Samco Gold Limited
TSX VENTURE : SGA

Samco Gold Limited

July 03, 2012 09:46 ET

Samco Gold Completes First Phase c.10,000m Drill Program on Main Veins Target of Its El Dorado Monserrat Project

TORONTO, ONTARIO--(Marketwire - July 3, 2012) - Samco Gold Limited (TSX VENTURE:SGA) ("Samco Gold" or the "Company") is pleased to announce the completion of its first phase drill program on the Monserrat Sector of its principal El Dorado Monserrat (EDM) project:

Inés Vein confirmed as a high priority target

  • Drilling, together with structural analysis carried out by consultant structural geologist, Dr. David Coller, has identified a series of local dilational vein segments along the principal structures of the Main Veins, notably Inés.

  • In total 64 diamond drill holes are now complete and assayed for a total of 10,640m across several targets in the Monserrat Sector, principally on the Main Veins.
    • 23 of the 38 holes completed since the last announcement are in the Inés structure, including:
    • 4.0m at 9.5g/t Au and 65g/t Ag from 106m (MVDDH0062) and 3.5m at 8.2 g/t Au and 82g/t Ag from 73m (MVDDH0041).

  • Three ore shoots have been identified on the Inés vein with the following characteristics (above a 5 g.m. Au equivalent cut off).
Shoot Max Strike
(m)
Av True
width
(m)
Av Au
(g/t)
Av Ag
(g/t)
Av Au
equiv.
(g/t)
No. of intersections/ Max depth
North 200 1.5 11.8 456 19.4 4/100m
Central 130 1.0 12.3 286 17.1 6/140m (open)
South 250 2.1 6.5 135 8.8 8/115m (open)
  • The South and Central shoots are open at depth and may consolidate into one structure.

  • Parallel structures have been intersected in the hanging wall of the Inés vein including (MVDDH039):
    • 2m of 5.4 g/t Au, 42 g/t Ag from 146m; and
    • 2m of 6.1 g/t Au, 84 g/t Ag from 160m.

  • In addition to these higher grade targets, wide zones of lower grade mineralization have been identified in the hanging wall of Inés.
    • Over 12 holes (excluding two outliers) the average grade (including internal waste) is 2.7 g/t Au, 110 g/t Ag (4.5 g/t Au equivalent) over 7.5 m downhole.

1. General

The first phase of drilling in the Monserrat Sector of the El Dorado Monserrat project (Figure 1) is now complete, and comprises 64 cored holes for a total of 10,640m. A further program of c.8,000 metres is shortly to be completed in the El Dorado sector, comprising the Herradura and Beethoven prospects, and will be announced separately.

Assays for all the Monserrat holes have been received, and new results since the Company's announcement on February 28, 2012, are listed in Table 1. All drill-hole collars have been accurately surveyed by differential GPS and their collar locations are shown on Figure 2.

2. Monserrat Main Veins

The Monserrat Main Veins target (Figure 2) is a composite structure with a general NNE trend, and is considered to comprise two veins: The southern vein, known as Inés, and a right-stepping offset to the north called Camila. Approximately 1 km west of the Main Veins, the Monserrat West vein (Figure 1) has been drilled by previous explorers. To date, the Company has drilled one hole, MVDDH012 (see release Feb 28, 2012) in that target. A low-lying area of poorly-explored veins and little outcrop between Monserrat West and the Main Veins is known as Bajo Pedernales. To date the Company has drilled seven holes in this area.

Table 1 lists intersections above a cut-off grade of 2 g/t Au equivalent obtained in these structures during the reporting period. (Gold equivalent is derived by adding 1/60 of the silver grade to the gold grade).

Table 1. Monserrat vein system, intersections above a 2 g/t Au equivalent cut-off grade (Since February 28, 2012) All widths are down-hole. To view Table 1, please visit the following link: http://media3.marketwire.com/docs/MonserratVeinSystem.pdf.

2.1. Camila vein

Recent holes mainly explored below ´historic' holes (i.e. those drilled by previous explorers) with high grades near the southern end of the vein, and returned generally low to moderate grades as shown in the table. A step-out hole, MVDDH061, drilled into the structure 500m north of the nearest existing Samco Gold hole, intersected 1m of 90 g/t Ag. There are few historic holes in the northern part of the vein, and results in these include 2.27m of 30.25 g/t Au, 25 g/t Ag and 1.36m of 3.18 g/t Au, 180 g/t Ag. The Company has obtained highly anomalous values in surface samples in the area, as reported in the February 28 announcement. The area requires additional drilling.

