Los Andes Project

Drilling Confirms High-Sulfidation System at Los Andes

Drill targets were identified based on surface rock chip geochemistry, alteration mineralogy, and fault structures which are associated with altered and mineralized breccia bodies. These surface features are interpreted to indicate leakage from mineralized hydrothermal cells at depth which are being targeted by the drilling program.

Drilling confirmed strong silicification with advanced argillic to argillic alteration with strong sulfide mineralization from the surface to at least 300 meters below the surface. The upper 80-125 meters is strongly oxidized, presenting an interesting shallow drill target for future drilling programs.

Phase 1 drilling is tested initial targets along the 17 kilometer long northerly trending mineralized structure on the Los Andes Property. The structure continues onto Caza's adjoining properties to the north and south and at least 14 gold target zones have been identified along the more than 25 km long zone.

Los Andes High Sulfidation Gold Property, Nicaragua

The Los Andes Property is located approximately 1 hour east of Managua on Highway 7 with excellent access. The property covers approximately 6,575 hectares and is strategically located within the Central Nicaragua Gold Belt between the El Limon and La Libertad Mines of B2 Gold.

The Los Andes property is a high-sulfidation style of gold mineralization.  High-sulfidation gold systems host some of the largest gold deposits in the world with examples such as Yanacocha and Pierina in Peru.  Favorable alteration and mineralization has been traced along the regional northeast trending Los Andes structure for at least 11 km on the Los Andes property.  The extensive alteration system is exposed on the surface and consists of very strong silicification associated with zoned alteration from higher temperature advanced argillic zones surrounded by successively lower temperature argillic, and propyllitic alteration.  The alteration is associated with anomalous values of gold, silver, and highly anomalous levels of indicator metals such as bismuth, tellurium, selenium, arsenic, antimony, and mercury. 

Los Andes Highlights

• Los Andes Project 6,575 hectares in Nicaragua is located in the Central Nicaragua Gold Belt between B2Gold's El Limon and Libertad Mines
  • The property hosts a very large high sulfidation gold system with more than 95 square kilometers of silicification, advanced argillic, and argillic alteration related to multiple volcanic caldera systems
  • Los Andes has alteration and geochemistry similar in composition and size to the Yanacocha and Pierina mines in Peru
  • The Los Andes 1st order northwest regional fault trend crosscut by 2nd order north –northeast fault system controlling 25+ km long altered and mineralized zone
  • Los Andes alteration is well zoned with a core of advanced argillic, zoning outward to argillic, and propyllitic alteration assemblages, strong silicification is common in all alteration zones.
  • Silicification commonly exhibits vuggy and sugary textures
  • Alteration is centered around large fault zones and more than 45 large breccia bodies
     
• Pedregal drill target is silicified breccia with advanced argillic and argillic alteration
  • Breccia outcrops are partially covered and may be at least 450 meters long
  • Silver values from nil to 196 gpt.
  • Anomalously high values of arsenic, bismuth, and antimony occur in the overlying argillic cap in an area at least 3 km long by 2 km wide, suggesting leakage from an underlying mineralized zone
     
• Quisaltepe drill target is 3 km long and main structure is 200-400 m wide
  •  Multiple breccia bodies with gold values from nil to 2.5 gpt
  • Quisaltepe zone has strong silicification, advanced argillic and argillic alteration
  • Highly anomalous values of gold, bismuth, tellurium, selenium

Detailed mapping and sampling of the los Andes property continues with more than 8,000 samples assayed and analyzed for alteration mineralogy to date.  At least 10 gold targets have been identified in the 11 km long Los Andes zone.  Two areas, Quisaltepe and Pedregal have been selected for the first round of drilling in 2012. Subsequent drilling programs will test other targets along the trend.  

Pedregal Target

Detailed geological mapping and rock chip and soil sampling (approximately 850 samples in the Pedregal area) have defined a strong silver anomaly in a silicified breccia along a cliff face, which is intermittently exposed for approximately 450 meters (m) long, disappearing under cover. The mineralized breccia is overlain by lower temperature argillic alteration. High silver values, up to 196.9 grams per tonne (gpt) in rock chip samples, are associated with advanced argillic, argillic, and strongly silicified zones in a breccia, typical of several high sulfidation epithermal gold deposits.

