Azteca Gold Corp.

Azteca Gold Corp.

April 02, 2009 13:42 ET

Azteca Discovers Sullivan-Style Massive Sulfides at Two Mile

SPOKANE, WASHINGTON--(Marketwire - April 2, 2009) - Matthew Russell, President of Azteca Gold Corp. ("Azteca" or the "Company") (TSX VENTURE:AZG) announces drilling and geologic progress on the Company's 50% owned Two Mile Project near Osburn, Idaho in the historic Silver Valley.

"Azteca Gold has made tremendous progress in furthering our understanding of the mineralizing system responsible for the high grade massive-type zinc-silver-lead mineralization reported in mid-January at Two Mile in hole DDH-005A," said Mr. Russell. "Considerable additional data has been garnered since our initial discovery in the form of drilling, assays, thin sections and other studies, and these indicate that what we have intersected are Sullivan-type Precambrian massive sulfide beds forming a thick lens.

"Further, we believe that the massive sulfide beds discovered at Two Mile, while very similar in thickness to those at the Sullivan ore body, have much higher grades of zinc, silver and lead. They also contain additional metals including gold, copper, gallium, germanium, and indium. Finally, we believe these beds may represent at least a portion of the original source for all of the Silver Valley region's mineralization, a theory first postulated by the early Bunker Hill geologist O.H. Hershey in 1916," said Mr. Russell.

The Sullivan Mine in Kimberly, B.C.

Closed in 2001 after producing in excess of 130 million tonnes of ore at average grades of 6.9% lead, 5.1% zinc, and 67 grams per tonne (1.95 oz per ton) silver, if discovered today this world-class deposit would be worth several tens of billions of dollars at today's metals prices. The Sullivan is understood to be a Precambrian sub-sea hydrothermal system, perhaps a black smoker. The deposit occurred as broad, continuous and complex lenses in total approximately 2,000 meters in diameter and as much as 100 meters thick.

The upper layers of the Sullivan were relatively narrow (1-3 meters) sulfide beds inter-bedded with Aldridge mudstone and pyrrhotite. The lower or main zone (3-24 meters) was relatively massive pyrrhotite (up to 70%) within which were concentrated layers of sphalerite (zinc sulfide) and galena (lead sulfide).

Geologic Model: Pritchard-hosted Sullivan-type Massive Sulfide Beds

The Company believes the assay results and geologic study being conducted on holes DDH-005A, -005B, and -006 support Sullivan-type massive sulfides hosted in stratified quartzitic layers or beds within the upper 1/2 of the Prichard Precambrian mudstones, which are very similar to the Aldridge. The Company believes that the massive sulfides at Two Mile will be of much higher grade than the Sullivan because much of the pyrrhotite gange (iron sulfide) has stratified above the ore beds and thus does not dilute them as occurred at the Sullivan.

Geologist O.H. Hershey wrote of the Silver Valley mining district in 1916: "I submit that the facts point strongly to an origin of the lead and zinc in diffused mineralization in the sediments at some horizon above the Middle Prichard. My idea is that where the strata became greatly disturbed and highly tilted, the solutions set into active circulation by the monzonite intrusion dissolved minerals from the sediments and deposited them higher in the veins." Evidence of both bedded sulfides and adjacent stock-work type veining are present in all three holes DDH-005A, DDH-005B, and DDH-006, which may represent the "smoking gun" that proves Hershey's theory correct.

Drilling Update

"We have made tremendous progress with our diamond drill program, having now completed hole DDH-005A to a depth of 8784 FT, DDH-005B to a depth of 8657 FT. DDH-006 is currently at 7427 FT, nearing our main sulfide target depth at 8000 FT," said Mr. Russell.

Assay Results and Comparison to Sullivan

The Company believes the equivalent "main bed" of the Two Mile sulfide body was intersected in hole DDH-005A between 7937.6 FT and 7953 FT:

- 15.5 FT of 40.0% Zn, 7.4% Pb, and 5.0 oz Ag

A larger interval which would include adjacent high grade beds as well as the quartzitic inter-burden between them, runs from 7916 FT to 7953 FT:

- 37.0 FT of 18.0% Zn, 3.6% Pb, and 2.2 oz Ag

Comparing the Sullivan main sulfide zone and the Two Mile main sulfide zone, the grades are much higher in Two Mile because there is less inter-burden and significantly less pyrrhotite. Pyrrhotite is estimated to be no greater than 5% within the Two Mile main sulfide zone whereas it was as much as 70% in the Sullivan.

