Santo Domingo is located approximately 130 kilometres northeast of Managua the capital city of Nicaragua. Geologically, Santo Domingo hosts similar epithermal gold mineralization to the nearby La Libertad deposit, located 10 kilometres to the west.
Santo Domingo is a low sulfidation, gold-silver epithermal system hosted in Tertiary andesites and occurs in a series of high grade, structurally controlled veins that are associated with broad zones of stockworks and breccias. To date at least eight major sub-parallel mineralized structures have been recognized at Santo Domingo. The structures trend mostly NE, vary from 2 to 30 meters in width and remain continuous for more than 3.5 kilometres along strike. High grade assay results of up to 230 g/t gold and 200 g/t silver were obtained from rock chip samples taken across the core of well-exposed quartz veins that represent the main feeder conduits of the mineralized system.
Since 1980 Santo Domingo has been owned by a Coop of individual miners. During this period the miners have and continue to excavate vertical shafts by hand to an average depth of 20 meters in oxidized mineralization. Production records indicate the Coop has mined approximately 56,000 tons at an estimated recoverable grade of 7.5 grams per ton.
Numerous samples taken by Chesapeake in tailings and dump materials from Santo Domingo have been assayed and results range from 3 to 14 g/t gold and up to 24 g/t silver. Twelve 2 meter channel samples of oxidized quartz taken by Chesapeake from vein outcrops along 1 kilometre of strike averaged 7.3 g/t gold and 39 g/t silver. Channel samples taken in the stockworks and breccias adjacent to one poorly exposed structure returned the following results.
21 meters @ 1.3 g/t gold and 11.5 g/t silver
8 meters @ 6.8 g/t gold and 23.5 g/t silver
4 meters @ 1.6 g/t gold and 17.0 g/t silver
6 meters @ 1.2 g/t gold and 23.2 g/t silver
10 meters @ 1.0 g/t gold and 6.0 g/t silver
In 2003 Chesapeake staked La Union, a 24,500 hectare mineral concession situated north and west of Santo Domingo. Chesapeake undertook a regional stream sediments geochemistry program which led to the discovery of two structures with precious metals mineralization. One structure is a NNW trending low sulfidation epithermal vein and stockwork system that has been traced for over 1.5 kilometres. Initial rock chip samples collected from the quartz veins returned up to 17.8 g/t gold. Three intermittent channel samples from trenches hand dug along one kilometre of strike yielded 10 meters of 2.13 g/t gold, 4.5 meters of 3.2 g/t gold and 4.2 meters of 1.4 g/t gold.
The second epithermal structure found within the La Union concession trends NE and is believed to be part of the Santo Domingo system. Two 1.5 meter wide rock chip channel samples taken 100 meters apart along strike from a broad quartz stockwork zone returned 2.5 g/t gold and 51 g/t silver and 0.7 g/t gold and 27 g/t silver.
Chesapeake has entered into an option agreement with the Coop to acquire Santo Domingo by making staged payments totaling US$3.0 million over four years. The option agreement is subject to the approval of the Ministry of Energy as well as certain conditions to be met by the Coop.
