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In one sense, mineral exploration is a complex process with a lot of
moving parts, including money-raising, bringing on partners, marketing,
surveying, sampling and drilling. In another sense, looking for metals is
simply coming up with a theory about where the minerals are and how they got
there, then testing that theory.
It is the science behind mineral exploration - the fact that theories must
be proven or disproven before continuing - that often gets lost in the story
of a discovery. If the first theory is not borne out by the evidence, the
exploration company must come up with another, or a different area of
mineralization to be tested. And so on, until the evidence proves the
hypothesis, then more detailed work can continue, based on that hypothesis.
The science is also why it is crucial for an explore-co to have good
geologists on the payroll and/or directors with mineral exploration
experience, who can come up with the theories and test them, and just as
important, to know when the theory is wrong so that they can move on and test
another theory. This is especially important because most juniors have
limited exploration budgets and no revenues; it’s pretty easy to
blow the budget by continuing to test an incorrect hypothesis.
All of this is background for telling the next chapter of the Max Resource
(TSX-V:MXR) story.
Conglomerates
Max has a conglomerate gold project in the Choco region of Colombia;
conglomerated free gold, at surface, is potentially spread across 1,000
km, as
shown in an LWIR (long wave infrared) satellite survey below.
Earlier this year, Max
updated investors on the results of two samples taken from a
1,000-square-kilometer new exploration zone containing surface gold and
platinum.
A concentrate made from the first sample graded 340.84 grams per tonne
(g/t) gold and 111.03 g/t platinum, for a combined 451.87 g/t gold and
platinum.
The second concentrated sample was 222.06 g/t gold and 113.83 g/t
platinum.
North Choco
On May 8 Max announced
it entered into a binding letter of intent (LOI) with Noble Metals
and Buena Fortuna Mining, to acquire 100% of those two companies’ interest
in Andagueda Mining, which has the first recorded
mining agreement with the Tahami indigenous group - the
landowner - to explore a 500-square kilometer mining area.
Three weeks into a 10-week exploration program, seven of 23 chip samples
returned grades ranging from 2.9 grams per tonne (g/t) gold, to a glittering
highlight of 155.27 g/t over a 0.4m intersection. Of the seven samples, three
showed copper grades in excess of 1% Cu, in a vein zone containing pyrite,
chalcopyrite (the copper mineral) and galena.
The chip samples were taken over various widths from four locations within
a 400- by 700m exploration area centered on North Chocó’s historic gold mine.
Read more at Max
in the chips at North Choco with high-grade gold/ copper
When added to Max’s Choco Precious Metals Project, the 500-square-kilometer
North Choco property expands Max’s land holdings in the department of Choco,
Colombia, from 2,140 square kilometers to 2,640 sq. km.
Surrounded by success
Of note to Max investors is historic exploration at North Choco.
North Choco is contiguous to properties held by AngloGold Ashanti and
Continental Gold. Forty-seven kilometers to the northeast, AngloGold’s
Nuevo Chaquiro copper porphyry discovery has an inferred resource
containing 3.95 million tonnes of copper (@0.65% Cu) and 6.13 million ounces
of gold (@0.32 g/t); it is one of five known porphyry centers concentrated
within a 15 sq. km area.
“Outlined by >0.3% Cu limit, the
Nuevo Chaquiro mineralization forms a body elongated in shape by
1,200 m in the E-W direction with dimensions of approximately 500 m in width
and vertically. On the eastern flank, the porphyry mineralization occurs at
350 m depth whereas in the west it is first encountered at somewhat deeper
depths (400-500 m depth),” reads
a technical paper on the Nuevo Chaquiro discovery. It
adds:
“Nuevo Chaquiro is a significant copper-gold porphyry
deposit clearly demonstrating the potential for future new porphyry
discoveries in the Middle Cauca Miocene volcanic belt of Colombia and
demonstrates what can be achieved from sediment sampling programs.”
AngloGold’s initial reconnaissance work at North Choco, in 2005,
identified pyrite, chalcopyrite, galena, sphalerite and arsenopyrite, in a
matrix of quartz and calcite from historic gold mines and copper porphyry
prospects. However, there was no follow-up because of access restrictions but
not before a number of porphyry anomalies were identified
Fast forward to January 2019, when Andagueda Mining took 14
channel samples from historic gold mines located on the property. Among the
assays, highlights included 0.3m at 262.0 g/t gold + 0.57% copper + 941 ppm
cobalt, and 0.3m at 49.3 g/t gold + 11.4% copper + 502 ppm cobalt.
