Cayden Resources acquires option for El Barqueño gold property in Mexico

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 property.
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 performed.
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 designed.
Only after the company has done its own drilling, assaying, and applied its own geostatistical techniques will it put out a NI 43-101 compliant resource.
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, Nevada.
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 exploration properties.
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 gold.