Overview
Gualcamayo is located in the San Juan Province of west-central Argentina and covers 48,870 hectares. Access and infrastructure are excellent with the main project area located 12 km off the main interprovincial highway (Hwy. 40). A permanent access road from Hwy. 40 to the project site has been constructed and the main San Juan power grid is located approximately 80 km from the site and ground water is available in sufficient quantity at the project.
The project is located in the Precordilleran range of Argentina, in a semi-arid climate with hot summers and mild mid-latitude, alpine winters. Precipitation is low, with very little snowfall; vegetation and wildlife are limited. The general project site lies at 2,000 metres elevation, facilitating year-round exploration.
Exploration has successfully identified three zones of gold mineralization. The main Quebrada del Diablo (“QDD”) zone currently contains a measured and indicated resource of 60.7 million tonnes of 0.98 g/t Au (1.92 million ounces) using a cutoff grade of 0.5 g/t Au. An additional 12.5 million tonnes of 1.25 g/t Au (504,000 ounces) are classified as inferred. The Amelia Inés zone, situated 600 meters to the northwest of QDD, is a high-grade skarn-hosted deposit containing a further measured and indicated resource of 2.1 million tonnes averaging 2.82 g/t Au (192,000 ounces) using a 0.5 g/t Au cutoff grade. The combined inferred resources for Amelia Inés and the adjacent Magdalena skarn zone amount to 2.9 million tonnes grading 1.88 g/t Au (176,000 ounces).
The Company now believes that these zones are part of one continuous system and ongoing exploration appears to verify this theory.
Since the November 2004 resource estimate, the Measured and Indicated resource at QDD has increased by approximately 56% from 1.24 million ounces of gold to 1.92 million ounces of gold using the same cut-off grade of 0.5 g/t Au. An additional 12.5 million tonnes of 1.25 g/t Au are classified as Inferred. Exploration continues to expand the QDD zone to the west and it is still open down dip and along strike.
Caption: Mineral Zone model for QDD Deposit
Image from Mineral Resource Update Gualcamayo Gold Project prepared by Ronald G. Simpson, P.Geo, GeoSim Services Inc. (September 12, 2006)
General Geology
Gold mineralization at QDD is generally hosted in stockwork fractured carbonates, carbonate breccias and intrusive breccias within or proximal to a porphyry intrusive complex. The system appears to be “Carlin” like and the exploration model continues to confirm this.
The main portion of QDD deposit is a broad continuous zone of limestone-marble breccia which appears to be fault bounded on the south side. To the east of this main zone, drilling confirmed the extension of a near surface, higher grade zone, called Portezuelo Blanco ("Ptz. Blanco"). This zone is of significant importance as it would likely be the initial zone mined in any future operations. The drilling to the west has confirmed the presence of what appears to be two separate zones, the upper and lower western extensions. The lower western extension has produced the highest and largest intercepts to date. The geological team now believes that this is the potential “feeder” zone. In order to further test this system, an exploration adit will be completed in the first quarter of 2007 which will provide better access to test both the down dip and strike extensions at this zone.
Resource Estimate
An independent resource estimate of the QDD, Amelia Inés and Magdalena zones at Gualcamayo was completed by Ronald. G. Simpson, P.Geo. of GeoSim Services Inc. in September, 2006. The estimate included all past drilling and Viceroy’s Phase One drill results, saw cut channel sampling, and Phase Two drill results.
The measured and indicated resource now totals 1.92 million ounces of gold, with a further inferred resource of 679,000 ounces. A summary of this work by zone and resource category is presented in the table below.
Current and Proposed Development
caption: QDD Pit Model
Since this study the Company has completed several additional engineering studies and testwork including:
- Detailed geotechnical studies for pit wall stability and waste dump stability
- Detailed geotechnical studies for leach pad design and operation
- Column leach testwork to determine optimum crush size and gold recovery parameters (see News Release #2006.17, dated July 24, 2006)
- Abrasion Index and work Index testing for crusher designs
The detailed feasibility study for the project is now under way, and is expected to be completed in Q2 2007. The process will be a standard two stage crushing to -1” followed by heap leaching and gold recovery by a standard Absorption, Desorption, Recovery (ADR) Plant.
Permitting and Construction
The baseline work for the Environmental Impact Statement (EIS) was completed in mid-2006 and the EIS document was submitted to the San Juan authorities in late 2006. In terms of the provincial law, the government now has 45 working days to review and determine whether a permit should be issued.
The Company is very confident that it will receive authorization within the required time frame and expects that construction will commence in mid-2007 with commission of the plant in mid-2008.
Social Responsibility
Since commencing exploration in late 2003, the Company has adopted a policy of strong integration and interaction within the local communities.
The three nearest communities to the property are (see map):
San Juan Province
- Huaco – a small community at less than 1,000 people located some 80 km from the site
- Jachal – a town of some 25, 000 people located approximately 120 km from the project
La Rioja
- Guandacol – a small town of approximately 5,000 located some 30 km from the project but outside of the provincial boundary
The Company has made an effort to buy and hire locally and this has been well recognized and appreciated. In fact, the Company recently received recognition as the “Most Socially Responsible and Best Environmental Managed” mining/exploration company in the Province”.
Several early “sustainable development” projects have commenced. Key amongst these are:
- Commencement of a small olive plant nursery to determine if the soil and elevation at the project can support an olive plantation. The Company owns several thousand hectares between the main road and the mine that appears suited to cultivate olives. Should this be so than this area will be developed as such
- Lime Stone and Lime Production.
The project area contains several areas which contain limestone for the type suitable for commercial production. With power at site and natural gas located in the neighboring province of La Rioja, the potential to produce commercial grade limestone and lime is excellent. The Company will continue to investigate this opportunity.