Polymetallic junior, Metminco (ASX:MNC), has entered into a joint venture (JV) with AngloGold Ashanti Colombia SA to assess and develop the Chuscal gold prospect in Quinchia, Colombia.
Chuscal is a major drill-ready gold exploration target, defined by anomalous gold levels in both soil and rock chip geochemistry. It is situated 1,700 metres south of the proposed Miraflores plant and 1,100 metres south of Tesorito.
The Chuscal gold target is just 1,700 metres south of MNC`s proposed plant, which is another significant gold target, together with Tesorito, which sits within a three kilometre radius of the Miraflores deposit.
Chuscal features a large, undrilled surface gold geochemical anomaly (soil and rockchip) with high-grade samples (up to 54gpt) within a large lower grade envelope.
Channel sampling from a small scale underground mine indicated continuous, highly encouraging grades beneath the target zone.
Drilling is set to kick off as soon as permits and approvals are granted, anticipated in Q2 2019.
MNC Executive Chairman, Kevin Wilson, commented on the announcement: The Chuscal target represents a major opportunity for Metminco. It complements our existing gold resource at Miraflores and the target at Tesorito.
We look forward to working with our partner at AngloGold to explore and develop this exciting addition to our portfolio in Quinchia.`
Drill program development
Channel sampling of the underground will be undertaken and soil sampling will be extended to the north of the existing anomaly (subject to landowner access).
This process will facilitate confirmation of existing results and assist developing the structural model.
On top of that, 3D modelling of existing aeromagnetic data will be undertaken to complement the surface information and assist to define drill targets.
Drilling will begin once exploration titles are granted and all permits and approvals are obtained, which is expected in Q2 2019.
More about the JV
The key terms of the JV are as below:
MNC 10% ownership, AngloGold 90%
MNC can earn a further 41% interest by spending US$2.5 million over three years, including at least 7,500m of drilling. AngloGold is free carried during this period.
Once MNC has earned 51% interest, the parties may participate pro rate or dilute. On a party being diluted to 9.9%, the participation of the diluting party reverts to a 2% Net Profit Royalty
MNC is the manager of Chuscal JV
AngloGold has a one-off right to buy back a 21% interest from MNC on the publication of a JORC resource of at least 3 million ounces of gold
The price of a 21% interest is to be agreed between the parties or determined by an independent valuer
On exercise of the buyback right: ownership will be AngloGold 70% and MNC 30%, AngloGold will be manager of the JV
AngloGold will free carry MNC through feasibility and until permits have been granted for a +250,000oz annual production, development proposal
Other terms as usual for a joint venture of this nature
The geological nitty gritty
The Chuscal gold zone is associated with two diorite stocks (most likely from the Miocene age), that have intruded into the large Cretaceous age body known as the Irra Monzonite.
These are part of a system that generated a large gold rich hydrothermal event that produced a northwest orientated, 900m by 500m zone (+100ppb gold in soils) within which highly anomalous rock samples have been collected by AngloGold.
Rock chip sampling to date has defined:
A central zone of 600m by 240m (183 samples), with an average grade of samples is 2.66gpt gold (uncut) or 1.94 gold (cut), which is incorporated within
A broader area (main zone) of 900m by 530m (289 samples) where the average grade of samples is 1.79gpt gold (uncut) or 1.33gpt gold (cut)
Some background on the Quinchia Gold Project
Miraflores deposit (MNC 100%) 0.88Moz gold Resource and is subject to an ongoing Environmental Impact Assessment due for submission in 2019, including assessment of a treatment plant;
Dosquebradas deposit (MNC 100%) 0.92Moz gold Resource estimated under NI 43-101
Recently drilled Tesorito prospect (MNC 100%) including TS-DH-07 which intersected 253m at 1.01 g/t gold from surface (starting at 2.9m) including 64m at 1.67 g/t gold from 144m
The undrilled Chuscal gold target
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