During the current period, the Company entered into an option agreement to acquire a 100 percent interest in the 703 hectare El Picacho property located 20 kilometers west of the San Francisco Mine. The Company also staked an additional 6,500 hectares encompassing the claims along the principal trend of the mineralization and now controls over 70,000 hectares either proximate to or surrounding the San Francisco Mine and the Sonora-Mojave Megashear.
El Picacho was acquired to assess the low grade, bulk tonnage potential of the property's known mineralization given the geological similarities and proximity to the Mine. Due diligence sampling by the Company on the property returned encouraging results with grades ranging from 0.50 g/t gold to 4.0 g/t gold over 1.0 meter and with several samples grading in excess of 12 g/t of gold over 1 meter. The highest grade sample returned 21.946 g/t gold over 0.90 meters.
The El Picacho property exhibits two distinct types of mineralization. The western portion of the property hosts mineralization very similar to that identified at the Company's nearby Mine. This mineralization consists of auriferous quartz veins hosted in a metamorphic complex consisting of gneiss, gabbro, schist and granite-gneiss. La Cornea, El Jabali and Virgen Maria are gold occurrences associated with the quartz veining in this metamorphic sequence. The Eastern portion of the property hosts Carlin type mineralization similar to that exposed in many of the past producing mines in the region. A contact between the metamorphic and sedimentary unit has been interpreted as a detachment zone created by thrusting in the region. The sediments consist of an alternating sequence of quartzite, sandstone, siltstone and limestone that host precious metal mineralization in both mantos and breccias that have developed along the stratification planes. Gold mineralization is found both in the limestone and in the sediments. El Murcielago and San Ramon are gold occurrences associated with this sequence.
