The Metates project is one of the largest, undeveloped disseminated gold and silver deposits in the world with a NI 43-101 resource estimate of 16.7 million ounces of gold, 434 million ounces of silver and 2.8 billion pounds of zinc. Metates is located in Durango state about 175 kilometers northeast of Mazatlan.
The Metates deposit is hosted in a window of Mesozoic basement rocks exposed by erosion of extensive flat-lying Tertiary Volcanic cover. The Mesozoic sedimentary sequence is over 1,000 meters thick and consists of a series of interbedded sandstones, shales and argillites capped by a 100 meter thick conglomerate. These sediments have been intruded by an ellipoidal quartz latite body in the form of a sub-volcanic to extrusive volcanic dome and is up to 300 meters thick and 1,500 meters long.
Mineralization occurs in two zones: the Main Zone which is within the intrusive and its underlying sediments and the North Zone, within the conglomerate and adjacent sediments. The gold-silver mineralization occurs as micron to submicron stockwork veinlets or disseminations in both the intrusive and sedimentary host rocks.
During 2008 Chesapeake drilled 37 core holes to confirm and expand Cambior Inc.’s historic resource and to provide new metallurgical samples. Several significant intercepts were encountered from the step-out holes drilled 100 meters outside the known mineralization (see table). Excellent potential exists to further increase the resource as the deposit remains open along strike to the northwest and southeast.
Step-out Location
Hole #
From (m)
To (m)
Interval (m)
Eg Au* g/t
Au g/t
Ag g/t
Zn %
Central
CKG 08-24
51
165
114
1.31
0.72
42.4
0.23
Central
CKG 08-28
57
279
222
1.14
0.79
26.8
0.23
Central
CKG 08-30
390
519
129
1.47
0.80
48.2
0.06
Central
CKG 08-25
42
90
48
0.99
0.91
5.8
0.13
North
CKG 08-31
351
387
36
2.73
2.69
3.2
0.04
North
CKG 08-36
117
258
141
1.22
1.03
13.4
0.09
Main
CKG 08-32
96
174
78
0.97
0.72
17.5
0.12
Main
CKG 08-34
174
201
27
0.91
0.80
7.9
0.05
*EqAu (equivalent gold) g/t = Au g/t + (Ag g/t / 72) and assumes metallurgical recoveries at 100%
In 2009, Independent Mining Consultants (“IMC”) of Tucson, Arizona completed a NI 43-101 compliant mineral resource estimate based on 171 drill holes totaling 63,127 meters. Mineral resources were estimated using a US$750 per ounce gold price, a silver price of US$10.42, and within an optimized pit shell using a cut-off grade of 0.50 g/t gold equivalent. The open pit associated with the reported resource extends 2,500 meters in a north-south direction, is about 1,700 meters wide and up to 600 meters deep. The overall waste to ore stripping ratio is about 1.80. On a gold equivalent basis, Metates contains 20.2 million ounces of gold in measured and indicated material along with 2.4 million ounces in inferred classed material.
Metallurgical testing at Resource Development Inc. and Hazen Research have demonstrated that the generation of a bulk rougher sulfide flotation concentrate followed by oxidation of the concentrate would achieve high recoveries of gold and silver during subsequent cyanidation. Roasting and pressure oxidation has achieved overall gold recoveries in the range of 85% - 90% and silver in the range of 80% to 85%. Oxidation of the concentrate by either method also allows for the recovery of an economically viable zinc by-product at prevailing zinc prices.
Chesapeake continues to advance Metates towards the completion of a NI 43-101 Preliminary Assessment (scoping study) technical report. M3 Engineering of Tucson, Arizona (“M3”) has been contracted to prepare the report. In support of the work at M3, Independent Mining Consultants has prepared a preliminary mine schedule based on the NI 43-101 resource estimate at an ore mining rate of 60,000 tonnes per day. At this mining rate and assumed overall gold and silver metal recoveries of 85%, Metates could produce in excess of 550,000 ounces of gold equivalent (gold and silver) annually over a 35 year mine life. Precious metal production is the highest and the stripping ratio is the lowest in the first eight years of production which will enhance capital recovery and payback.
In the Preliminary Assessment report, M3 will be providing the estimated capital and operating costs of a fully integrated mining operation. Given the large resource base and metallurgical test results, M3 is evaluating production rates of 90,000 tonnes per day and higher. The Preliminary Assessment report is expected to be completed in early 2010.
