Mexico-focused explorer Cayden Resources (CVE:CYD) said Wednesday that it has acquired an option to earn a 100 percent interest in the 9,800-hectare El Barqueño gold property located 110 kilometres west of Guadalajara in the state of Jalisco, Mexico.
Under the option, Cayden said it would make payments to a subsidiary
of Grupo Mexico (IMMSA) over a three-year period totalling US$8 million,
with payments of $2.1 million in the first 24 months.
The company’s shares rose 2.44 percent to $1.68 on the back of the announcement.
Cayden noted that in an internal report dated January 9, 2005, IMMSA
defined a non-compliant resource of roughly 2.4 million tons at an
average grade of 3.62 grams per ton (g/t) gold, equivalent to about
290,000 ounces of gold over several prospects on the El Barqueño
The company said that the property contains "significantly
underexplored" areas of gold mineralization near areas of past
production and other deposits.
"El Barqueño gives Cayden shareholders the opportunity to benefit
from a second highly prospective gold project in another prolific metals
producing area in Mexico," said Cayden CEO Ivan Bebek.
"El Barqueño has large mineral systems at advanced stages of
exploration that have both the size and grade potential, to host
multi-million ounce deposits that can be discovered through the
application of systematic, modern exploration."
The company said it did not find information in the existing data
that any previous grid based soil, rock or geophysical surveys were
Therefore, Cayden said that its plan will first focus on applying
modern grid based geochemical and geophysical exploration techniques to
the property, after which time a comprehensive drilling program will be
Only after the company has done its own drilling, assaying, and
applied its own geostatistical techniques will it put out a NI 43-101
Cayden reported that the geology of the property consists of
andesitic volcanic rock, which host gold-silver-(copper-lead-zinc)
mineralization in an extensive network of veins with very large and
extensive alteration halos.
The company said that the government of Mexico undertook exploration
and mining activities in the area in the mid 1980s, producing around
250,000 ounces of gold from two separate small pits that make up only a
very small portion of the mapped mineralization.
Cayden said the option deal announced today is subject to a 1.5
percent net smelter return (NSR), and annual advance royalty obligations
after 24 months from option exercise, if commercial production has not
started by then.
The company will pay a finder’s fee equivalent to 10 percent of the
value of the option, at a rate not to exceed US$800,000, it said, which
will be paid 80 percent in shares with the balance in cash.
Cayden is a junior mining company focused on precious metal projects
located throughout the Americas. In late March, the company unveiled
positive drill results from its Quartz Mountain property near Fallon,
The results were from eight step out holes that followed up on
significant grades and widths of silver and base metal mineralization
found in holes in February.
Highlights of those results included 18.3 metres of 119 g/t silver,
0.3 g/t gold, 0.32 percent copper, 2.73 percent zinc, and 1.89 percent
lead in hole QM-0023.
The majority of holes encountered intercepts greater than 30 g/t
silver, Cayden said, and in excess of 1 percent combined lead and zinc.
As of late March, the company was finishing its phase one drill
program and expected assays from four more holes, after which time it
said it would determine a geologic model for mineralization and design
the next phase of drilling.
The Quartz Mountain project consists of an option with
Vancouver-based Railhead Resources, under which Cayden can earn either a
50 or 60 percent interest in three groups of Nevada silver-gold
Earlier in March, the company unveiled initial results from its drill
program at the Las Calles target and its trench program at the La
Magnetita and La Joya targets, each located on the Morelos Sur gold
project, located in the Nukay mining district of central Guerrero State
in southern Mexico.
Significant results at the Las Calles target included LCDD0093, which
intersected 14.0 metres grading 4.2 g/t gold, including 2.0 metres at
16.0 g/t gold. The hole also intersected 6.5 metres grading 0.62 g/t