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The CLH is located within the Greater Las Huaquillas(“GLH”)Project which comprises a significant land package assembled by the Company. The GLH project consists of:
- the 9 CLH concessions that host the historical gold, copper, zinc and lead mineralization totalling approximately 3,600 Ha, and
- 9 additional concessions located contiguous with CLH and staked by Fidelity (100%).
The mineral concessions are shown in Figure 1.
The project has not been the subject of a resource estimate compliant with NI43-101. However,themost advanced of the previously recognised mineralised zones, the
Sulliden concluded that “The overall geological setting suggests that the Las Huaquillas property compares well with other caldera-related, porphyry copper-gold systems of the Circum Pacific Rim. Based on the data presented here, the Los Socovanes zone is interpreted as an epithermal gold-silver-tellurium system … superimposed on a porphyry system. This superposition is an important criterion used in identifying world-class deposits (Sillitoe, 1994, 1995b).”
Following a detailed review of the project, in
Whilst these resource studies are historical in nature and are not consistent with NI 43-101 standards, they provide the Company with confidence that the Project represents a large mineralised system, with opportunities to potentially delineate a significant mineral resource. In addition to the precious metalendowment, preliminary reviews of historical studies by past operators as well as the Geological,
In addition to the Los Socavones epithermal gold zone and associated base metal prospectivity, historic drilling outside the
The Company has not conducted any work to establish the relevance & reliability of the historical estimate. There has not been sufficient drilling and/or sufficient previous exploration at Las Huaquillas upon which to base a mineral resource or mineral reserve estimate compliant with the standards of National Instrument 43-101. It should be noted that the historical resource related information outlined in this announcement has been derived from: NI 43-101 Technical Report (the “Technical Report”) on the Las Huaquillas Au, Ag, Cu Property,
For additional information, refer to the Disclaimer & Forward-Looking Statements section of this announcement. The technical information in this announcement has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 (“NI 43-101”) and has been reviewed and approved on behalf of the Company by
Per the terms of the agreement, the Company can acquire an additional 5.5% ownership of the Project by completing the following;
- Total cash consideration of
$500,000 US payable in two instalments. The first instalment of$300,000 US to be paid upon signing the agreement. An additional$200,000 US to be paid three months after signing.- The Company will fund up to
$3,000,000 US in underground sampling and exploration drilling to underwrite the publication of a new NI 43-101 technical report aimed at declaring inferred resources and to be completed within 18 months following receipt of drilling permit approvals.
Rial Minera SAC, led by Fidelity, will immediately commence planning for the upcoming exploration program to include community relations, environmental permitting,geologic mapping and sampling, underground sampling and metallurgical testing, geophysics, 5,000m to 7,500m of diamond drilling, to culminate with an NI 43-101 technical report. Once the NI 43-101 is completed, the Company will have earned it’s 50% ownership in the
Once the JV is established, the JV partners will define further exploration programs and other value accretive activities. In the event of negotiation for the sale of all or part of the Project, the JV partners will establish a consideration sale price in line with standard project acquisition valuations based upon ‘in the ground’ gold equivalent values being realised in the market for resource projects. Each JV partner will hold a right of first refusal on any sale of any of the other’s interest in the JV (“Preferential Acquisition Right”). In addition, the JV partners agree to a “Right of Co-sale (Tag Along)” provision whereby if the Preferential Acquisition Right is not exercised, each partner will have the right to participate in the sale for the same price and under the same conditions as the other partner. Any sale will be subject to a 2.5% NSR, which will accrue to the JV partners in proportion to their ownership. No buydown clause was included at this time.
In 1997 and 1998, Sulliden carried out an integrated two phase exploration program including; line cutting, geophysics, soil, stream, rock geochemical and geological surveys, and 26 diamond drill holes (DDH) were drilled by Sulliden, for a total of 5,671m (refer Fig. 2). The gold-silver epithermal mineralization discovered along the Socavones trend was followed for at least 2.1 kilometres via geophysics, soil and rock sampling and drilling. Five significant mineralized zones were identified at the project as follows: (i) Los Socavones, (ii) El Huabo, (iii) Las Huaquillas, (iv) Cementerio and (v)
- Epithermal Au-Ag; low sulphidation at the El Huabo and Las Huaquillas showings of the Los Socavones zone.
