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Esquilache

Esquilache 43-101 Report dated September 28, 2011

Esquilache Picture

San Antonio de Esquilache is a 1,000 hectare property located in southwestern Puno, 28 km south and directly adjacent and on strike to Buenaventura’s Chucapaca deposit – 4.3 Moz Au + 34.6 Moz Ag (picture adjacent shows proximity). It takes approximately two and a half hours to reach Esquilache from Puno city via a good dirt road passing through the village of Juncal. The property has access to electricity from the regional grid and water supply is readily available.

There has been substantial production of silver, lead and zinc plus gold and copper commencing some time before 1679. Records of the production history are incomplete, but mining likely became sporadic from quite early in the history of the Republic until the 1940s. Modern mining, by Hochschild, lasted from 1953 to 1963. Since then, apart from minor informal operations, the mine has lain dormant. There is no history of diamond drilling from surface prior to the recent campaigns conducted by Forrester.

Forrester acquired a 100% interest in the property through a combination of work expenditures and cash payments. The work program included a 130 line kilometre geophysical survey (IP/ Magnetics), extensive surface geochemical rock sampling, underground sampling of accessible workings and the drilling of 5,710 metres in 31 DDHs.

The San Antonio de Esquilache caldera has a diameter of approximately six kilometres and developed in the early to mid Tertiary by eruption of andesitic volcanic lavas and pyroclastic rocks at the intersection of regional northwest-southeast and approximately east-west striking faults. Co-magmatic intrusions of microdiorite intrusive and dacitic domes have been exposed in the centre of the caldera that is covered by the mineral concession. Polymetallic mineralization occurs in low sulfidation quartz veins and breccia bodies that range from epithermal near surface to mesothermal at depth.

The prominent features on the property are two hills – Cerro Creston and Cerro Mamacocha. Cerro Creston is the higher of the two hills and the top at 5,000 metres above sea level is approximately 450 metres above the valley floor.  It was the site of the majority of the past mining and includes a 3.5 kilometre long tunnel that accessed the veins. Mamacocha is somewhat lower, topping out at approximately 4,850 metres above sea level and accept for a major working on the Ivett-Elvira vein is relatively unmined..

The vein system is complex but in general there are six major known cimoidal breccia veins (three on each hill) that range in width from about three metres to 17 metres in width and strike northeast-southwest, lesser semi-parallel splits and spays of the breccia veins and cross-trending tensional veins. Forrester has concentrated the work programs to date on the Cerro Mamacocha area because the initial orientation sampling indicated greater gold content and less exploitation than at Cerro Creston.

The following highlights from the drill program give an indication of the grades and widths of the veins at Cerro Mamacocha:

  • Significant drill results (true width) include:
  • o977.0 g/t Ag + 4.88 g/t Au over 2.0 metres (Elvira Vein)
  • o506.0 g/t Ag over 5.0 metres (Mamacocha vein)
  • o254.5 g/t Ag. 7.14% Pb, 11.87% Zn over 2.0 metres (Elvira Vein)
  • o348.4 g/t Ag + 1.93 g/t Au over 2.8 metres (Ivett Vein)
  • o320.9 g/t Ag + 0.95 g/t Au over 2.0 metres (Elvira Vein)


Recent work has concentrated on evaluating the surface outcrops of the principal veins and the existing mine dumps as sources of near term resources that would support the establishment of a 350 to 500 tpd mill to provide cash flow for exploration of the considerable underground mining potential of the property. The concrete bases for the 450 tpd Hochschild mill are in good shape and would provide a major reduction in capital expenditures.  Three metallurgical samples are being tested to establish a mill flow sheet. The head grades of the samples assayed:

Sample

Au g/t

Ag g/t

Cu%

Pb%

Zn%

Sepulveda Vein

0.04

198.00

0.01

0.25

0.04

Elvira Vein

0.13

149.00

0.03

0.07

0.69

Farallon Dump

0.02

92.00

0.24

1.67

3.47

 

Esquilache is a classical silver-rich Tertiary caldera system. In addition to the vein mineralization there is excellent potential for discovering large scale breccia zones and the presence of potassic alteration (secondary biotite and quartz/orthoclase veinlets) in the microdiorite indicates the potential for discovery of a porphyry deposit at moderate depth.