La Navidad

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Status: Under Option to Centerra Gold

Target

The target at Navidad is an orogenic gold deposit with characteristics similar to mines currently in operation such as La Herradura (>6 million ounces Au), Noche Buena (2 million ounces Au), San Francisco (3.5 million ounces Au) and others located in the State of Sonora, Mexico. Small scale historic mining at La Navidad exploited high grade vein deposits located along faults.

Location and Setting

The project is located in the rich Magdalena de Kino mining area in north-central Sonora, 30 km south of the Lluvia de Oro Mine and 155 km north of Hermosillo, capital of the State of Sonora, Mexico, and 90 km south of the border with the United States. The concessions are situated 25 km southeast of the mining friendly towns of Santa Ana and Magdalena and are accessible by paved highway. Power and water are available nearby.

Land Status

La Navidad property consists of 12 mining concessions totaling approximately 26,000 hectares in good standing in accordance with the Mexican mining law. Millrock owns a 100% interest in much of the land, but key concessions are owned by a third party. Millrock has an option to purchase a 100% interest in these concessions. Centerra Gold has an option to earn an 80% interest from Millrock.

Geology and Mineralization

The Navidad project and prospects bear some of the characteristics of an orogenic gold system similar in nature to other nearby gold deposits being mined in the district (Lluvia de Oro and La Jojoba, Columbia Metals).   

The La Navidad gold-silver-copper mineralization is thought to be located within the upper plate of a low angle fault block containing early Cretaceous sedimentary rocks. The fault block lies in structural contact with Jurassic to Mid-Tertiary metasediments, volcanoclastic, and younger sedimentary rocks and with intrusive rocks of the Magdalena Metamorphic Core Complex. Basement rocks in the area are composed of Mesozoic granite and gneiss locally cut by granodiorite and gabbro.

Gold is hosted in a series of northwest-trending, sub-parallel faults which can be traced over 2 km and in a northeast trending zone containing metasediments containing many small historic mine workings. Faults hosting mineralization are gently dipping with an average dip of 55 degrees NE. Gold occurs in silica-rich quartz stockwork veins and in quartz-sericitic zones 300 to 600 meters wide on the surface. Alteration is intense and includes quartz sericite pyrite + iron carbonates (siderite). Reddish brown limonitic oxidation (after pyrite) is pervasive in and around the known gold occurrences. 

Historical drilling of one mineralized area (21 shallow RC holes totaling 1126 m) returned an intersection of 12.2 m of 2.08 g/t Au.

Artisanal workings for alluvial gold are common in drainages near the mineralized areas.

Current Exploration Program

A comprehensive exploration program consisting of structural, lithological and alteration mapping, combined with rock and soil geochemical sampling and magnetic and pole-dipole IP geophysics has been completed.  Environmental permits for all work have been obtained. A drilling campaign to test principal targets is currently underway. 

Agreement and Terms

Millrock has an option to purchase the mineral concessions and surface rights. In turn, Millrock has made an option to joint venture agreement with Centerra Gold whereby the latter can earn an 80% interest by expending US$3 million within four years, and paying US$2.5 million to the underlying owner of the key concession.