Pedregal is located at the margin of a large volcanic caldera, one of a series of volcanic calderas and high sulfidation epithermal alteration zones lying along a regional 1st order northwest-trending fault zone that defines the Central Gold Belt in Nicaragua. The highest silver values occur in the silicified breccia zone near north trending faults which cut the northwest trending fault zones. The mineralized breccia is beneath an extensive, weakly mineralized argillic cap which is more than 4 kilometers (km) long and at least 3 km wide, with an advanced argillic alteration zone which is at least 2.5 km long and 1 km wide. Smaller areas with higher temperature natroalunite are focused around north to northwest trending radial faults. Strongly anomalous arsenic, antimony, bismuth, and tellurium occur in the argillic cap and silicified breccias in the Pedregal area along with anomalous silver and gold. The alteration and metal concentrations possibly indicate leakage from mineralization deeper in the hydrothermal system.

Broad scale alteration and trace metal anomalies at Pedregal are zoned around 2nd order northeast- and north-trending cross-faults. The Pedregal, San Francisco and Quisaltepe drill targets are each located along a northeast-trending fault zone where it is cut by the northwest-trending faults . This mineralized fault zone is at least 25 km long and mapping continues to expand the system.

Quisaltepe Target
               
Detailed geological mapping and rock chip sampling (approximately 575 samples in the Quisaltepe area) have defined a strong gold anomaly over an area at least 3 kilometers (km) long and up to 400 meters (m) wide. Gold values up to 2.53 grams per tonne (gpt) in rock chip samples are associated with advanced argillic alteration and strongly silicified zones typical of high sulfidation epithermal gold deposits.

The highest gold values appear to be closely associated with the intersections of fault structures, possibly indicating leakage from mineralization deeper in the hydrothermal system. Quisaltepe is located at the margin of a large volcanic caldera, one of a series of volcanic calderas and high sulfidation epithermal alteration zones lying along a regional 1st order northwest-trending fault zone that defines the Central Gold Belt in Nicaragua.

Broad scale alteration and trace metal anomalies at Quisaltepe are zoned around 2nd order northeast- and north-trending cross-faults. The Quisaltepe, San Francisco and Pedregal drill targets are each located along a northeast-trending fault zone where it is cut by the northwest-trending faults.

Gold values are spatially associated with advanced argillic alteration and strong silicification in breccia bodies, large fault zones, and quartz monzonite dikes.  At least 25 breccia bodies have been mapped in the Quisaltepe area.   The Quisaltepe target area is at least 3 km long and the main caldera bounding ring fault structural zone is 200 to 400 meters wide.  Background gold values are less than 0.005 grams per tonne (gpt) but within the ring structure and cross-cutting faults values increase significantly and range from 0.025 to 2.5 gpt gold. 

A parallel target occurs approximately 1 km to the north of Quisaltepe on the lower ridgelines and hosts the 2.53 gpt rock chip sample.  This area has sporadic outcrops and several landslide deposits covering silicified breccia bodies.  Drilling is planned to test this structure zone as well.

Los Andes Geology

The geology of the Los Andes area consists of Miocene to Pliocene volcanic rocks related to at least four large calderas formed along a northwest trending belt. The volcanic sequence consists of andesite to dacite flows and volcanoclastic units with possible rhyolitic flows and tuffs.  Intense alteration has made identification of the original volcanic rock composition difficult in most areas. 

A prominent northeast trending fault zone cross-cuts the regional northwest faults and may control the formation of the large volcanic calderas, extensive breccia and diatreme formation, and  related alteration and mineralization systems.  The style of alteration is typical of a high sulfidation type gold system similar to several world class gold deposits such as Yanacocha and Pierina in Peru or the Pueblo Viejo property in the Dominican Republic.  High-sulfidation gold systems are characterized by extensive areas of silicification with zoned alteration from higher temperature advanced argillic alteration zones containing topaz, zunyite, diaspore, natroalunite, alunite, pyrophyllite, and dickite focused along major structures or near intrusive bodies.  Lower temperature argillic alteration forms a halo around the advanced argillic zones and consists of strong silicification typically with kaolinite and illite clays. An outermost propyllitic alteration zone consists of chlorite, epidote, and calcite in the volcanic rocks.  The los Andes area contains all the alteration zones typically identified in well developed, high-sulfidation gold systems.  Metal contents in the altered zones at los Andes are also typical of high-sulfidation systems and highly anomalous values of gold, silver, bismuth, tellurium, arsenic, mercury, molybdenum, selenium, and antimony are present throughout the 95 square km altered zone.

