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Success continues for Torex at Media Luna

Magnetic anomalies are only just that – magnetic anomalies. They are not gold deposits. However, Media Luna appears to be one of those rare cases where a magnetic anomaly points to where the gold is.

Disclaimer: This is an editorial review of a public press release and may include opinions or points of view that may not be shared by the owners of geologyforinvestors.com or the companies mentioned in the release. The editorial comments are highlighted so as to be easily separated from the release text.  Please view the full release here.

TORONTO, ONTARIO–(Marketwired – Sept. 23, 2013) – Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX:TXG)(TXG.WT.A) is pleased to report that results of its new exploration drilling program intercepted high grade Au-Ag-Cu mineralization over significant widths, beyond the recently published Media Luna Inferred Resource. Highlighted intercepts in Media Luna, but outside of the resource area, include 12.96 g/t Au Eq. over 10.8m in borehole NWZML-05 and 10.26 g/t Au Eq. over 6.6m in borehole NWZML-01B. In Media Luna West, significant intercepts include 9.81 g/t Au Eq. over 4.8m in borehole MLW-22 and 4.40 g/t Au Eq. over 14.9m in borehole MLW-03A. In the La Fe area, approximately 2 km northwest of the Media Luna resource area, reconnaissance borehole SS-07 intercepted 3.96 g/t Au Eq. over 6.1m.

Media Luna is in the emerging Guerrero Gold Belt of Mexico. Below we’ve provided a map for locating the deposit.
Location of Torex's concession and Media Luna within the Guerrero Gold Belt, Mexico

Location of Torex’s concession and Media Luna within the Guerrero Gold Belt, Mexico

In addition, a recent magnetic survey completed over the entire property, suggests a 26% increase in the area of the three magnetic anomalies in the Media Luna Area (498 ha to 630 ha). Interpreted in the ‘new’ magnetic area is a connection between the Media Luna West anomaly and the northwestern ‘lobe’ of the Media Luna anomaly. The same survey reveals several other magnetic anomalies both north and south of the Balsas River, which are currently being evaluated by the exploration team.

Magnetic anomalies are only just that – magnetic anomalies. They are not gold deposits. However, Media Luna appears to be one of those rare cases where a magnetic anomaly points to where the gold is.

Aeromagnetics or ground magnetics can show the underlying structure of the rock due to variations in the abundance of the magnetic minerals magnetite and pyrrhotite. Knowing the structure of the rocks can help geologists identify potential sites for gold deposition. At Media Luna the gold mineralization appears to correlate well with the magnetic anomalism. A magnetite-bearing skarn, which hosts the gold, encases a granodiorite intrusion. Because the skarn is magnetic the most probable sites for gold mineralization can be identified in the aeromagnetic images and drilled. With each success comes more confidence, enabling Torex to add more gold to their inferred resource. Below is an aeromagnetic image showing the magnetic anomalies that Torex is chasing relative to the current Media Luna resource area. A cross-section showing the drillholes intersecting the skarn mineralization at Media Luna is also shown.

Magnetic anomalies at Media Luna and the current resource area

Magnetic anomalies at Media Luna and the current resource area

Cross-section showing drill hole traces intersecting the skarn mineralization at Media Luna

Cross-section showing drill hole traces intersecting the skarn mineralization at Media Luna

Fred Stanford, President & CEO of Torex stated: “The gold potential ‘south of the river’ continues to be very prospective and encouraging. We look forward to drill testing the interpreted magnetic connection between Media Luna West and Media Luna and to understanding the potential that it might offer. Todos Santos, the third magnetic anomaly in the Media Luna Area, also shows significant promise. We are pushing a road down to the first Todos Santos drill platform and anticipate the start of drilling before year end.” He added, “A great deal more work is required to fully understand the nature and overall potential of the entire 29,000 ha of the claim area. The expansion of the footprint of the Media Luna Area magnetic anomalies to 630 ha means that the recently released resource covers only 24% of the interpreted magnetic area. In addition, the resources also occur over an additional 30 ha in an area outside of the main magnetic anomaly. In the Media Luna Area, magnetism can indicate potential mineralization, but a lack of magnetism does not necessarily indicate a lack of mineralization. We look forward to the continuing efforts to fully evaluate the many untested targets, both north and south of the river.”

