Promesa begins the quest for gold in “elephant country” in Peru

Promesa (ASX: PRA) is an Australian gold explorer that acquired 100% of Peru Minerals SAC, which owns 100% of the Santa Rosita Prospect, and the Victoadal and Bacata Licenses known as the Cerro Curunday Prospect.

These properties form a strategic landholding located between Barrick’s (NYSE: ABX, TSX: ABX) Lagunas Norte and Newmont’s (NYSE: NEM) Yanacoocha Mines, and are within 50 kilometres of Trujillo, which has a population of 1.5 million inhabitants.

The Lagunas Norte Mine is an open pit, crush and heap leach operation that produced 808,000 ounces of gold in 2010, at a total cash cost of US$182 per ounce, and hosts  gold reserves of 6.6 million ounces.

Yanacoocha has produced 26 million ounces of gold since 1993, and currently hosts a reserve of 4.98 million ounces and is projected to produce 675,000 ounces in 2011, at a cash cost of US$500 per ounce.

The vastness of these resources and their low operating costs now push Promesa into the spotlight as the company sets out to fast track exploration of Cerro Curunday.

Cerro Curunday prospect

The Cerro Curunday Prospect is at an advanced stage of exploration and is now drill ready following an extensive sampling and mapping campaign.

Initial testing collected 800 grab samples, rock chips, sedimentary stream, trench and channel samples that identified an epithermal gold system over a strike length of 1.8 kilometres.

These channel and trench samples returned (highlight) assays, including; 14.80 g/t gold, 10.15 g/t gold and 7.5 g/t gold.

The high gold values continue along an elevated ridge line and along slopes at lower elevations, including 4.92 g/t gold. These confirm the potential for Promesa to have a large mineralized system.

Metallurgical test-work confirmed that surface gold values are located in pervasively altered and oxidised rocks of the Cretaceous Chimu formation, with values ranging from 0.4 g/t gold to 3.5 g/t gold.

The target areas are located within tertiary aged diorite-monzonite, granite intrusions in Mesozoic marine sediments that are classic indicators for gold and copper porphyry systems.

Hydro thermal alterations at Cerro Curunday also contain evidence of quartz veins, hydro thermal breccias and stock-works with advanced argillic (clay) and phyllic pervasive alteration halos, which is a type of alteration that is found in country rocks of copper and molybdenum porphyry deposits, and is the ideal environment for epithermal high sulphidation and porphyry style deposits.

Most recent field work on the western flank of the mineralised zone at Cerro Curunday include highlights of; 484 g/t silver, 4.02 parts per million mercury, 260 ppm molybdenum, 3.5% lead, and 0.09% zinc, along with positive assays for antimony, selenium, tellurium and titanium.

This work identified three main anomalous zones, which includes an anomalous gold zone in the centre and top of Cerro Curunday that also carries some silver and mercury values. A second halo surrounds this zone and carries silver, mercury and molybdenum values, while a third outer zone carries zinc, lead and molybdenum values.

This is interpreted as a high sulphidation epithermal system in the top of the ridge line, while the lower slopes represent a transition to a low sulphidation epithermal environment.

The system is now confirmed over a strike length of 2.2 kilometres and width of 1.2 kilometres, which remains open to the east south and west and will be further tested. The total tonnage potential in this system could exceed one billion tonnes, down to relatively shallow depths of around 200 metres, and attests to the prospectivity of the area.

Alteration and gold mineralisation is known to extend for a further 7 kilometres within the license area and continues to the southwest, providing additional tonnage potential.

The company is already securing infrastructure around the prospect with the construction of a 14 kilometre unsealed road from La Cuesta to the heart of Cerro Curunday. Artesian water supplies have also been identified and permitted at Carrizo and Unquio, which are located nearby currently defined drilling locations.

Drilling underway at Cerro Curunday

On 26th August, Promesa reported 6000 metres of diamond drilling is underway, planned to test oxide ore body at the summit at Cerro Curunday.

A 30 hole will test a series of gold-bearing zones identified by channel sampling along a 2.1 kilometre strike length of epithermal gold mineralisation.

Drilling will comprise diamond drilling from surface to enable detailed logging and sampling.

Santa Rosita Prospect

The second strategic holding is known as the Santa Rosita Prospect, which  is also 100% owned and consists of approximately 1,000 hectares.

The prospect is located to the southeast of Barrick ground, at the northern end of the gold and copper rich Western Cordillera of the Peruvian Andes.

The prospect contains sedimentary, volcanic and intrusive rocks of the Jurassic period, which evolved in the middle of the Mesozoic Era. The intrusive rocks are  basic to acidic in composition, and range through diorite, grandiorite and monzonite.

The sedimentary rocks form the Chicama formation and comprise a sequence of shale and sandstone, located within an epithermal, metallogenic zone, and is associated  with Calipuy volcanics and granitic intrusions that hold significant potential for epithermal gold.

Mineralisation is associated with pyrite and chalcopyrite disseminated in veins of silica, with gold also found in quartz veins with sulphides, and also includes other sulphide minerals and alteration that includes arsenopyrite, goethite and limonite. Hydrothermal alteration and signs of a porphyry system are also identified across Santa Rosita.

The company recently issued 40 million shares and 40 million options to secure ownership of Peru Minerals, and ownership of the Peruvian Licenses.


Analysis

The commencement of drilling comes just one week after the readmission of Promesa to the ASX after the completion of an $7.51 million capital raising.

With an epithermal gold project in Peru, similar and 80 kilometres from Barrick’s Lagunas Norte, Barrickʼs 9 million ounce behometh gold producing project, comparisons are being made to Promesa’s project as an “early stage” Lagunas Norte.

While steep mountainous terrain will have its challenges, however the location, logistics and growing infrastructure will be of assistance.

A 14 kilometres dirt gravel road is being constructed from La Cuesta to Cerro Curunday. There are two artesian sources of water located 500 metres and 1,500 metres from drilling locations and access rights have been granted.

In addition, there are nearby producing gold mines - Yanacocha and Lagunas Norte.

The targets for exploration are large but not surprising given the geological environment and the regional gold discoveries.   The Oxide Zone target is one million ounces. However, the company believes there could be over two million ounces, which will require some drilling to test.

Promesa has an epithermal zone at surface at Cerro Curunday. It has identified the porphyry system beneath it and further down the terrain.

The scene is now set.  Promesa has a substantive opportunity and a prospect that has all the hallmarks of a potentially large resource.  The drill program has finally commenced.
Now begins a fascinating first step in the evolution of an Australian company drilling for gold in “elephant country”.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19011/promesa-begins-the-quest-for-gold-in-elephant-country-in-peru-19011.html