High-grade gold is nice, but the real prize at North Choco glints red, not
yellow.
Porphyry close-ology
Based of historic exploration and initial field reconnaissance management
at Max Resource thinks there is strong potential for finding a copper-gold
porphyry – defined as a large mass of mineralized igneous rock, that is often
suitable for bulk mining - within the 500 km of North Choco.
Their first clue is the high-grade gold and chip samples recently taken by
Max. Verification is also coming from consultants Max is working with
including the top geologist employed by Lundin Gold, which is finishing
construction on its Fruta del Norte project and aiming for
production in the fourth quarter.
The underground gold and silver mine will be Ecuador’s largest, and is
expected to produce 4.6 million ounces of gold over 15 years.
Sol Gold has also been active in the same vicinity as North Choco. The
connection between them and Max is the geological formation continues from of
northern Ecuador and through to the Choco belt, Colombia.
First, a bit of background on Sol Gold historical exploration together
with sediment and channel sampling was the catalyst of the discovery that is
now the company’s flagship Cascabel project in northern Ecuador,
which borders Colombia to the south, contains the Alpala deposit
with a measured and indicated resource of 10.9 million tonnes of copper and
23.2 million ounces of gold.
A PEA released in May details the geology of the deposit:
The Eocene Alpala porphyry deposit lies in a zone of overlap
between the Eocene and Miocene Andean porphyry belts that extend from
Colombia through Ecuador and Peru into Chile and Argentina. The basement
rocks consist of tholeiitic basalts of the Dagua-Piñon Terrane, an
oceanic plateau that is believed to have accreted to South America in the
Late Cretaceous. The magmatism in northern Ecuador and southern Colombia is
characterised by the lack of a well-developed arc and erratic pluton
distribution. This suggests a low-angle subduction
environment, conducive to compression and porphyry mineralisation.
How does that relate to North Choco? Northern Ecuador is within the Andean
Copper Belt, which runs from Chile in the south, through Ecuador, up to
Colombia and then turns northwest into Panama. The Andean Copper Belt hosts
some huge copper-gold porphyry deposits including Escondida, the world’s
largest copper mine that Sol Gold says has the same-age rocks as
Cascabel.
You can see the extent of the Andean Copper Belt in the map below,
produced by Max Resource. Notice the orange dots showing a major copper-gold
deposit or mine, running along the coast of South America and into Central
America. One of the few areas (in green) without an orange dot is the Choco
department of Colombia containing Max’s Choco Precious Metals Project, and
its adjoining North Choco property.
Now compare that map to the one published by Sol Gold in its PEA
technical report. The Eocene, Miocene and Jurassic belts shown in green,
red and yellow, are not far south of North Choco and Continental
Gold’s Buritica project, assigned a star. Buritica will
be a mine. The fully permitted gold project has been under construction since
2017 and is expected to go into production in 2020.
North Choco appears to have close-ology in its favor. What are
the chances of a high-tonnage copper porphyry monster lying beneath North
Choco, a 500-square-kilometer land package, with major copper-gold deposits
to the north and south of it on the Andean Copper Belt, and AngloGold’s
Nuevo Chaquiro neighboring copper porphyry discovery being one of
five known porphyry centers concentrated within a 15 sq. km area? We’d say the
chances are pretty good.
One team will take on North Choco, conducting similar exploration strategy
as AngloGold and Solgold entailing extensive soil and steam
sediment sampling and follow up ground magnetics work to target elephant size
porphyries lurking under the dense jungle and forest canopy. The ground crew
will be searching for very large orebodies characteristic of porphyries. They
typically contain hundreds to thousands of million tonnes, low to medium
grade at 0.3 to 1.5% copper. Most of the world’s copper-gold deposits are in
the Pacific region and they usually contain 0.3 to 1.6 g/t gold.
