Puchuldiza, Chile

• Overview
• Location
• Geology & Mineralization
• Exploration History
• Drilling
• Mineral Resource
• Technical Reports
• Gallery

Overview

• 100%-owned, 6,349-hectare concession (1.5% NSR to Coeur)
• 230 km NW of Iquique in Comuna de  Colchane, Tamarugal Province, Region I  Chile
• Deposit Type:
  The Puchuldiza Project belongs to a class of gold deposits called “hot spring gold deposits” as defined by Robert and others (1997). The most famous deposit of this type is at McLaughlin, CA, USA, where approximately 27 million tonnes of 4.49 g/t gold (3.5 million troy ounces) were mined and recovered through 1997- 98. Other examples are Hasbrouk Mountain and Buckskin Mountain (Nevada), Cherry Hill and Champagne Pool (New Zealand) and Cinola (BC, Canada). Additional hot spring gold deposits that still have active geothermal systems are the Ladolam gold deposit (Papua New Guinea), the Benget deposit (Philippines),  and the Hishikari deposit (Japan).
• Average Elevation: 4,200 metres
• Infrastructure: Accessible by paved road
• Closest Mining Prospect: Choquelimpie ““ 140 km to the north ““ inactive precious metals prospect with a historical resource of 3 Moz of gold.
• Strike Length of Mineralization 650 m x 200 m
• Weather:
  • December to April Rainy
  • May to November Cold and Dry

Location

Location

The Puchuldiza Project is located in the high Andean Plateau (Puna) of northernmost Chile (Figure 1), close to the Bolivian border at an altitude 3,800 to 4,200 meters above sea level. Central UTM coordinates of the property are 7,854,000 North and 504,500 East. The project lies approximately 230 kilometres NW from the port city of Iquique, capital city of the region, and 18 kilometres west of the small Chile border town of Colchane. Access to the area is via good paved roads that join Iquique through Huara with the village of Colchane.

Geology & Mineralization

Mineralization is related to a low sulphidation epithermal system developed in acidic to intermediate volcanic and volcanoclastic rocks of Upper Tertiary to Quaternary age (Figure 2). Alteration is extensive in the area, consisting of a central silicified nucleus, represented by the sinter and underlying silica replacements, surrounded by an extensive halo of argillic alteration, characterized by a low temperature assemblage of illite and/or illite-smectite, and an external zone of chloritic alteration grading to fresh rocks. Solfataric alteration, related to a Quaternary volcanic centre, is extensive in the higher parts of the zone.

Gold mineralization coincides with a complex system of veins, veinlets, breccias, stockworks, and hydro-fractures that generate sub-horizontal bodies hosted in the sinter and in the underlying breccias and basement volcanic rocks, and also in restricted sub-vertical vents, both intimately related to the silicic alteration. These bodies consist of fine bands of opal and chalcedony, with disseminations, bands, and veinlets of pyrite, marcasite, arsenopyrite, occasional free gold, stibnite, native antimony, cinnabar, orpiment and realgar.

Exploration History

1968-1981: The Chilean Geothermal Committee, a government agency, with the assistance of the Japan International Cooperation Agency (“JICA”) initiated exploration activities aimed at evaluating the geothermal potential of the area. They actively explored the area until 1981 and conducted geological mapping, geochemistry, geo-thermometry and drilled 6 geothermal holes down to a maximum depth of 1,147 meters. Results were not conclusive and the project was abandoned.

1990’s: Early in 1990, Coeur d’Alene Exploration (CDE) acquired the mining rights from Freeport Chile, who had started precious metal exploration in the area. Freeport completed surface geological mapping and a 25 x 30 meter rock geochemical grid over the sinter (samples assayed for Au, Ag, Cu, Mo, As, Sb, Hg, Tl, and Ba). CDE continued the exploration activities with:

• Additional mapping and geochemical sampling
• IP-Resistivity survey over the geochemical anomaly
• 1,722 meters of diamond drilling in 18 RC holes sampled for Au, Ag, Cu, Mo, As, Sb, Hg, Tl, and Ba
• Petrographic studies in transparent and polished sections of surface and core samples
• Laboratory scale metallurgical tests, including conventional cyanide leaching, pressure oxidation, bi-oxidation, high-pressure grinding, and roasting, and a
• Preliminary geological resources estimate.

