Rio Grande, Argentina

Overview

The Rio Grande Cu-Au-Ag-Mo porphyry project is located in the high Puna of NW Argentina, 450km west of the city of Salta. The project was discovered by Mansfield Minerals during regional prospecting in late 1999. The Rio Grande project is very favourably located along the prominent NW-trending Archibarca Lineament which also controls the location of the world-class Escondida porphyry Cu deposit (BHP-Billiton), a short 150 km to the west-northwest in Chile. The Rio Grande project shares many geologic similarities with the large Bajo de Alumbrera porphyry Cu-Au deposit (Xstrata Copper) which is located approximately 300km to the south, along a similar west-northwest trending regional structural lineament. Rio Grande is owned 100% by Regulus Resources.

The Rio Grande deposit is located approximately 80 km due south of the large Taca Taca porphyry Cu-Mo deposit (First Quantum Minerals), which has a reported Nl 43-101 compliant indicated mineral resource estimate of approximately 21.15 billion pounds of copper (9.6 million tonnes of copper) contained in 2.17 billion tonnes grading 0.44% copper, 0.08g/t gold and 0.013% molybdenum (0.57% copper equivalent) and an inferred mineral resource estimate of approximately 7.55 billion pounds of copper (3.4 million tonnes of copper) contained in 921 million tonnes grading 0.37% copper, 0.05g/t gold and 0.012% molybdenum (0.47% copper equivalent), using a 0.3% copper equivalent cut-off.

The Rio Grande deposit is located approximately 10 km west of the Lindero Au porphyry deposit, which has a reported NI 43-101 compliant Proven & Probable Mineral Reserve of 65.5 Mt @ 0.72 g/t Au (1,519,000 ounces of Au).

Cu-Au-Ag mineralization at Rio Grande occurs within a distinct 2-km diameter ring-shaped fracture zone defined by IP chargeability, as well as Cu- and Au-soil geochemical anomalies. Systematic surface trenching shows the majority of the ring structure is mineralized in several zones/targets; moving clockwise from the north these zones are (a) North, (b) Sofia, (c) Discovery, (d) Southwest, and (e) #7. Trenching and drilling in the central part also shows presence of mineralization. A total of 130 drill holes for 74,210 m of drilling have been completed at the Rio Grande project as of year 2014.

In upper parts of the system mineralization consists of partially oxidized chalcopyrite-magnetite hosted in fractures and breccia-infillings associated with variable degrees of K-feldspar, calc-silicate (diopside, actinolite), and secondary biotite alteration. Better mineralized intervals are typically associated with crackle breccia zones which locally grade into heterolithic milled-matrix breccias. In the hypogene environment mineralization consists of chalcopyrite ± pyrite ± magnetite, in veinlets, finely disseminated and also related to anhydrite veinlets.

Location

Access to the project from Salta, which is the principal economic center of the region, is by paved roads for 100 kilometers and by all-weather dirt roads for 350 kilometres along National Highway 51 and Provincial Highway 27, which extend from Salta to the Chilean border. Total travel time is approximately 8 hours. The access route is from Salta to San Antonio de Los Cobres on National Highway 51 (140 km), continuing to the small town of Tolar Grande on Provincial Highway 27 (210 km) and then traveling along an undesignated route to the Regulus Rio Grande Camp at Mina Arita (80 km).

The Rio Grande property occurs in the Altiplano of NW Argentina at elevations between 3,700 m and 4,700 m. Base levels of the salars in the area are approximately 3,700 m, with surrounding volcanic peaks to over 6,000 m. The nearest town with services is Tolar Grande located on Provincial Highway 27, 1.5 hours by road northeast of the Regulus Rio Grande camp.

The project has the following nearby infrastructure:

  • A narrow gauge railway extending to Antofagasta on the Chilean coast is located 100 km to the north.
  • A high tension power line extending between Salta and Chuquicamata Mine in Chile is located 120 km to the north.
  • The Jujuy Hombre Muerto gas pipeline is located 100 km to the east.

Rio Grande Location Map

Geology & Mineralization

The Rio Grande property is a large porphyry Cu-Au prospect with alkaline porphyry affinities. Mineralization covers a large area measuring at least 4 sq. km. and consists of disseminated and veinlet-controlled magnetite-chalcopyrite. Primary copper sulphides have been weathered to secondary, black and blue-green copper oxides to depths in excess of 200 m. A thorough review of work previously completed by Teck Corporation (“Teck”) in 2000-2001, as well as new geological and structural mapping by Regulus, has identified a series of target areas with potential for higher copper-gold grades within a distinct 2 km diameter ring of IP chargeability and anomalous surface and subsurface copper and gold geochemistry. The 200 m average estimated depth to the top of the IP anomalies together with drill hole information suggest that there is potential for an extensive area of oxidized mineralization that may be amenable to SX-EW recovery of copper.

