Pinos Altos

Pinos Altos


Phase: Operations
Mine Type: Pit, Underground
Gold Map

The Pinos Altos property is located in the municipality of Ocampo, in the state of Chihuahua, in northeast Mexico, approximately 220 kilometres west-southwest of the capital city of Chihuahua, 12 kilometres northwest of the town of Ocampo, the municipal centre, and 9 kilometres northwest the village of Cahuisori and nearby Basaseachic.

The Pinos Altos property is located in the Sierra Madre mountain range at relatively high altitude, reaching almost 2500 metres elevation above sea level (“a.s.l.”).

History:

According to Alvarez (1996), the Santo Niño vein was discovered by Juan Hernández in 1871. It was then acquired by an English mining company, Negociación Minera de Pinos Altos, which was responsible for the first gold rush in the district. From 1890 to 1904, the English company mined a small portion of the Santo Niño vein; work ceased in 1904 due to civil unrest and violence in this period just before the Mexican Revolution. During the period of 1890 to 1904, 18 levels were developed to a depth of 250 metres, along 500 metres of strike length. Ore was extracted via the Victoria adit and processed in the nearby stamp mills located at La Batería.

In 1904, the Santo Niño mine was sold to a North American company, but this company did not carry out any major work and the property was abandoned during the Mexican Revolution (1910-1917).

During the 1930s, a majority of the properties in the Pinos Altos area were acquired and explored by the company, Real Del Norte, however no mining of note was done and the company abandoned the property thereafter.

A second period of mining was led by Juan D. Morales from 1939 to 1958, who discovered the nearby Concheño mining district (approximately 10 kilometres east of Pinos Altos), working the upper level of the existing Santo Niño mine. A mill including a cyanide circuit was built in the vicinity of the present Pinos Altos Ranch site. This operation ceased in 1958.

During the period of 1960-1980, concessions covering the most interesting mineral occurrences in the Pinos Altos region were consolidated by Adelardo Pérez Campos into Minerales El Madroño S.A. de C.V. (“Madroño”), the lessor of the Madroño Concessions comprising the current Pinos Altos Property. Pérez Campos also built a 100-tonnes-per-day ore processing plant in order to work the concessions and also consolidated most of the surface rights on and around the current Pinos Altos property that were not already granted to the Ejidos by the government following the Mexican Revolution. These properties have remained, in terms of exploration, practically inactive since that time, except for small scale mining activities by Madroño and other artisan miners in the region.

In 1973, Peñoles completed four diamond drill holes on the eastern side of the Reyna de Plata zone (located 1.5 kilometres north of the Santo Niño vein structure) but later dropped its concessions following poor results.

In 1975, the Consejo de Recursos Minerales (CRM) established the area now covered by the Pinos Altos Concession, as a national mineral reserve (thereby restricting exploration in the region). The CRM drilled 9 diamond drill holes in 1991, sunk a shallow inclined shaft (45 metre deep) and completed some minor level developments (approximately 150 metres) on the San Eligio vein but the results were disappointing and work stopped.

In 1993, Peñoles completed a regional geological reconnaissance survey, during which the Santo Niño and Reyna de Plata veins were sampled (Flores 1993).

In 1995, Peñoles entered into an exploration and mineral lease agreement with Madroño for several important concessions covering a portion of the Pinos Altos Property.

The national mineral reserve was dissolved in 1997 and in 1998 mining title to the Pinos Altos Concession was acquired, by way of an auction from the CRM for more than $5.5 million (and a royalty), by Compania Minera La Parreña S.A. de C.V., a wholly owned subsidiary of Peñoles. The concession was then transferred to Madroño who included it in the Madroño Concession Block (leased by contract to Peñoles).

From 1995 to 2003, Peñoles further consolidated the district to form the current Pinos Altos property and undertook modern exploration. The main exploration activities by Peñoles during the period 1995 to 2003 consisted of:

In 2004, Peñoles completed additional rehabilitation work of the Santo Niño mine workings, namely the Victoria adit and the 1925 metre level, level 1 and level 6, in order to conduct additional channel sampling and geological mapping. A surface mapping and sampling program was also conducted on the Carola vein area in the northwest portion of the property. The results of the exploration program at Pinos Altos were not to Peñoles expectations, and the property was put up for sale in late 2004.

Elsewhere on the property in 1998, Minera Proaño S.A. de C.V. completed detailed mapping and sampling on the Carola concession. Apparently, attractive gold and silver values were reported from the Carola vein with thicknesses reaching 11 metres (Serrano and Herrǎn, 1997; in Castro et. al. 2003). Diamond drilling was planned but none was apparently reported.

In the first quarter of 2005, Agnico-Eagle entered into an exploration and option agreement with Peñoles to acquire the Pinos Altos property. The Company undertook a planned $2.8 million exploration program on the southeast portion of the property in order to expand the mineral resource associated along the Santo Niño fault zone.

In 2005, Agnico-Eagle completed approximately $4.0 million in exploration at Cerro Colorado, Santo Niño and Oberón de Weber zones, specifically:

In February 2006, the Company exercised the purchase option for consideration of $32.5 million in cash and 2,063,635 shares of the Company. The transaction closed in March, 2006.

In 2006, a $23 million exploration program was proposed consisting of resource conversion drilling (29,800 metres planned), resource exploration drilling on strike and at depth (21,400 metres planned), completion of a Feasibility Study by mid-2007, and a 1,330 metre exploration ramp at Santo Niño.

Since 2005, Agnico-Eagle Mines has drilled a total of 279 boreholes on Pinos Altos property yielding 50,707 metres.

Regional geology:

Sierra Madre Occidental province

The Sierra Madre Occidental (SMO) province, a regionally extensive Eocene to Miocene volcanic field, which extends southeast from the United States – Mexico border to central Mexico. The total thickness of the volcanic sequence is approximately 2 km, and it rests upon Mesozoic clastic and calcareous sedimentary rock. The volcanic field is comprised of two distinct volcanic sequences, an older andesitic and dacitic series, and a younger pyroclastic-dominated rhyolitic series. The traditional nomenclature refers to these as the Serie Volcanica Inferior (Lower Series) and Serie Volcanica Superior (Upper Series). The Lower Series is approximately 1 km thick and is dominated by Paleocene and Eocene andesitic lavas and pyroclastic deposits, with interbedded volcaniclastic strata. Silicic volcanic units are present but are a minor component. The volcanic strata of the Lower Series are cut by calc-alkaline intrusives. The Upper Series unconformably overlies the Lower Series with erosional disconformity, and comprises a 1-km-thick sequence dominated by Oligocene and early Miocene dacitic and rhyolitic pyroclastic strata and volcaniclastic strata. Most significant metal occurrences in the SMO are hosted by rocks of the Lower Series or the underlying Mesozoic strata.

Regional geology map, La India project

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