In late April 2011, Cangold Ltd. (TSX: V.CLD, Stock Forum), signed a letter of intent with Brigus Gold Corp. (formerly Linear Gold). By paying one million dollars and issuing six million shares to Brigus Gold Corp. (TSX: T.BRD, Stock Forum), CLD entered into an option agreement to acquire a 75% interest in the Ixhuatan advanced stage gold project.
The Deal
To earn its 75% interest Cangold will be required to pay to Brigus a total of CDN$10 million and issue twenty million shares over a three year period. CLD also has to complete an independent third party feasibility study on the Campamento Deposit located on the Ixhuatan property.
Brigus will receive a payment of CDN$5.00 per ounce of gold in the Proven and Probable category included in the feasibility study and has a two percent net smelter royalty (NSR) on production.
Location
The Ixhuatanproperty is in the north-western part of Chiapas State, southern Mexico, 100 kilometers (km) south of the city of Villahermosa. Chiapas State lies in the 450km long gap between the Trans Mexican Volcanic Belt to the northwest and the Central American Volcanic Arch to the southeast. The area is both volcanically and tectonically active and covers the triple junction of three crustal plates – the North American, Caribbean and the Central American. This tectonic setting has generated a highly favorable environment for the development of structures and the associated fluid flow required for major world class gold and base metal deposits.
Ixhuatan
The Ixhuatanproperty comprises 4,176 hectares and there are several distinct styles of mineralization around the southern and western flanks of a highly eroded volcano.
The property is host to the Campamento Au-Ag deposit (carbonate base metal Au mineralization) and the Cerro La Mina Porphyry Cu-Au-Mo prospect.
Several other Au and Au-Ag mineralized zones and exploration targets have been identified. The San Isidro, Laguna Chica, Central, Caracol and Cacate prospects, are all located in a one to two kilometer wide, four km long corridor between the Campamento and Cerro la Mina deposits.
Both the porphyry and carbonate base metal mineralization on the property are prone to supergene gold enrichment and produce strong gold in soil geochemical anomalies.
The only other significant mineralization discovered to date, close to the Ixhuatan property, is the Santa Fe Mine area (The Santa Fe mine claims have belonged to Minera Frisco since the 1960’s, Minera Frisco is controlled by telecom tycoon and mining magnate billionaire Carlos Slim). The Ixhuatan property was acquired by Linear, in 2000, due to its proximity to the Santa Fe mine.
Investigation of numerous gold and copper zones at the former polymetallic (gold, silver and copper) Santa Fe mine indicated that the geological setting was a high sulphidation environment with the potential for a copper/gold porphyry system at depth.
A stream sediment geochemical study was carried out in the northern portion of Chiapas. The survey indicated strong gold in stream sediment anomalies on the Ixhuatan property and the properties geochemical anomalies were located during follow-up work.
Three areas of Au-Cu-Mo (molybdenum/moly) geochemistry - the San Isidro, Central and El Campamento zones - were found to be highly altered in a similar fashion to the Santa Fe area.
More than 89,000 meters of drilling in 342 holes have been completed on the Ixhuatan Project.
Campamento
Gold and silver mineralization occurs with base metals in veinlets and as wall rock disseminations with native gold and electrum being the dominant gold bearing minerals.
The first drill campaign was conducted on the property between May 2004 and October 2007. There was 69,679 m of drilling done in 282 drill holes. This drilling was completed on six separate targets but most of the drilling occured on the Campamento Zone.
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