The Company believes it intersected a series of "upper beds" in both DDH-005A and DDH-005B. Like the Sullivan, these beds are considerably higher in the sulfide lens than the main sulfide bed of DDH-005A, making the Two Mile lens of sulfides similar in thickness to the 100 meters of the Sullivan deposit. For example, the total sulfide lens intercept thickness of DDH-005A could be assumed to be from 7643.5 FT to 7953 FT or approximately 310 FT. Currently the Company has only assayed enough of DDH-005B to determine a sulfide zone 165 FT in intercept thickness, and will assay the remainder of the assumed intercept soon. The Company wishes to emphasize that these upper beds are not being looked at as necessarily carrying ore-grade sulfides but rather initially the Company sees them as a strong indicator of high tenor sulfides fairly immediately below them in a "main sulfide zone."

Copper (Cu) seems to be a significant component in the intersected sulfides, as shown in "upper beds" in DDH-006 as well as in the "main bed" of DDH-005A as given below.

The Company believes preliminary sulfur (S) and copper (Cu) results as given below evidence a large mineralizing Sullivan type system with an "upper sulfide zone" of strong pyrrhotite with anomalous copper beginning at a depth of approximately 5300 FT and continuing down to a depth of approximately 5550 FT.

DDH-006 Upper Bed Assay Intercepts Include:

From(FT) To(FT) Interval(FT) S(%) Cu(g/tonne)
5291.5 5552 260.5 FT 1.98 177

Including Intervals:
5359.0 5362.0 3.0 11.90 469
5362.0 5364.5 2.5 12.90 546
5364.5 5367.0 2.5 5.63 421
5367.0 5369.5 2.5 3.88 215
5369.5 5372.0 2.5 6.53 488
5372.0 5374.5 2.5 4.73 559

The Company expected to intersect a "lower main sulfide zone" of high tenor silver, lead, zinc, and copper below this interval, but instead encountered the Black Cloud Fault. The Black Cloud Fault dips to the west at about 40 degrees and has a throw to the east of several thousand feet. This means the "upper sulfide zone" drilled into was in an up-faulted block, and that the targeted "lower sulfide zone" is likely in close proximity to DDH-006 several hundred feet to the west and several hundred feet down-dip on the fault. This represents a westward sulfide target extension beyond the 1 km between DDH-005 and DDH-006.

Azteca has set a new Target Depth for DDH-006 for approximately 8000 FT based on the prediction that this same Sullivan type mineralizing sequence would be encountered directly below the up-faulted block. The Company has encountered very similar strata as within the up-faulted block and at the current depth of 7427 FT is encountering strong pyrrhotite with visible chalcopyrite (copper sulfide) within a more quartzitic unit within the Prichard mudstones. In addition to Sullivan-type pyrrhotite beds, strong stock-work veining is being encountered.

"A block of the nearly full sequence containing the upper sulfide beds faulted off and got stacked up on top of itself," explained Mr. Russell. "Unfortunately, the portion of the upfaulted block we drilled through did not contain the expected high grade main sulfide beds. After the fault, the sequence started anew, and now it appears that we have come to the edge of a Sullivan-type sequence. Our target remains high grade massive sulfides," said Mr. Russell.

DDH-006 also intercepted a mineralized shear structure (a lead-silver-copper vein) in an upper quartzitic Prichard mudstone unit. The dip of the structure has yet to be definitively determined, but the Company believes it is a structure nearly parallel with the Two Mile fault dipping to the SSE at about 70 degrees. Because of the close proximity to the Harlow workings, the Company is calling the structure the Harlow Shear.

Harlow Shear Assay Intercepts Include:

From(FT) To(FT) Interval(FT) Pb(%) Zn(%) Cu(g/tonne) Ag(g/tonne)

3576.0 3592 16.0 0.479 0.0116 146 -

Including Intervals:
3582.0 3583.0 1.0 1.170 0.020 447 less than 2
3583.0 3584.0 1.0 1.390 0.024 720 15.3
3586.0 3587.0 1.0 1.390 0.019 70 4.1
3587.0 3588.0 1.0 2.760 0.052 150 5.0

There is also evidence of relatively high concentrations of copper and the high tech elements Indium (In), Gallium (Ga), and Germanium (Ge). These metals occur with sphalerite (zinc sulfide) and zinc, and seem to be of high tenor in the sulfide body. These high tech elements are used in semi-conductors and liquid crystal displays (LCDs).