2001: In November 2001, CDE optioned the project to Barrick Chile whereby Barrick committed to spend a minimum of US$2,250,000 in exploration activities within a period of five years in exchange for a 75% interest in the project.

2002-2006: Barrick Chile explored the project and completed:

• Geological mapping
• Geochemistry, including PH soil analysis, talus fines, soil gas hydrocarbons and Terrasol analysis, and stream sediment analysis
• PIMA spectral surveys and geochronology
• Selective chip sampling and channel sampling
• Geophysics including ground magnetic, gravity, and IP surveys
• 4,375 meters of diamond drilling in 17 holes sampled for Au, Ag and 35 additional elements
• Geological modeling and an
• Inferred resource estimate

2007: In May 2007, Coeur and Barrick agreed on an extension of the option until November 2008. The extension was granted in return for fulfillment by Barrick of US$250,000 in pending expenditures committed for the 2001 – 2006 period and for fulfillment of additional expenditures of US$200,000 in exploration in the property. By the end of the extension period Barrick had not met the committed expenditures and was thus officially notified by Coeur of the expiration of the option.

2010: In a public deed dated May 14, 2010, that was signed, before the Notary Public, Mar­a Achar¡n Toledo, repertoire N° 13.921, between Coeur South America, Chile Agency; and Minera Southern Legacy Chile Limitada and Southern Legacy Minerals Inc., an unilateral option to purchase agreement whereby Coeur irrevocably offered to sell to MSL the claims and all of the rights inherent to them. In order to earn a 100%-ownership, Minera Southern Legacy Limitada paid Coeur South America US$1,500,000 plus 500,000 shares of SLM common stock.

2011: In May 2011, a NI 43-101 compliant resource estimate by Sociedad Cartografica Limitada (“Cartografica”) was completed indicating an inferred resource of 686,000 oz of Au at a grade of 0.71 g/t in 30.07 Mt (using a 0.5 g/t cut-off).

2014: In October 2014, Southern Legacy Minerals was amalgamated into Regulus Resources Inc.

Drilling

• A total of 6,097 metres in 35 core holes (Figure 2) were drilled at the project in 1992 by Chilean Mining Corporation (“CDE”) and 2003-2004 by Compa±ia Minera Barrick Ltda (“Barrick”).
• Average grades close to 1.0 g/t (up to 136 m @ 0.91 g/t ; 114 m @ 0.94 g/t; and 78 m at 1.30 g/t Au)
• Restricted higher-grade zones (up to 36 m @ 2.16 g/t Au; 21 m @ 3.14 g/t; and 7.0 m @ 3.90 g/t Au) were identified, mostly underneath the sinter, but close to surface. Hg, Sb, As contents are variable and not necessarily correlated with gold grades.
• Historical and preliminary metallurgical testing by CDE (not NI 43-101 compliant) suggests recoveries around 90% of gold may be achieved by high pressure grinding and roasting.

Mineral Resource

On November 7, 2011 Southern Legacy Minerals completed the following NI 43-101 compliant technical report at the Puchuldiza Project.  The resource estimate was completed by Antony J. Amberg of Sociedad Cartografica Limitada.  The 43-101 estimate is based on 6,097 metres in 35 core drill holes.

• As at November 7, 2011, the initial NI 43-101 compliant resource estimate, is based on a cut-off grade of 0.5 g/t Au
• The Project hosts 686,000 ounces of gold in the inferred category (30Mt @ 0.71 g/t Au)

Table 1: Resource Highlights

Technical Reports

2011 Puchuldiza 43-101 Technical Report

Gallery