With production of approximately 40 million ounces of gold and 2 billion ounces of silver over the last 400 years, the Sierra Madre Occidental Range has become an area of global focus and immense opportunity in the search for new precious metal deposits.
The El Jabali property is located only 6 km from Alamos Gold’s flagship Mulatos mine which, in 2010, reported reserves of 2.4 million ounces Au (proven + probable) and is one of the lowest cost heap-leach gold mines in the world. Gold mineralization at El Jabali is similar in habit to that found at the Mulatos Mine.
The property contains several past producing mines including La Dura and Zaragosa and is located only 2 km from La Juliana, which is also optioned by Urastar.
Current Exploration
Mapping and sampling work carried out in several programs in 2011 identified several significant targets in addition to the potential extension of the historic mineral zones in the La Dura Mine.
Urastar completed an 805m reverse circulation (RC) drill program in May 2012 with a total of 10 drill holes, 2 of which were abandoned and twinned in order to reach the target depth. The initial holes were drilled to test for extensions of mineralization to the north, north of the open pit, and south on the El Jabali Mine Trend.
While difficult ground conditions prevented half of the drill holes from reaching their target depth, only 2 of the 8 holes failed to intersect significant gold mineralization. The table below summarizes the results from the drill program.
Significant drill results
New assay highlights include:
North of the La Dura Mine
And
Mine trend south:
And
Preliminary exploration by Urastar has returned values from trace to 30g/t Au in grab samples. Native gold has also been identified in outcrop on the southern extension of the La Dura mine trend.
All drill samples from the La Jabali 2012 Stage I drilling program was analyzed at ALS Chemex, Hermosillo, Mexico utilizing a ICP41 41-element analytical package with AUAA23 Fire Assay finish for gold on all samples. Gold overlimits were reassayed with an AUGRAV21 finish and check assays were conducted with ACME Laboratories using a primary sample split from material stored at site. All RC samples were split on-site at the El Jabali drill sites and shipped to ALS Chemex, Hermosillo, Mexico where samples were sorted and crushed to appropriate particle size (pulp) and representatively split to a smaller size for shipment to ALS Chemex’s Vancouver analysis facility. A comprehensive system of standards, blanks and field duplicates was implemented in the 2012 exploration program (regional/diamond drilling) and is analyzed as chemical assay data becomes available.
Michael Collins, P.Geo,, is the Company’s qualified person with respect to the Company’s El Jabali and La Juliana projects, and has reviewed and approved this technical information.
Prior Exploration
In 1994, Francisco Gold Corp undertook a campaign of mapping, soil and rock geochemistry, geophysics, and drilling. This work shows the presence of large areas of silica altered and brecciated rhyodacite, with associated coincident gold, antimony, and lead geochemical anomalies.
Drilling consisted of 1,218 meters in 12 holes. The area of historic workings, anomalies, and gold showings is 1 kilometer in strike length.
History
El Jabali has produced gold from small scale operations since first being discovered by Jesuit priests in 1635.
Between 1990 and 2003, the property changed hands a number of times. Previous owners included Kennecott and Placer Dome.
In 2003, Alamos and National Gold merged to form Alamos Gold, Inc. (AGI). AGI, through its wholly owned Mexican subsidiary MON, owns 100% interest in the Salamandra Property. The Salamandra Property surrounds the El Jabali property, which in turn covers the La Dura satellite gold system.
In total, AGI’s Salamandra Property consists of the Mulatos deposit (145,000 – 160,000 oz gold production expected in 2011) and eight satellite gold systems known as El Halcon, La Yaqui, Los Bajios, El Jaspe, La Dura (covered by the El Jabali property), Cerro Pelon, El Victor/San Carlos and El Carricito.
Alamos Gold continues to very successfully explore and develop these additional gold resources throughout these claims.
The El Jabali property was acquired by lottery. An exploration program of rock chip sampling and limited drilling was done on the property prior to the lottery. Rock chip sample results from this program are significant with gold values ranging up to 27.7 g/T Au.
Location & Geology
El Jabali consists of a single exploration concession covering an area of approximately 70 hectares in east Sonora, Mexico. It is located 2 km south west of La Juliana which is also optioned by Urastar.
The property lies within the Sierra Madre Occidental Tertiary volcanic terrain and within the Mulatos mining district, which is part of the Sierra Madre gold belt.
Gold mineralization is hosted by fractured rhyodacites on the south side of a locally dominant rhyolite dome and is similar in habit to that found at the Mulatos Mine.
Alteration assemblages at Mulatos are typical of high sulfidation deposits, with zonation from distal propylitic alteration to illite to kaolinite to dickite/pyrophyllite to pervasive and vuggy silica alteration. Gold is predominantly hosted within silicic alteration. Gold mineralization controls are both structural and stratigraphic; structural zones control silica alteration and higher-grade gold concentrations, and secondary stratigraphic control is along flow boundaries and within coarse grained volcaniclastic fragmental units.
The La Dura (Jabali) hydrothermal system is contiguous with another prospect to the south that is described in the Alamos 2003 Annual report as Los Bajios:
“The Los Bajios area may be the central part of one large, regional hydrothermal system, with Halcon located in the western portion, La Dura to the north, and La Yaqui on the south as lateral, distal equivalents. The size of the airborne resistivity anomalies and extent of alteration indicates potential for at least one Mulatos-size deposit within the zone.”
District airborne resistivity response. Silicified areas show up as highly resistive anomalies, shown in red. (La Dura / El Jabali indicated by gold star.) All known gold and gold-copper occurrences are associated with resistivity anomalies. 2003 Alamos Annual report.
The El Jabali property covers a massive, cliff-forming, silica-hematite altered rhyolite. Massive to banded rhyolite is exposed in the area of mineralization, on cliffs to the east of the claim, and extending north and south of the claim.
Mineralization:
Mineralization on the El Jabali property is associated with iron-stained outcrops of silicified volcanic rocks. Mineralized areas are distinguished by yellowish limonite-jarosite or blood red hematite staining, vuggy silica or grey silicification, and zones of crackle breccia.
Cliff forming rhyolite on the El Jabali property. The view to the northeast at mid-cliff level shows strong blood red hematite stain.
The main mineralized zone is marked by a glory hole that exposes highly fractured and jarosite-stained silicified and brecciated rhyolite. An adit located just south and downhill from the glory hole leads to a honeycomb of old underground mine workings. Several fault and fault breccia structures are evident in the underground exposures.
Gold was observed during the site examination just west of the old mine. The gold is very fine and occurs on fractures in a vuggy silica altered rhyolite. There are also physical remains of a crude slucing operation which indicates that free gold is present.
Alteration and gold occurrences
Financial
In a signed Definitive Agreement, Urastar can earn 100% interest in the El Jabali Gold Project by making the following option payments over a 5 year period.
In addition, underlying owners will retain a 3% NSR royalty on the Property, subject to the right of Urastar to purchase each 1% of the NSR (namely a 1% NSR) for $1,000,000.00, for five years after signing. The Letter of Intent (LOI) is subject to TSX Venture Exchange approval.
Payment schedule in USD:
$10,000.00 on signing LOI
$50,000.00 on or before November 30, 2011
$40,000.00 on or before December 31, 2011
120,000 common shares upon approval of this agreement by the RSX Venture Exchange
$75,000.00 on or before November 30, 2012
$150,000.00 on or before November 30, 2013
$200,000.00 on or before November 30, 2014
$1,450,000.00 on or before November 30, 2015
Total: $1,975,000.00 and 120,000 common shares