The current inferred gold resource at Media Luna is 5.84 million gold equivalent ounces. If success continues with drill testing all the magnetic anomalies, Torex could be looking at a mammoth 20+ million Au (eq) ounce inferred resource in the future.

Highlights of exploration drilling at Media Luna

Intersection
BH I.D. From To Core
Length
Au Ag Cu Au
equivalent
Lithology
(m) (m) (m) (g/t) (g/t) (%) (g/t)
NWZML-05 551.72 562.50 10.78 12.40 13.90 0.20 12.96 Skarn
NWZML-06 770.95 781.61 10.66 3.98 46.57 1.05 6.43 Skarn
NWZML-01B 465.46 472.07 6.61 0.42 227.68 3.74 10.26 Skarn
MLW-22 568.31 573.14 4.83 1.13 96.26 4.49 9.81 Skarn
MLW-03A 808.62 812.69 4.07 7.74 6.46 0.27 8.28 Skarn
MLW-18 724.59 728.29 3.70 6.95 2.56 0.05 7.07 Skarn
SS-07 221.30 227.38 6.08 3.59 20.35 0.01 3.96 Breccia
Notes:
True thickness of the mineralized zone is unknown and is reported as drill hole length
The gold equivalent grade, including copper and silver values, is based on 100% metal recoveries. The gold grade equivalent calculation used is as follows: Au g/t (EQ) = Au g/t + (Cu grade x ((Cu price per lb/Au price per oz) x 0.06857 lbs per oz x 10000 g per%)) + (Ag grade x (Ag price per oz/Au price per oz)). The metal prices used were: Gold – $1495/oz, Copper – $3.39/lb, Silver – $26.45/oz

 

Here are two standard disclaimers that are worth paying attention to. The first one is a statement about the true thickness. Torex hasn’t even provided an estimate of the true thickness so you can be assured that the true thickness will be less than than the “core length”. Then they go onto say that the gold equivalent grade is based on 100% metal recoveries. Any metallurgist will tell you there will be losses in the processing circuit. The job of a metallurgist is to minimize these losses. Any metallurgist who can achieve a 100% recovery on the metal content of the ore would be worshipped like a god! Also, be careful when relying on the metal prices for the gold equivalent calculations. These prices are of course continually fluctuating on a day-to-day basis. For example, on the day we wrote this review (26 September 2013) the gold price was US$1324/oz, silver US$21.73/oz and copper US$3.28/lb.

Please refer to Table 1 for a complete list and expanded description of the borehole intercepts reported in this press release. Refer to Figures 1 and 2 for new magnetic anomalies identified with recently completed survey and to Figures 3 and 4 for borehole locations.

A ZTEM and magnetic survey covering 1,620 line-kilometers was completed over the Torex concession. Initial results from the magnetic survey reveal notably different shapes for the main magnetic anomalies in the Media Luna Area (see Figure 2). Of particular note is an expansion of the main Media Luna anomaly to the northeast and the appearance of a connection between the Media Luna West anomaly and the NW extension of Media Luna. The Todos Santos anomaly also has a slightly different shape. The cause of the differences between the new magnetic and the previous (year 2000) magnetic data is not known. The changes in the shapes may result from surveying using a different line direction, lower magnetic sensor height and better line control using a helicopter. The ZTEM data highlights resistivity contrast within the local rock packages and will be particularly useful to define rock contacts and vertical structures that may have been conduits for mineralizing fluids. Both the ZTEM and magnetic data are being used to create 3D inversion models that will support detailed targeting within prospective areas.

ZTEM is Geotech’s proprietary airborne geophysical method. ZTEM is operated in a similar manner to the more well known VTEM system. Rather than inducing an electromagnetic field (EM) field the way that a VTEM transmitter does, the ZTEM (Z-Axis Tipper Electromagnetic) system uses the naturally occurring EM fields from worldwide thunderstorm activity as the source of transmitted energy.

Exploration on the magnetic anomaly lobe that extends NW from the Media Luna Inferred Resource area is aimed at completing wide-spaced drill testing of the magnetic anomaly. New roads are under construction toward the north of the Media Luna Resource Area to access this topographically challenging target. Mineralization encountered in drilling to date in the NW area is similar in character to Media Luna.