The Rio Grande copper-gold prospect is located within a partially eroded, earliest Middle Miocene (16.5 Ma), andesite-dominated volcanic-intrusive complex of high-K, alkaline affinity. The Rio Grande complex intrudes through granitic basement rocks into a continental back-arc basin filled with a thick (>1500m), oxidized sequence of continental red bed sandstones. Sections within this sequence contain sulphate evaporites and possible halite in the upper parts of the section. Host rocks include a wide variety of dacite to andesite, sub-volcanic, hypabyssal intrusive rocks and dykes.

The Rio Grande complex is located along the regional ESE-trending Archibarca lineament; where it is intersected by NNE-trending “East Fissure” parallel structures. The faults vary from large, property-extensive structures to narrow, outcrop-specific structures. The character of the faults measured is quite variable, ranging from single, narrow fault surfaces to complex fault/fracture zones exhibiting gouge and broken rock. Structural mapping indicates there are two principal orientations of faults; a prominent ESE-trending set (“Archibarca Transverse Zone”) and lesser prominent NE-trending set (“East Fissure Fault Zone”), which together define the rhomb-shaped, annular (i.e. ring-like) geometry of the mineralization. The mineralized zones are steeply, inward-dipping (i.e., towards the centre of the Rio Grande complex).

The alteration developed in rocks from Rio Grande project is the result of extensive hydrothermal activity. Five (5) main alteration types have been identified, including:

  1. Potassic K-feldspar (PK),
  2. Calcic-Iron-Sodic (CaFeNa), (commonly diopside ± magnetite ± K-feldspar ± scapolite ± actinolite)
  3. Potassic Biotite (PB),
  4. Chloritic / Propylitic (CHL/PRO),
  5. Iron Oxide / Clay (FeOx / CLAY).

Zonation of the alteration is roughly concentric, with a strong to intensely altered central core area, where mainly intrusive subvolcanic rocks are located, grading outward to less altered rocks in the surrounding areas. Rocks in the outlying areas are dominated by intermediate volcanoclastic rocks and red bed sedimentary rocks which often exhibit clay and/or chloritic or weak propylitic alteration.

Near the core of the Rio Grande system, the rocks exhibit variable degrees of potassic, K-feldspar alteration. The innermost zone of the main igneous centre contains broad zones of moderate to intense calcic-iron-sodic (CaFeNa) alteration that commonly consists of variable amounts of diopside, magnetite, actinolite and scapolite. Also limited areas of potassic biotite altered rocks are more developed in the central area of the Rio Grande system.

Mineralization covers a large area measuring at least 4 sq. km. Four (4) distinct mineralization styles have been identified at the Rio Grande property:

  1. Near surface, fracture-controlled copper oxides ±sulphides (at depth) with gold
  2. Structurally controlled copper-gold style mineralization with Magnetite-Chalcopyrite-Pyrite-Magnetite, possibly related to deeper porphyry copper-gold style mineralization
  3. Copper-gold style mineralization with Chalcopyrite-Pyrite-Molybdenite associated with anhydrite veinlets, likely related to deeper porphyry copper-gold style mineralization
  4. Gold -Copper mineralization associated with quartz-magnetite stockworks in diorite intrusive rocks similar to the nearby Lindero deposit

Within the upper oxidized and mixed ore zones, the main copper-gold mineralization at Rio Grande occurs as fracture-controlled copper oxides and sulphides, which form an annular ring around the main zone of alteration. Mineralization occurs as blue-green and black copper oxides in the near surface environment (i.e., upper ~100-150 metres) and mixed oxides and sulphides in the deeper environment (i.e., below ~150 metres); both with associated gold.

The principal copper oxide minerals are chrysocolla, malachite, and traces of azurite. The principal sulphide minerals are chalcopyrite and pyrite, which are typically associated with magnetite. Chalcopyrite (with gold) occurs as coarse-grained clots, disseminations, stringers, and fracture-fillings. In the near surface environment the chalcopyrite is commonly oxidized to a dark brown coloured, translucent “copper limonite”, as well as chrysocolla and other blue-green and black oxides (i.e., Cu-bearing Mn-oxides and neoticite). Mineralization of minor quartz-magnetite sheeted veinlets which contain gold and little copper occurs in a satellite target named Cerro Cori, located approx. 2km NE from the main Rio Grande mineralized area. In addition to the mineralization described above, there are more classic, quartz-pyrite-magnetite veins and stockworks associated with K-feldspar alteration; which occur in the Southwest area.

Exploration History

1999: In June/July 1999, Mansfield Minerals Inc. prospected the Rio Grande area collecting 210 surface rock samples which defined and delineated a zone of Cu-Au mineralization. A simplified sketch alteration map was generated showing the different alteration types and exploration targets in the 2- by 2-kilometre area.

2000: In early 2000, Mansfield signed a joint venture agreement with Teck Corporation and the latter had the opportunity to earn a 55% interest and was the manager of the exploration project. In the following months Teck Corporation did geological mapping at different scales and additional surface rock samples were collected which defined new mineralized zones. An orientation soil survey was completed, some hand trenches were dug and channel samples collected along their length; these assays returned encouraging results.