2.2. Inés vein

Figure 3 is a plan view of the Inés vein on the 150m level (about 80m below surface) and Figure 4 is a longitudinal vertical projection showing contoured values of gold equivalent grade x true width, using all Samco Gold holes drilled to date. These figures show three ore shoots, denoted North, Central and Southern shoots, separated by waste. The shoots broadly correspond to low topographic rises due to increased silicification or quartz content in the veins.

North shoot: Maximum strike extent is approximately 200m, and the shoot appears to bottom out at about 100m. One of the best Samco Gold intersections was in MVDDH006 (1.6m of 14.2 g/t Au, 2607 g/t Ag), announced previously. A historic hole, DDH 23ED, was reported to intersect 1.6m of 40.4 g/t Au, 871 g/t Ag, in the same area, and is included in the data.

Central shoot: Strike extent is about 130m and the deepest intersection, MVDDH023 (1.6m of 7.4 g/t Au, 84 g/t Ag), is at 140m depth. The shoot has a steep northerly plunge and is open in depth.

South shoot: The south shoot occurs in an area where the dip of the vein flattens to about 50°, and also where another vein, known as Virginia, branches off towards the south-east. The shoot seems to be about 250m long and the deepest intersection is in MVDDH062, at about 115m depth. The vein in this area shows consistent grades as well as good widths, as shown by MVDDH041 and MVDDH061 in Table 1. A previously announced hole, MVDDH011, also intersected the oreshoot with 0.9m of 15.6 g/t Au, 1304 g/t Ag. The Company has only drilled one hole, MVDDH036, on the structure south of the shoot. That hole intersected low grades (see Table 1), but the shoot is open in depth and the deepest intersection, MVDDH062, also recorded the best width and grade (4m of 9.5 g/t Au, 65 g/t Ag, Table 1, Figure 6). There is a possibility that the shoot could join the Central Shoot below the current limits of drilling.

If the 5 g.m. contour on Figure 4 is taken as an approximation to an 'economic' cutoff grade, the three shoots contain the average grades and widths shown in Table 2. It is stressed that these averages are based on very few drill intersections but serve to illustrate the need for more exploration.

Table 2. Average true widths and grades of Inés vein ore shoots

Shoot Max Strike
(m)
Av True width
(m)
Av Au
(g/t)
Av Ag
(g/t)
Av Au equiv.
(g/t)
No. of intersections/Max depth
North 200 1.5 11.8 456 19.4 4/100m
Central 130 1.0 12.3 286 17.1 6/140m (open)
South 250 2.1 6.5 135 8.8 8/115m (open)

2.3. Inés hanging wall

Two veins were intersected in the hanging wall of the Inés vein in MVDDH039 (Figure 5):

  • 2m of 5.4 g/t Au, 42 g/t Ag from 146m
  • 2m of 6.1 g/t Au, 84 g/t Ag from 160m.

The mineralization is open in depth and along strike. The up-dip projection of these veins is probably represented by narrow intersections in MVDDH023 (Figure 5). These intersections are: 0.5m of 0.4 g/t Au, 88 g/t Ag from 89, and 0.4m of 0.56 g/t Au, 403 g/t Ag from 97.7m.

3. Structural study

Structural geologist Dr. David Coller carried out a structural study of the Monserrat Main Vein system in May this year. He identified the Camila-Inés vein system as a NNE-trending sinistral fault in which mineralization also occurs in NW-trending extensional veins in the hanging wall. Ore shoots or wide zones of multiple veins develop at changes in dip and strike of the main structure. The vein kinematics are consistent with steeply north-plunging ore shoots as can be seen on Figure 4. Deeper exploration of these shoots and the wide, multi-vein structures is recommended.

4. Lower grade mineralization

Including the hanging wall splays of the Inés vein in the wide zones of multiple veins identified in the Coller report, it is possible to calculate relatively wide zones of lower grade mineralization. These are listed in Table 3, at a general cut off grade of 1 g/t Au (but including internal waste) and a minimum intersected width of 5m.