Ten drill holes have been completed at Media Luna West. The drilling defines an area with current dimensions of approximately 500m x 700m that contains strong Au-Ag-Cu mineralization associated with magnetite-pyrrhotite-bearing exoskarn alteration. The mineralization is similar in nature to Media Luna. The large zone of magnetic anomalism between Media Luna West and the NW zone has yet to be drill-tested (see Figures 2 and 3).

Four exploration drill holes were also completed in the La Fe target area, located approximately 2 km northwest of the Media Luna resource area. These holes targeted the limestone-granodiorite contact zone in areas of smaller magnetic anomalies. Three of the four wide-spaced holes encountered significant Au-Ag-Cu mineralization associated with magnetite-pyrhotite-bearing exoskarn. The fourth hole intersected a post-mineral intrusive dike at the contact.

The focus of ongoing exploration will be to continue wide-spaced drilling at Media Luna West and NW Media Luna and to test the zone of magnetism that connects these 2 areas. In addition, reconnaissance drilling will test Todos Santos and other magnetic anomalies in the area.

The potential quantity and grade of the exploration targets are conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

It is a little puzzling why Torex ended on such a negative note with this disclaimer, down playing their exploration targets after beefing up their potential earlier in the press release. I guess they are just covering themselves in case their exploration model falls in a heap with further drilling.

QA/QC and Qualified Person

At the Morelos Gold Project, all of the Media Luna target analytical work is performed by SGS de Mexico S.A. de C.V. (“SGS”) in Mexico and/or Acme Analytical Laboratories Mexico S.A. de C.V. (“ACME”).

Sample preparation is done at a dedicated sample preparation laboratory operated by SGS at the project site in Nuevo Balsas, Guerrero, Mexico, and/or at a dedicated sample preparation laboratory operated by ACME at Guadalajara, Mexico. The gold analyses (fire assay with an atomic absorption or gravimetric finish) and multi-element geochemical analyses are completed at an analytical laboratory operated by SGS at the project site in Nuevo Balsas, Guerrero, Mexico and at their analytical facilities in Vancouver, British Columbia, Canada, respectively. The gold analyses (fire assay with an atomic absorption or gravimetric finish) and multi-element geochemical analyses are completed by ACME at their analytical facilities Vancouver, British Columbia, Canada.

The Company has a Quality Assurance/Quality Control (“QA/QC”) program in place that includes 2% of each of the certified reference materials, blanks, field duplicates and preparation duplicates for the grassroots exploration drilling program, with the objective of the QA/QC program to ensure the batch to batch relative bias remains constant and that absolute accuracy at anomalous to near cut-off grades is measured and acceptable. The QA/QC program as designed has been approved by AMEC and is currently overseen by Cristian Puentes, Chief Exploration Geologist for the Morelos Gold Project.

In the above paragraph is Torex’s QA/QC statement. For some background on the reasoning behind QA/QC programs read our article.

The scientific and technical data contained in this news release pertaining to the Morelos Project has been reviewed and approved by Mr. Barton Suchomel as a Qualified Person under NI 43-101. Mr. Suchomel is a Fellow of the Australasian Institute of Mining and Metallurgy and has experience relevant to the style of mineralization under consideration. Mr. Suchomel consents to the inclusion in this release of said data in the form and context in which it appears.

Torex is a growth-oriented, Canadian-based resource company engaged in the exploration and development of its 100% owned Morelos Gold Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located 180 kilometres southwest of Mexico City. Within this property, Torex has two projects: the El Limon and Guajes Project, currently under development, and the Media Luna Project, at an advanced stage of exploration. Torex intends to identify a pipeline of future economic deposits within its property, which remains 75% unexplored.

We've skipped some of the boilerplate. You can read it in here.

We've skipped some of the boilerplate. You can read it in here.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the initial drill program at the Company’s Media Luna target and the results of the program contained herein. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates” or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including those risk factors identified in the Company’s current annual information form. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Although the Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company’s exploration results and the Company’s plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

To view Figures 1 to 4, please visit the following link: http://media3.marketwire.com/docs/txg0923figs1to4.pdf.

To view Table 1, please visit the following link: http://media3.marketwire.com/docs/txg0923table1.xls.

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About Staff @ Geology for Investors

Geology for Investors seeks to demystify mineral exploration and mining projects for mining company investors. All of our writers and contributors are experienced and educated in geology and the geosciences.