A second crew will remain at the Choco Precious Metals Project to work a
new target that has been identified about 10 kilometers east of the
conglomerates. El Tambita was previously discovered in 2013
by Condoto Platinum, along Rio Tamana, where 605,110 ounces of
placer gold was plucked from the riverbed between 1906 and 1990.
A gold-bearing shear zone featured channel samples averaging 63.25 grams
per tonne over 9.8 meters; one of the grab samples returned a whopping 220
g/t.
“El Tambita is one largely untested high-grade gold target,
historic exploration data suggests strong potential for the discovery of
additional gold zones” Matich stated in a news release, adding: “Max field
crews are currently mobilizing to El Tambita to follow up the
outlying anomalies to locate the source of the Rio Tamana alluvial
gold.”
Rock and stream samples, and samples from panned concentrates, will also
be studied to identify new exploration targets, along with the results of a
recent LWIR survey over the area.
As for the conglomerates, Matich said the longer plan is to identify the
point of contact where the conglomerates, identified at surface
and near-surface, meets the bedrock. Experts Max has consulted suggest
this is where the high-grade material should be.
Imagine the area as one huge placer gold system, with ancient rivers
carving channels in the rock and depositing gold where the water slowed, like
river bends. The challenge is identifying the “old” rivers from the “new”
(existing) waterways.
To do that, Max plan to conduct an “induced resistivity” survey on the
best targets within the 1,000-square-kilometer, LWIR-surveyed area that
identified multiple conglomerate zones. This type of ground survey, versus
aerial survey, runs electrical current through the ground, then measurements
are taken to calculate the resistivity of sub-surface rocks, yielding data
about the geology.
“To find out where the richer grades are, you need to
go to target the spots you know and pick up the river channels,” says Matich.
“It’s used by a number of companies in Colombia including Continental Gold.
The consultants have indicated that It will undoubtedly map out the profiles
and more than likely do the horizons as well. That will differentiate between
the old creek beds and the new.”
The end game is to find a partner Max can link up with, who can help
finance more exploration as the company continues to advance its Colombia
projects.
Conclusion
We started covering Max when there was limited information about their
Choco property, other than it was once an important area for platinum mining
and it had potential as a gold play - since gold had been discovered in
conglomerates, the same type of gold mineralization that fed an area-play
frenzy a few years ago in the Pilbara, Western Australia.
It’s been interesting to see Max growing and shifting focus to other
historic gold and porphyry areas over their vast landholdings as it gathers
more information about this under-explored Choco region of Colombia. We now
know Max has first-mover advantage at Choco. There are no other
companies like Max that has the sole rights to explore,
through the local indigenous groups that actually own the
mineral rights - which is absolutely key to developing a project of this
scale.
We know that high-grade precious metals mineralization occurs at surface.
Remember, a concentrate made from a surface sample graded a combined 451.87
g/t gold and platinum.
We understand that an exploration company needs to test hypotheses and
figure out to best spend the treasury. Max just closed the first tranche of a
$1.2 million private placement. The number of accredited investors with
shares in Max is growing.
The theory of pit samples containing richer grade gold has not yet been
proven. But Max has other irons in the fire. The game plan now is to explore
El Tambita for high-grade gold, and to discover an elephant-sized
gold-copper porphyry at North Choco.
I’m pumped for the news flow likely to come out of Max’s dual-strategy
exploration in Colombia this summer.
Max Resource Corp
TSX.V:MXR, FSE:M1Di
Cdn$0.12 July 11th
Shares Outstanding 66m
Market cap Cdn$7.9m
Max website
*****
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This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources he
believes to be reliable but which has not been independently
verified. Richard Mills makes no guarantee, representation or warranty and
accepts no responsibility or liability as
to its accuracy or completeness. Expressions of opinion are those of
Richard Mills only and are subject to change without notice. Richard Mills
assumes no warranty, liability or guarantee for the current relevance,
correctness or completeness of any information provided within this Report
and will not be held liable for the consequence of reliance upon any opinion
or statement contained herein or any omission. Furthermore, I, Richard Mills,
assume no liability for any direct or indirect loss or damage or, in
particular, for lost profit, which you may incur as a result of the use
and existence of the information provided within this Report.
Max Resource Corp (TSX.V:MXR), is an advertiser on Richard’s site
aheadoftheherd.com. Richard owns shares of MXR
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