Through reconnaissance Chesapeake recognized the potential of a large, unexplored precious metal and polymetallic mining district located in western Veracruz state. In 2007, Chesapeake consolidated the Tatatila mining district totaling 28,290 hectares through staking (25,523 hectares) and acquisition (2,767 hectares) from the CRM, a mining division of the Mexican government.
The Tatatila project is characterized by Cretaceous limestones and sedimentary rocks affected by multiphase intrusions of Tertiary granodiorites, quartz-diorites and granites which are interpreted as coalescing into a large underlying batholith. The metasomatic and hydrothermal activity has formed widespread skarn alteration zones with precious and base metals mineralization. The copper-gold mineralized skarn outcrops have been mapped over an area of 200 square kilometers. In two of the main central zones, the copper-gold contact controlled garnet skarns grade upward to gold-silver-copper retrograde skarn structures. Zonation is marked to the south passing from copper and gold skarns into silver rich and base metal mineralization.
The skarns are preferentially developed along intrusive-sediment contacts and include endoskarns developed within the intrusives themselves. Porphyry and epithermal-type mineralization have been found in the same areas. Skarn assemblages associated alteration includes garnet-magnetite, garnet-pyroxene-magnetite, hematite-magnetite-wollastonite, hematite-jasperoid and calcite-hematite-silica veins in the upper part of the system. The principal sulphides are pyrite and chalcopyrite.
The Company has agreed to sell the Tatatila project to Quimicos Y Minerales de Mexico S.A. de C.V., a private Mexican company (“Quimicos”), for US$300,000 in staged payments over four years. The Company has received the first two payments totaling US$85,000 towards the purchase price. The Company will retain a 1% NSR in the project.