DDH-005A: Au, In, Ga, Ge, and Cu Assay Intervals Include:

From To Interval Zn Au In Ga Ge Cu
(FT) (FT) (FT) (%) g/tonne g/tonne g/tonne g/tonne g/tonne
7937.6 7938.1 0.5 42.00 1.30 - 14.3 16.5 178
7938.1 7938.8 0.7 38.10 1.00 - 18.4 16.4 556
7938.8 7939.8 1.0 36.40 1.20 1.85 17.7 16.4 977
7939.8 7940.2 0.4 25.00 0.90 0.92 9.3 11.3 2200
7940.2 7942.5 2.3 25.80 1.10 - 15.4 15.4 363
7942.5 7943.4 0.9 55.40 0.05 - 37.9 32.7 462
7943.4 7946.0 2.6 50.50 0.03 4.52 20.1 23.2 279
7946.0 7946.2 0.2 36.70 0.03 - 32.6 26.1 109
7946.2 7946.5 0.3 55.90 0.02 3.20 37.1 33.2 43.9
7946.5 7946.7 0.2 14.19 0.01 - 9.5 8.05 1490
less than
7946.7 7946.9 0.2 0.62 0.01 - 7.5 5.0 2440
7946.9 7947.2 0.3 45.90 0.04 1.38 19.7 21.4 57.8
7947.2 7948.0 0.8 54.30 0.02 0.24 35.2 33.9 25.8
less than
7948.0 7949.4 1.4 44.90 0.005 - 24.0 25.9 85.3
less than
7949.4 7951.7 2.3 52.20 0.005 4.59 28.5 29.0 64.6
less than less than
7951.7 7953.0 1.3 11.36 0.005 - 7.8 5.0 611

"Although it requires deep drilling to reach these stratified sulfide beds within the Prichard sediments, we feel we have a much higher probability of intercepting these large, lens-like sulfide bodies compared to drilling targets of vein-style mineralization," Mr. Russell emphasized. "The depths are easily within the mineable horizon, and the potential grades are very exciting. One intriguing thought is that with the sniffs of gold we have found thus far, if Hershey's theory is correct and we have found the source for the region's mineralization, it follows that we may find the elusive source of the gold found in Murray, Idaho, which is located just to the NE of Two Mile."

Exploration Plan for Two Mile

Azteca Gold has two primary objectives in regards to exploring the Two Mile discovery:

- Define the size and lateral extent of the main sulfide beds, which are open for exploration in several directions.

- Development of a silver-gold-lead-zinc-copper mineral resource based on a Sullivan-type massive sulfide model over the approximately 1 km between DDH-005 and DDH-006 holes as well as any extensions discovered. Secondary targets such as the Harlow Shear (vein-type remobilization as Hershey predicted) intersected while drilling to depth for the Sullivan-type ore, as well as a westward extension of the sulfides found in DDH-006, will be assessed for their potential value to the overall mineral resource of the Two Mile Property.

The Company expects to complete DDH-006 to a TD of at least 8000 FT within the month of April with the expectation of intersecting a massive sulfide target much like that which was intercepted at a similar depth in hole DDH-005A. The Company plans to conduct down-hole geophysics which are intended to determine the continuity of sulfides over the 1km hole separation, which underlay it's private patented claim and large contiguous unpatented claim block. Also upon successful intersection of massive sulfide, the Company is looking at how the parent hole DDH-006 may be used to develop a mineral resource within the patented claim upon which DDH-006 is being drilled.

The Company is looking at an in-fill wedge-off hole DDH-005C to be wedged off of hole DDH-005B to begin in-fill drilling between DDH-005A and DDH-005B. Current separation of the two holes at the upper sulfide beds at about 7600 FT is 220 FT. At TD, DDH-005B is approximately 300 FT north of DDH-005A.

Assay and Interval Qualifications

Assays are uncut. True interval widths are not determinable at this time until oriented core techniques can be employed. Some irregular and short intervals were taken in the massive mineralization zones to facilitate mineral identification methodologies.

Quality Assurance and Assay Specifications

Diamond drill core samples were processed per the Company's quality assurance policy whereby chain of custody is controlled by Azteca technical personnel who transferred the samples directly to the assay lab. The assay lab has provided assay results to only those within Azteca's control pursuant to the list provided to them by Matt Russell. Assay results are preliminary and will be confirmed by the Company.

Assay methods include fire assay for Ag. ICP was used for lead and zinc followed by titration for high grade lead and zinc above 15%. Sulfur was determined gravimetrically.

The potential quantities and grades reported within this press release are conceptual in nature, being from limited diamond drill core data. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the delineation of a mineral resource.

The information contained in this news release has been reviewed and approved by Matthew Russell, President and CEO, the Company's Qualified Persons as defined in National Instrument 43-101.

WARNING: the Company relies upon litigation protection for "forward looking" statements. The information in this release may contain forward-looking information under applicable securities laws. This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, changes in laws or regulations, the risks of obtaining final approval from necessary regulatory bodies in connection with the Private Placement, inaccurate assumptions concerning the exploration for and development of mineral deposits and timing related to receipt of the preliminary assays. Readers are cautioned not to place undue reliance on this forward-looking information. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

Shares issued: 174,347,157

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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