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Diablillos, Salta Province, Argentina

  • Diablillos Technical Report

Location and History

Diablillos is located 160 kilometers northwest of Salta on the altiplano of northern Argentina. The property is road accessible and is 250 kilometers south of Pirquitas. The recent announcement by the Province of Salta to construct a natural gas pipeline will benefit the project if the pipeline is extended to the southwest near Diablillos.

Discovered in the 1970's, the property was primarily explored from 1988 to 2001. Total expenditures by previous operators, in excess of US$17 million, resulted in the discovery of seven mineralized zones with the Oculto Zone, the largest, containing the reported resource. Exploration drilling completed by prior operators and Silver Standard totals in excess of 60,000 meters in over 300 rotary, reverse circulation and diamond drill holes.

Geology

The property is underlain by Late Miocene calc-alkaline volcanics and porphyry style intrusions that overlie Ordovician to Cambrian schists and gneisses. The Oculto Zone is an epithermal system with the silver mineralization structurally controlled in the volcanics and gold mineralization controlled by the contact between the volcanics and schists. Metallurgical testwork undertaken for Barrick Gold Corporation by Lakefield Research determined that conventional milling gave average recoveries above 75% for silver and ranged from 80% to 85% for gold.

Project Scope and Plans

During 2006, a geological review of the project determined that the previous reverse circulation drilling may have understated the gold and silver values. As a result, a 15,000 meter diamond drilling program is planned to begin in the second quarter of 2007. The drill program has been designed to investigate whether drill results obtained by the previous drilling campaigns understated values and also to test a number of gold targets separate from the Oculto Zone where a re-interpretation of the geology indicates potential for the discovery of new mineralization. On completion of the drill program, an updated resource estimate will be prepared followed by an update of the Barrick pre-feasibility study, which indicated that Diablillos could be developed as an open pit mine producing approximately 7.0 million ounces of silver and 70,000 ounces of gold per annum.

For details on resources of the Diablillos Project, view the current Resource Summary (312 kb pdf)