Table 3. Low-grade intersections, Inés vein

Hole Width (m) g/t Au g/t Ag g/t Au eq From
MVDDH006 5.00 5.1 894 20.0 82
MVDDH011 5.40 3.2 227 7.0 72.1
MVDDH017 5.20 0.9 90 2.4 241.6
MVDDH018 9.60 3.3 143 5.7 51.5
MVDDH021 6.90 3.5 23 3.9 93
MVDDH024 5.50 1.4 57 2.4 168
MVDDH039 16 1.7 20 2.0 146
MVDDH043 10 2.0 17 2.3 29
MVDDH046 9 1.8 48 2.6 127
MVDDH051 32.8 1.0 27 1.5 59.7
MVDDH051 6 1.8 67 2.9 128
MVDDH053 5 2.7 52 2.6 120
MVDDH058 5 1.4 74 2.6 41
MVDDH062 6.00 6.5 60 7.5 106

The weighted average of these intersections is 2.2 g/t Au, 88 g/t Ag (3.6 g/t Au equivalent) over 9.1m downhole width, heavily influenced by the wide intersection in MVDDH051. Excluding that hole and also excluding a deep isolated intersection in MVDDH017, the average is 2.7 g/t Au, 110 g/t Ag (4.5 g/t Au equivalent) over 7.5 m.

Next Steps

During the winter break, work will continue at EDM on the re-logging of historical (non-Samco Gold) core as well as the mapping and sampling of other targets identified in the Monserrat Zone.

Commenting on the recent results Paul Richardson, Chief Executive of Samco Gold said:

"The results of our first stage program on the Main Veins target are very encouraging and we have some exciting targets to follow up, particularly at Inés. Dave Coller's work has been very helpful in identifying key structural themes which underlie our strategy for future phases of drilling on this important target."

The exploration program is directed by Samco Gold's Senior Geologist, Lic. Eduardo Falloni advised by Mr. David Shatwell who is a Fellow of the Australian Institute of Geoscientists. Sr. Falloni has over 30 years' experience of exploration geology throughout Argentina including significant experience within the Deseado Massif. Mr. Shatwell is a Qualified Person within the meaning of Canadian National Instrument 43-101 and has reviewed and approved the above technical disclosure.

The above Au and Ag assays were performed on half-core by Alex Stewart Argentina S.A., using fire assay with atomic absorption finish on 50 gram pulp samples. Drill-hole locations are in Gauss-Kruger coordinates, using the Campo Inchauspe datum, and were acquired by hand-held GPS with an estimated accuracy of approximately 5m. Unless otherwise stated, intersections quoted in this release are down-hole widths, and are greater than true widths depending on vein and drill-hole geometries.

About Samco Gold Limited

Samco Gold's principal business is the acquisition, exploration and development of precious metals resource properties in Argentina. The Company's principal mineral property is the El Dorado Monserrat epithermal gold project, located in the Deseado Massif region of Santa Cruz Province, Argentina. The Company's goal is to become a producer of gold through the exploration and development of El Dorado Monserrat. Samco Gold also owns a portfolio of other mineral exploration properties in the Deseado Massif.

Additional details on the Company are available on SEDAR (www.sedar.com).

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements which can be identified by the use of words "commenced", "scheduled", "expect", "goal", and phrases or statements that certain actions, events or results "may", "would", or "will" be taken, occur or be achieved. Information concerning the interpretation of drill and other exploration results may also be considered forward-looking statements as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed.

Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the results of due diligence activities, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in Samco Gold's Prospectus dated June 27, 2011 filed and publicly available under the Company's profile on the SEDAR website at www.sedar.com. Although Samco Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not intend, and does not assume any obligations, to update forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by applicable securities laws.

FIGURES

To view Figure 1. El Dorado Monserrat project, location of principal targets, please visit the following link: http://media3.marketwire.com/docs/ElDoradoMonserratProject.pdf.

To view Figure 2. Monserrat area - Drill hole locations, please visit the following link: http://media3.marketwire.com/docs/MonserratArea.pdf.

To view Figure 3. Monserrat Main Vein system at 150m level (approx 80m below surface), please visit the following link: http://media3.marketwire.com/docs/MonserratVeinSystemLevel150m.pdf. See Figures 5 and 6 for cross sections.

To view Figure 4. Inés vein, longitudinal vertical projection looking west, showing Au equivalent x true width values and contours, please visit the following link: http://media3.marketwire.com/docs/InesVein.pdf. (Au equivalent = g/t Au +g/t Ag/60).

To veiw Figure 5. Cross section 7950N, Inés vein, looking north, please visit the following link: http://media3.marketwire.com/docs/CrossSection7950N.pdf. Drill-holes are projected max 12.5m onto section.

To view Figure 6. Cross section 7750N, looking north, please visit the following link: http://media3.marketwire.com/docs/CrossSection7950N-HoleDM21.pdf. (Hole DM21 was drilled by a previous explorer).

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.

Contact Information

  • Samco Gold Limited
    Paul Richardson
    Chief Executive Officer
    +44 20 7740 5791
    pr@samcogold.com