.18 | 278.89 | 13.72 | 1.93 | 56.64 | 2.8 |
| including | 268.22 | 271.27 | 3.05 | 5.93 | 120.00 | 7.78 |
| and | 297.18 | 300.23 | 3.05 | 0.40 | 202.90 | 3.52 |
*Gold equivalent calculated at 1 part of gold for 65 parts of silver
La Verde
The La Verde zone, located north of the Creston pit, contains two additional reportable intervals where the company completed and previously reported most of 26 shallow drill holes totaling 2,437 metres. No resource has yet been calculated nor reported for the La Verde zone.
- Drill Hole R-60 intersected 7.6 metres with 1.57 grams of gold per tonne and
1.5 metres with 0.48 grams of gold per tonne and
1.5 metres with 4.2 grams of gold per tone - Drill Hole R-126 intersected 6.1 metres with 1.0 grams of gold per tonne and
1.5 metres with 0.54 grams of gold per tonne
The Company plans to continue to move forward with its evaluation of La Colorada's mining restart potential. To that end, further engineering and metallurgical tests will be completed during 2010.
Drill core and RC chip samples are crushed and split in Inspectorate's Hermosillo prep facility, with gold and silver fire assays performed in Inspectorate's Reno Nevada facility. Pediment adheres to a strict QA/QC program involving blanks, duplicates and standards to assure accuracy and precision. Check samples are periodically analyzed by ALS Chemex in Vancouver BC.