South American Gold Corp. (OTCBB: SAGD) is pleased to provide an update on its activities in Colombia, South America in a location referred to as the Santacruz gold project.
W e believe that the Narino province of Colombia represents an historic gold mining district that has been underexplored by modern exploration techniques. The Company is currently in the process of evaluating the area for potential acquisitions in addition to field work in the Santacruz Gold project area.
South American Gold has signed a definitive agreement acquiring 25% of the equity of a privately-held company, Kata Enterprises Inc. ("Kata Enterprises"), with an option to increase the Company's ownership interest to 100%. Kata Enterprises through a subsidiary owns an 85% equity interest in Minera Narino S.A.S. ("Minera Narino"), which has a contractual right, subject to the satisfaction of certain conditions, to acquire a mining concession contract covering an area referred to as the Santacruz Gold Project. The mining concession application is in process, and an initial financial and technical package has been provided to INGEOMINAS, the agency to register the concession, for their review and approval. South American Gold is in the process of creating baseline social and environmental studies which will be required for further permitting requirements should a mining concession contract covering the Santacruz Gold Project be granted and assigned to Minera Narino.
Field reconnaissance work, which the Company began earlier this year, has been ongoing to cover the 1,800 + hectare area (approx. 7 square miles). The initial focus is on geologic mapping and confirming historical data from government studies conducted in the 1980s. To date this work has confirmed the location of several former and current artisanal mines and workings within the project boundaries. In addition, the Company has been evaluating and sampling the nearby Las Delicias and El Diamante mines to increase its knowledge of the general area. In particular, the intent is to locate projections of veins from the two producing mines from adjacent properties onto the Santacruz Gold project . In the Cerro Los Churros area of the proposed Santacruz concession area, five old workings were identified Mineralization was identified in the form of quartz veins with associated arsenopyrite and iron oxide, in part derived from alteration of basic rock-forming minerals and oxidation of pyrite in the veins and adjacent rock
An inactive small mine, known as Mina San Antonio, lies within the proposed concession area. Evidence shows the mine was operated as an open-pit facility and that it contained several underground workings. Sampling at the Mina San Antonio has proved inconclusive to date.
Surveying by South American Gold was conducted at the El Chitan area mine within the proposed concession. The Chitan I mine is inactive while the adjacent Chitan 2 mine and the nearby Narvaez area have artisanal mining occurring, with workings all being found along one vein at El Chitan mines and probably a different vein at Narvaez. The veins are located along faults and the adjacent wall rock shows phyllic alteration with a high sericite, pyrite and quartz content, and the accessible veins are narrow under 0.3 m. Preliminary channel sampling was conducted at El Chitan 1 and 2 mines and the Narvaez mine and surface outcrops in accessible areas with (fire) assays performed by SGS Peru. This work was conducted according to quality control procedures supervised by our Vice President of Exploration. |  |
