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Canadian Shield Resources Ltd.
TSX VENTURE: EXP
Aug 03, 2010 09:00 ET
Canadian Shield Completes NI 43-101 Technical Report and Resource Estimate for Colpayoc Gold Project, Peru
TORONTO, ONTARIO--(Marketwire - Aug. 3, 2010) - Canadian Shield Resources Ltd. (TSX VENTURE:EXP) ("Canadian Shield" or the "Company") has filed a NI 43-101 Technical Report and Resource Estimate for the Colpayoc Gold Project. The report was prepared by SRK Consulting (U.S.) Inc. ("SRK") and concluded:
The Colpayoc Gold Project is an early stage gold exploration property, located 15 km southwest of the Yanacocha mine complex in northern Peru. The project contains a porphyry gold-copper system which has been the focus of most historic exploration, and additional mineralized prospects in the surrounding areas.
The area containing the porphyry gold-copper system (Daylight Zone) contains historical surface trench data and four of twelve drill holes on the property. All four drill holes contain stockwork quartz-veining and alteration, typical of a porphyry system, and contains gold mineralization hosted in altered intrusive rocks that are approximately 300m by 300m in plan on surface. Shallow drilling has demonstrated gold mineralization extends to at least 170 m depths as mineralization occurs from top to bottom of these few drill holes.
SRK has completed a preliminary resource estimate using the trench and drill hole data, and using standard block modeling techniques to result in 7.6 million tonnes at 0.59g/t Au grade for 144,600 contained ounces gold. This Inferred resource should be considered a preliminary estimate of the mineralized potential, for which verification work is required. The current classified Mineral Resource estimate for Colpayoc, at a cut-off grade of 0.3 grams per tonne is a follows:
Au Cut-off (g/t) Material Mass (Tonnes) Au (g/t) Au Contained(oz)
0.3 Oxide 4,663,275 0.59 88,800
0.3 Non Oxide 2,913,019 0.61 57,800
0.3 All Inferred 7,576,293 0.59 144,600
The state of exploration for Colpayoc is too early to justify estimating in-pit resources. SRK has estimated and is reporting an in-situ total resource rather than an in-pit resource, primarily because the resource is all classified as Inferred. In reporting the resource at a 0.3 g/t Au cut off, SRK has examined potential mineability and can state the mineralization has the potential for economic extraction at current gold prices. This resource establishes a base level from which additional resources may be expanded. Areas of mineralization defined in trenching are only partially drill tested by four drill holes and the mineralized zones remain open for possible expansion. Additional drilling is recommended to define the extent of gold mineralization beneath gold-bearing trenches.
Exploration potential exists to increase the confidence of the classification by targeted drilling; and there is potential to expand the resources by drilling additional holes beneath some of the mineralized trenches, and as offsets to existing drill holes. The mineralized areas remain open at depth in all directions.
At the Colpayoc porphyry zone, the mineralization is predominantly gold and copper and occurs with stockwork zones within alteration phases of the Miocene-age diorite.
Low grade gold, with variable and sometimes significant copper, silver, and molybdenum is present with the skarn alteration zone located up to 1,400 meters west of the Daylight porphyry zone, hosted in altered Cretaceous-age limestone. Gold and silver mineralization is also present in a northwest trending structural zone, starting 4,400 meters northwest of the Daylight porphyry zone. Initial samples from historic prospect pits identify gold values up to 30 g/t and silver values up to 900 g/t.
The deposit type that best fits the Colpayoc Property geology is a Gold-Copper Porphyry Deposit with associated skarn and distal epithermal mineralization. There are other known Au-Copper porphyry deposits in the region, including the Cerro Corona deposit, owned by Goldfields Mining Corporation (SA) and the Minas Congas deposits, owned by Minera Yanacocha. The Colpayoc porphyry is most similar in size and composition to Cerro Corona.
Several exploration targets are proposed by Canadian Shield which include the following:
The Porphyry Gold-Copper target (Daylight Zone) that centers on the outcropping and shallow drilled elliptical shaped porphyry that exhibits good quartz stockwork and pervasive oxidation at surface. This target type remains the primary target on this property.
The second target consists of magnetic highs surrounding the porphyry which may indicate the presence of higher percentage of magnetite within the altered limestone wallrocks (skarn). Historic drilling by Newcrest, intersected wide intervals of skarn alteration, ranging from 54-236 meters which included up to 72 meters of variable skarn alteration with an average gold value of 0.23 g/t gold (Drill hole CPD 02). Drill hole CPD 04 also contained significant silver mineralization in skarn, with a continuous interval of 64 meters averaging 44.8 g/t silver.
The third target type includes structurally controlled epithermal mineralization that occurs along the contact between volcaniclastic rocks and limestone, approximately 4,400 meters northwest of the porphyry system at the Daylight zone. Historic prospecting by Canadian Shield and other companies has identified high-grade gold and silver mineralization associated with manganese oxide-rich breccias and mantos, along a northwest trending fault zone.
Canadian Shield has secured surface access Agreements with all surface land owners. A disagreement with the village of Chetilla concerning ingress and egress adjacent to village lands is currently being worked out with Canadian Shield, but had not been solved at the time of my site visit.
SRK recommends an exploration program to include:
Structural mapping, sampling and multi-element analysis
RC drilling (minimum of 10 holes) to define other targets on the property
Core drilling (minimum of 10 holes) in the Daylight Zone area of mineralized trenches
A testing program of density measurements and preliminary metallurgical studies
A re-modeling of the deposit to incorporate structure, variography, new drill hole data, an a re-defined oxide boundary.
A recommended Phase I budget is presented for the above-recommended program (Section 18). The total budget is estimated to be $1,055,000 million for Phase I.
Continued successful drilling from the recommended Phase I program would justify and additional Phase II program of perhaps $2.0 million in the following year, as a 12 month program, to include further definition drilling, geotechnical drilling for potential open pit slope determinations, a definitive metallurgical program and a Scoping Study to determine the project potential for economic development.
