Peñasco Quemado
Snapshot
Size: 3,746.18 hectares
Location: Sonora, Mexico
Target: Silver ± Gold (Epithermal)
Development Stage: Resource Definition
Location and Access: The Peñasco Quemado property is located within the northcentral portion of the state of Sonora, Mexico. The property is approximately 70 kilometres (km) southwest of Nogales, on the border with the American state of Arizona and 77 km northwest of the Mexican city of Magdalena de Kino (Magdalena).
Summary: Drilling at Peñasco Quemado in 2006 drilling program outlined a historical measured and indicated resource of 2.57 million tonnes at a grade of 117 g/t Ag for a silver resource of 9.63 million ounces. The silver mineralization is associated with manganese oxides in a near surface shallow westerly dipping zone of polymictic conglomerate in the northern part of the deposit and in stockwork quartz and manganese oxides in a rhyolite dome in the southern part of the deposit. The mineralization has been traced along a 2 km strike length and drilling to date has been relatively shallow, less than 100m deep, mainly focused on the silver-bearing conglomerate.
Geology: The Peñasco Quemado property lies within the Sierra Madre Occidental metallogenic province which extends along western Mexico from the border of the Mexican and American states of Sonora and Arizona, south to the state of Jalisco. The deposit is hosted within Volcaniclastic Conglomerate and Upper Conglomerate which is up to 200 m thick. The conglomerate is in a high angle fault contact with a volcanic sequence that includes andesite tuffs, andesite breccia and andesite flows.
The deposit mineralization consists of silver with minor amounts of copper. To date, the specific silver minerals have not been identified, although a preliminary petrography and mineralogical study interpreted that the silver mineralization is in the form of cerargyrite and/or argentojarosite. The preliminary study also found that the silver-copper mineralization at Peñasco Quemado corresponds to an enrichment, which created a concentration within the clastic sequence deformed by shearing. More investigation needs to be conducted to determine more accurately the silver mineral species present within the deposit and other mineral associations.
Exploration Upside: The West Zone Peñasco Quemado deposit area is only tested at shallow depth (approx. 150m). The deposit is open down dip and along strike, deeper feeder structures have not yet been adequately tested. Additionally untested potential exists on the property where MT and Geochemical anomalies have been identified.
Two separate zones of anomalous silver mineralization were previously identified at Peñasco Quemado by mapping and percussion drilling. Of the two zones, only the West zone was previously drilled and the East zone randomly chip sampled. The East zone is considered to be part of the same epithermal system which deposited the West zone, but higher in the system and above the silverrich West zone.
Figure 1: Location and Claims disposition of the Peñasco Quemado Property.
Historic Resource
Historical 2007 Mineral Resources Estimate on the Peñasco Quemado Property
(30 g/t Silver Cut-off Grade) Based on data available as of November 2006
| Category | Tonnes (Millions) |
Silver Grade (g/t) |
Silver Grade (oz/t) |
Silver (Millions of ounces) |
|---|---|---|---|---|
| Measured | 0.123 | 151.9 | 4.88 | 0.599 |
| Indicated | 2.442 | 115.0 | 3.70 | 9.032 |
| Measured + Indicated Total | 2.565 | 116.8 | 3.76 | 9.631 |
| Inferred | 0.001 | 41.4 | 1.32 | 0.001 |
Lodestar Battery Metals states with equal prominence that it is not treating the historical estimate as current mineral resources or reserves. At this time, a qualified person has not done sufficient work on behalf of Lodestar to classify the historical estimate as current mineral resources or reserves. Investors should not rely on the historical estimate as a current mineral resource estimate until it has been verified and supported in a technical report in accordance with NI 43-101.
| Source and date of the historical estimate, including any existing technical report | Information relating to these historical estimates is summarized from the following technical reports: Lewis, W.J. and McCrea, J.A., (2006), Updated NI 43-101 Technical Report and Resource Estimate for the Peñasco Quemado Silver Property, Magdalena – Tubutama Mining District Sonora, Mexico, 152 p. completed for Silvermex Resources Limited. |
| Relevance and reliability of the historical estimate | The Reports were compiled in accordance with Canadian Institute of Mining (2005) standards and best practices for Mineral Resources, adhering to NI 43-101. Silvermex established QAQC programs that were reviewed by the independent QP who accepted the data and results as suitable for mineral resource estimation at that time. |
| Key assumptions, parameters, and methods used to prepare the historical estimate | The data base for the historical resource estimate consisted of 24 reverse circulation holes from a 1981/82 program, 17 reverse circulation holes from a 2006 program and 8 diamond drill holes from a 2006 drill program. Assay data was available for all 49 of the drill holes and 12 trenches. The mineral resource estimate used a kriging estimation method to establish mineralized zones with a cut-off grade of 30 g/t Ag and assay’s capped at 700 g/t Ag. |
| Resource categories used | In accordance with NI 43-101 as defined in 2011, the Peñasco Quemado historical estimate used the terms inferred, indicated and measured mineral resource having the same meanings ascribed to those terms by the CIM Definition Standards on Mineral Resources and Mineral Reserves (August, 2004) were used to classify mineral resources with the classification of each kriged mineralized block dependent upon the number of penetrating holes. An in-situ block density of 2.50 t/cu meter was assigned the mineralized blocks. Resource blocks were estimated by ordinary kriging with samples within a search radius of 25 meters classified as a measured mineral resource, within 47 meters classified as an indicated mineral resource and within 70 meters classified as an inferred mineral resource. |
| More recent estimates or data available to the issuer | There are no more recent estimates available to the project. |
| Work needed to be done to upgrade or verify the historical estimate as current mineral resources or mineral reserves | An independent Qualified Person has not done sufficient work to review the historical data and historical estimate to determine what further work would be required to write an updated current Technical Report in accordance with NI 43-101. It is envisaged that this will involve an update/refinement to the geologic model and grade interpolation methods. The company has currently commissioned an update Ni 43-101 report and MRE at the Peñasco Quemado Property. |
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