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Friday, 21 June 2013
Estrella Gold says partner Cliffs to continue exploration at Henry Sur
Estrella Gold Corp (CVE:EST) has said that its partner, Cliffs Natural Resources (NYSE:CLF), has decided to fund additional exploration work on the Henry Sur property in Peru.
The project, which was identified as a target under the alliance agreement with Cliffs last year, is made up of 16 concessions spanning a total of 11,600 hectares.
"We are pleased with the results of our initial exploration work at Henry Sur and believe that the property may offer the potential for the discovery of a major copper skarn system with by-product gold, zinc and lead," said president and CEO of Estrella in a statement released late Thursday, John R. Wilson.
"Continuing work with Cliffs on this project offers the potential for increasing Estrella shareholder value, and we look forward to additional encouraging news in the coming months."
The property is located around 30 km east of the town of Chincha, with work this year on the project, planned to start in July, to be fully funded by Cliffs. Estrella will continue in its role as project manager of the site.
Work will include additional reconnaissance as well as detailed geological mapping and geochemical sampling.
The company said Thursday that mapping so far has found around 20, "relatively small" garnet skarn zones, which it says almost always occur at the contact between the limestone and the "adjacent granodiorite". They range from a few metres to 35 metres wide, and up to 350 metres long.
So far, 96 surface rock chip samples have been collected, with the majority taken within these contact zones between the sedimentary sequence and the adjacent granodiorite. Grades of up to 9.3 per cent copper were detected, the company said, along with anomalous gold, zinc and lead.
The company said that while the known mineralized bodies appear to be small, there could be larger bodies at depth.
Under the deal with Cliffs, if the Henry Sur project is deemed a "property of merit" by Cliffs, it will become a joint venture, with both parties each owning a 50 per cent interest. Cliffs will be able to acquire an additional 20 per cent in Henry Sur by spending an additional US$4.0 million and completed 3,000 metres of drilling within four years. If Cliffs decides not to take the additional 20 per cent interest, the property will revert 100 per cent to Estrella.
Cliffs stake can also be boosted to 80 per cent by completing a prefeasibility study or defining a resource containing a minimum of 1.0 million ounces of gold within four years of earning the 70 per cent holding.
The initial alliance agreement between Cliffs and Estrella from which the Henry Sur property was discovered was terminated after the the two-year term expired.