2001: Quantec Geoscience Argentina conducted ground magnetic and Induced Polarization (IP) geophysical surveys. A trenching program was undertaken in order to test the Cu-Au anomalies generated by the soil sampling and prospecting programs. A diamond drilling program consisting of 11 holes, totalling 3,220.6 meters was completed. Additional work on the property was recommended; however, Teck terminated its exploration efforts in Argentina in early 2002, and returned the property to Mansfield Minerals Inc.

2004-2005: In June 2004, Mansfield Minerals Inc. and Planet Ventures Inc. (predecessor of Antares) signed a joint venture agreement in which Antares Minerals Inc., became the operator of exploration on the property. Antares began actively exploring the property in October 2004 and completed the first phase of this work in May 2005.

2005-2008: Antares completed a gradient array ground IP survey, extensive surface trenching and sampling, an enhanced topographic survey, and numerous additional drill holes.

2009: In early 2009, the Global Economic Crisis forced Antares to put the Rio Grande project on hold while it focused on its Haquira Cu-Mo-Au project in Peru.

2010: In October 2010, Antares announced that an offer had been made to acquire the company and in December 2010 Antares Minerals Inc. was officially sold to First Quantum Minerals for $CDN 650 million. At the same time, Antares then spun out the Rio Grande project along with $5 million in cash into a new company called Regulus Resources Inc.

2011: Regulus Resources Inc. completed an aggressive exploration program which included a Quantec Titan 24 geophysical survey (IP. DC and MT), 15,025 metres of drilling in 20 diamond drill holes, the first metallurgical work on the property and the first 43-101 complaint resource on the Rio Grande project. Regulus announces the discovery of a new high-grade Au-Cu mineralized zone in the Southwest Zone.

2012: Regulus Resources Inc. and its JV partner company Pachamama Resources Inc. consolidated the Rio Grande project ownership through a plan arrangement which merged the two companies. The merged company raised $CDN 27 million and conducted a 24,970 metre, 28 drill holes programme which focused primarily on a new high-grade discovery in the Southwest Zone. The company also completed a single drill hole on the edge of a large Au soil anomaly in the Cerro Cori area, which is located 2 km east of Rio Grande.

2013-2014: Regulus conducts a follow-up 1,200 metre, 4 drill hole campaign at Cerro Cori. During the second half of 2013, an extensive core re-logging campaign was initiated at Rio Grande, which included detailed geological descriptions for all 74,210 m drilled, extensive petrographic-staining work, integration of all geophysical information, development of an updated geological model, and definition of new drill targets.

Drilling

To-date (2001-2012), a total of 74,210 metres of drilling, in 130 drill holes, has been completed at the Rio Grande project. The location and collar information of each hole is presented in Table 1 and Figure 1. All of the significant drill hole intercepts (using a 0.2% CuT cut-off) are reported in Table 2a”“2e.

  • Figure 1: Rio Grande project drill hole location map. (Sep 23, 2014)
  • Table 1: Rio Grande drill hole collar information. (Sep 23, 2014)
  • Table 2a: All the Rio Grande significant drill hole intercepts (2001-2006)
  • Table 2b: All the Rio Grande significant drill hole intercepts (2007)
  • Table 2c: All the Rio Grande significant drill hole intercepts (2007-2008)
  • Table 2d: All the Rio Grande significant drill hole intercepts (2011)
  • Table 2e: All the Rio Grande significant drill hole intercepts (2012)

Rio Grande Drilling Location Map

Mineral Resource

An initial NI 43-101 resource estimate has been calculated on the basis on a total of 78 drill holes (33,015.47 m) and 11,294 m of surface trenches and includes all drilling on the project through to the end of 2008.

In 2011 Regulus hired Wardrop Engineering Inc., a Tetra Tech Company, who completed a 43-101 compliant resource containing gold (637,025 oz. indicated plus 1,002,458 oz. inferred), silver (7,787,342 oz. indicated plus 14,449,042 oz. inferred) and copper (416,240,000 lbs. indicated plus 674,405,000 lbs. inferred). This estimate does not include any results from additional drilling programs performed after 2008.

Table 1: Resource Highlights

Resource Class Cut-off
(% Cu Eq)*
Tonnes Cu
Grade (%)
Au
Grade (g/t)
Ag
Grade (g/t)
lbs
Cu (“000s)
Oz Au Oz Ag Cu Eq
Grade (%)
Indicated 0.4 55,257,862 0.342 0.359 4.38 416,240 637,025 7,787,342 0.576
Inferred 0.4 101,088,174 0.303 0.308 4.45 674,405 1,002,458 14,449,042 0.511

*Copper equivalent calculation uses $1,100/Oz Au, $3.00/lb Cu and $20.00/Oz Ag and is not adjusted for metallurgical recoveries as these remain uncertain. The formula to calculate Cu equivalent is Cu Eq = (Cu x 1) + (Au x 0.5437) + (Ag x 0.0097).