Surface Geochemical values for Los Andes and comparison with
Pueblo Viejo, Dominican Republic drilling results.

	Los Andes Maximum	Pueblo Viejo Maximum
Ag_ppm	196
As_ppm	>10000	655
Au_ppb	2528
Ba_ppm	2032	2340
Bi_ppm	73	20
Cu_ppm	2194	3180
Hg_ppm	15.9	4.2
Mo_ppm	1562	75
Pb_ppm	2058	1700
Sb_ppm	2558	23
Te ppm	230
Se_ppm	275	48.3
Zn_ppm	1516	940

The focus of the mapping program is to identify the most favorable gold targets for drill testing.  The key features geologists look for are a metal source, hot fluids to move it around, a physical process to deposit the gold, and multiple events which deposit gold. 

The process to deposit gold from hot or hydrothermal waters requires changes to the hot, metal bearing water.  As the hot water rises the gold can no longer remain dissolved if the pressure and/or temperature decreases, the pH or acidity of the fluid changes, or the fluid is diluted with groundwater, causing the gold to be deposited in the rocks.  The alteration minerals deposited with the gold, and other associated metals, give us indicators of where to drill.  One key feature to the precipitation of the gold from the hot water is a sudden pressure release, like popping the top on a bottle of soda. Opening the bottle releases the pressure allowing the bubbles to form and separate from the liquid.  That is what happens when big explosions take place during a volcanic eruption, there is a large and sudden release of pressure and metals can no longer stay dissolved in the hot water.  Usually when a big pressure release occurs the rocks are broken up in a volcanic explosion and form a breccia body.  The next thing we look for is if the breccia is altered indicating there was hot water related to the explosion.  The presence of minerals like quartz, alunite, pyrophyllite, and other clay minerals tell us the breccia was related to hot water explosions, it is not just broken rock.  The last piece of the puzzle is if the breccia bodies also contain metals, like gold, silver, copper, bismuth, or arsenic, and importantly the deposition of metals happened more than once.  The Los Andes property contains dozens of large breccia bodies along a zone which is several kilometers long.  All the breccias in the los Andes area have the features which indicate they were formed with hot, metal bearing fluids during very explosive and multiple volcanic eruptions.  Caza geologists are discovering additional breccia pipes, fault controlled breccias, and large silicified bodies beneath argillic caps, all related to hot water (hydrothermal to epithermal).  We are very encouraged by the large volumes of strongly altered rocks, which contain all the puzzle pieces we are searching for. 

View of Cerro Quisaltepec with series of silicified knobs along structure zone to NE (left). This view is approximately 7 km from left to right edge.

Closer view of Cerro Quisaltepec and silicifed knobs. I am standing on the silicified breccia zone with possible alunite and strong specular hematite in the clasts and matrix. The gold values at this outcrop the highest on the property to date.

Closer View of Cerro Quisaltepec. The silicified dome is at least 500 meters higher that the elevation where I am standing to take this picture.

Example of silicifed volcanic fragmental or breccia with hematite and specular hematite..

Breccia outcrop with larger silicifed and argillized volcanic clasts and specular hematite in the clasts and matrix.

Cerro Corral area. The view is about 1 km wide and the peak is about 250 meters above where I am standing. All the rocks in this area are strongly silicified and argillized.

Silicified and iron stained boulder in Cerro Corral area.

Silicifed and iron stained fragmental volcanic rock is Cerro Corral area. Matrix contains specular hematite.

El Pedregal area showing main silicifed knob and smaller silicified zones trending off to the NE (left). View is approximately 3 km long.

Closeup view of main silicified knob in El Pedregal area. Several strong ireon-stained zones were observed between light colored silicified knobs and ridges. Pyrite is reported in some of the silicified outcrops.

Brecciated volcanic rock with strong silicification and hematite.

Volcanic Breccia with specular hematite in matrix. Strong silicification and moderate argillic alteration.