New Peru ProjectAndeanGold acquires 11 Peruvian gold-silver concessions
2008-12-17 09:27 ET - News Release
Mr. Anthony Ciali reports
ANDEANGOLD ACQUIRES 17 GOLD-SILVER CONCESSIONS IN PERU
AndeanGold Ltd.'s wholly owned Peruvian subsidiary, PeruGold Resources SAC (PGR), has signed assignment and purchase option agreements with three concessionaires to acquire 11 gold-silver exploration concessions in Peru, amounting to 1,325 hectares. PGR has applied for an additional six exploration concessions, amounting to approximately 2,000 hectares that are contiguous with the 11 concessions. The overall project area, referred to as the Rio Seco project, covers approximately 3,325 hectares, and is located in the department of Libertad, approximately 33 kilometres southeast of the city of Trujillo. There is excellent road access to the project (45 minutes from Trujillo), which is located at an altitude of between 200 metres to 600 metres and has an arid and dry climate.
PGR has been conducting due diligence and general field investigations on the project, pursuant to an exclusivity agreement PGR signed with the concessionaires on Oct. 2, 2008. The investigations have included regional geological reconnaissance, detailed geological and alteration mapping, and continuous channel sampling of outcrop faces, veins and trenches.
To date, four mineralized zones have been outlined and 10 main veins have been identified. Preliminary data suggest the shear-controlled west and south zones have the best potential for hosting significant gold mineralization.
West zone
The west zone comprises two target areas
Camino contains four subparallel quartz veins with an overall strike length of up to one kilometre and exhibiting gold values up to 39.8 grams per tonne (g/t) gold and 93.7 g/t silver in separate samples (see attached table). In addition, two developments of stockworking have been discovered, covering a collective area of approximately 96,000 square metres and containing anomalous gold and silver in rock trenches.
Santa Catalina contains two subparallel main veins with an overall strike length of up to 300 metres and assaying up to nine g/t gold and 184 g/t silver in separate samples (see attached table).
South zone
The south zone is located along the southern portion of the shear zone and to date, two gold-bearing veins have been identified with strike lengths of approximately 300 metres, with assays of up to 33.76 g/t gold and 13.1 g/t silver in separate samples (see attached table).
SELECTED ASSAY RESULTS TO DATE FOR CERTAIN KEY VEIN STRUCTURES AND AN INITIAL, LIMITED TRENCHING PROGRAM Sample Width Au Ag Cu Pb type (metres) (g/t) (g/t) (%) (%)West zoneCamino stockwork AVein 1 Channel 0.20 39.86 78.20 0.41 4.42 Channel 0.25 8.30 24.00 0.43 3.10 Channel 0.25 6.78 67.00 0.46 2.01Vein 2 Channel 0.25 24.80 12.30 0.20 0.66Camino stockwork BVein 3 Channel 0.30 2.90 13.60 2.08 0.22 Channel 0.40 13.80 93.70 0.73 0.82Vein 4 Channel 1.20 1.07 35.50 0.20 0.29 Channel 2.00 2.39 29.90 0.17 0.14Santa Catalina targetVein 6 Channel 0.60 9.07 6.30 0.04 0.29 Channel 0.30 8.70 2.20 0.26 0.39Vein 7 Channel 0.60 6.73 184.00 0.48 1.58South zoneVein 8 Channel 0.15 28.30 8.00 0.04 0.50Vein 9 Channel 0.20 30.11 3.50 0.06 0.29 Channel 0.10 13.90 13.10 0.50 1.69 Channel 0.12 33.76 3.00 0.04 0.19
STOCKWORKS (trenches along access road) Sample Length Au Ag Cu Pb type (metres) (g/t) (g/t) (%) (%)West zoneCamino stockwork ATrench 5 Channel 18.00 1.35 6.42 0.03 1.12Trench 6 Channel 30.00 1.92 10.24 0.10 0.64Trench 8 Channel 48.00 0.35 2.96 0.04 0.10including Channel 6.00 1.06 14.45 0.06 0.34Trench 9 Channel 48.00 0.48 1.48 0.03 0.08including Channel 9.00 1.22 4.17 0.05 0.17Camino stockwork BTrench 18 Channel 2.00 3.82 4.90 0.39 0.05Trench 20 Channel 5.00 2.23 37.00 0.59 0.64Trench 21 Channel 9.00 0.80 10.03 0.35 0.10including Channel 3.00 2.21 27.50 0.81 0.24
A summary table of all sample assays can be found on the company's website.
The project area contains numerous outcrops of the Late Cretaceous "coastal batholith," composed of porphyritic diorite, granodiorite and tourmaline granodiorite rocks affected by a zone of strong shearing. These rocks have intruded metamorphic and volcanic sequences. On the western section of the project area, and hosted in granodiorite, are several sets of subparallel veins and veinlets striking N40 degrees east, east-west, north-south and dipping subvertically.
During the first quarter of 2009, planned exploration programs will be focused on detailed geochemical sampling
grids over the main targets identified to date in the west and south zones and photo interpretation, followed by structural mapping.
All assays are based on continuous channel samples, generally three metres in length. All samples from the project were sent for sample preparation and assaying to the Inspectorate laboratory in Lima, Peru.
According to the terms of the agreements signed on Dec. 11, 2008, PGR has the option to purchase, for $340,000 (U.S.), a 100-per-cent interest in each of the 11 concessions by making the following cash payments, in total, to the concessionaires.
On signing the agreements: $50,000 (U.S.) (less a credit of $4,500 (U.S.) for prior cash advances)
Six months after signing: $30,000 (U.S.)
12 months after signing: $50,000 (U.S.)
18 months after signing: $50,000 (U.S.)
24 months after signing: $50,000 (U.S.)
30 months after signing: $50,000 (U.S.)
36 months after signing: $60,000 (U.S.)
In addition, the concessionaires are entitled to receive a 2-per-cent net smelter return royalty (NSR) on any production from the concessions. Once PGR has exercised the option and made all of the option payments, PGR has the right to purchase the NSR on the basis of $200,000 (U.S.) per 1 per cent of NSR. PGR has the right to exercise the option at any time during the three-year option period.
Anthony F. Ciali, president and chief executive officer, stated: "We are very pleased to have acquired our first project in Peru. PGR is actively investigating other potential mineral properties and regions for future acquisitions, and we are encouraged by the number and quality of available Peruvian prospects under investigation that meet with the company's exploration growth strategy."
Dr. William F. Lindqvist, a director of the company, is the qualified person in compliance with National Instrument 43-101 with respect to this release.