- Epithermal Au-Ag-Cu; high sulphidation at the Porvenir- Huabo Alto silicified ridge.
- Au, Ag, Zn. Pb-quartz stockwork at the Los Socavones.
- Porphyry Cu ± Mo ± Au within the Cementerio and
San Antonio intrusions.
Sulliden estimated that a 500m section of the 2,200m longLos Socavones structure hosts a historical near-surface geological resource of 6.57 Mt grading 2.12 g/t Au and 25.2 g/t Ag, equivalent to 446,000 ounces of gold and 5.3 million ounces of silver at a 1 g/t Au cut-off. The historical resource, based on 10 drill holes and 20 mineralized intercepts, was estimated to a depth of 200m, and is reported as an historic resource estimate in an NI 43-101 Technical Report prepared for a party unrelated to Fidelity in
Significant Mineralised Zones – Historical
The Los Socavones anomaly is a major NE-SW trending mineralized fault zone that extends for at least 2.5km and has a width of approximately 100m. The anomalous zone consists of two distinct Au-enriched pyrite-sphalerite-galena quartz stock-work zones surrounded by a low-grade gold zone composed of disseminated and narrow stringers of pyrite with minor sphalerite and chalcopyrite.
To date, 1,000m of its strike length has been drill tested and 400m underground workings including 100m vertical development has been carried out. Drilling has intersected the mineralization at a depth of approximately 200m. The mineralized zone average true thickness is approximately 19 m with a maximum thickness of 65m within the zone’s centre.
The Cementerio Cu-Au porphyry system is located 1,000m south of the Los Socavones zone. It comprises extensive argillic, phyllic and hematitic alteration partly visible along the road leading to the Las Huaquillas village. A 600m by 900m sub-circular multi-phase diorite intrusion characterized by equigranular and porphyritic textures is spatially related with the mineralization.
The
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Fig 1: Significant Mineralised Zones at Las Huaquillas
The El Huabo Au-Ag anomaly is located near the Los Socavones structure within altered plagioclase porphyritic volcanic rocks members of the Oyotún Formation.
The Las Huaquillas anomaly is located some 850m to the NE of the El Huabo anomaly. The mineralization is hosted in strongly sericitized and argillic altered Oyotún Formation rocks that are crosscut by narrow quartz veins and accompanied by fine quartz vug filling. The geological similarities between the Las Huaquillas and the El Huabo anomalies indicate that both are part of the same low-sulphidation epithermal system developed along the Los Socavones structure.
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Table 1: Historical Exploration Activities
Significant Intercepts
Historical drilling at the
About
On behalf of the Board of
CEO, President and Director
Tel: +1.778.828.9724
Email:dean@fidelityminerals.com
For more information, please visit the corporate website athttp://www.fidelityminerals.com or contact:
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Disclaimer & Forward-Looking Statements:This news release contains forward-looking statements. Forward-looking statements are statements that relate to future events or future financial performance. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements speak only as of the date of this news release. This news release may also contain inferences to future oriented financial information (“FOFI”) within the meaning of applicable securities laws. The information in this news release has been prepared by our management to provide a context for the further acquisition of 5.5% of Las Huaquillas and to provide the reader with an outlook for our future activities and anticipated key milestones and may not be appropriate for other purposes. Forward-looking statements in this announcement include, (but are not limited to) advancing certain key project activities that could represent important milestones which the Company expects may represent material valuation catalysts, such as the expectation that through theassembling of a portfolio of high-quality mining assets in
There has not been sufficient drilling and/or sufficient previous exploration at Las Huaquillas upon which to base a mineral resource or mineral reserve estimate compliant to the standards of National Instrument 43-101. It should be noted that the historical resource related information outlined has been derived from: NI 43-101 Technical Report (the “Technical Report”) on the Las Huaquillas Au, Ag, Cu Property,
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