Mr. Lorne Woods, formerly with Osisko Mining Corp. (TSX: OSK; market cap: $4 billion), started his own endeavours with Sunset Cove Mining Corp. (TSX.V: SSM; market cap: $9 million) operating an interesting exploration project in Peru.
In our recent article "Following the Money to Latin America", we highlighted why Peru is among the Top-3 exploration and mining countries of Latin America and why we follow Mr. Woods and his promising Carolay Silver Polymetallic Project in Peru.
Yesterday (08/22/12), Lorne announced having discovered 13 new polymetallic veins on its Carolay Property (5,784 ha) and already presented assays from sampling 10 veins. Another 24 rock samples were taken, sent to the lab and assays are expected shortly.
Two out of these 13 newly discovered veins stand out immensely as being 4 m and 8 m wide - which is remarkable as typical mineable veins can have widths of 1 m.
The 4 m wide Lindsay Vein was found, because an old small adit was discovered. The exploration team then did a 1 m deep trench and sampled the vein returning remarkable 91 g/t silver, whereas the vein is open to the north as the hanging wall has not yet been located. Further assays from this prospective silver vein are expected shortly.
The 8 m wide Maria Vein appears to be 200 m in length and is located north-east of the Lindsay Vein. Samples were taken and assays are expected shortly. If mineralized sufficiently, such veins may be mineable via inexpensive and quickly implemented mining methods generating immediate cash-flow in the not too distant future (in contrast to most other mineral deposits, being one of the reasons we follow closely the exploration and development of polymetallic vein deposits especially in Latin America as being famously rich in such deposit types).
Simultaneously, a +6,000 m drilling campaign is ongoing on the Carolay Property. Hence, the Lindsay and Maria Veins are expected to be drilled during September already. Typically, 1-2 months before drilling of a prospective target starts, the stock prices of explorers generally tend to rise strongly - based on the speculation of a soon-to-be announced drilling success, especially if prior sampling indicates a promising mineralization.
Besides these newly discovered two veins and one adit, another 11 veins and two adits were located on the property to be dril tested shortly as well, whereas the yesterday announced assays are as follows:
Carolay is located near the village of Ushnobal in La Libertad. Low-volume artisanal silver mining had taken place at Carolay during the 1870s. The previous titleholder had insufficient capital to fund further exploration. After a thorough evaluation process and negotiations, SSM took possession of the property.
All of SSM's properties are located near existing significant mining or exploration projects. The company is not only publicly traded on the Toronto Exchange (TSX.V: SSM), but also on the Bolsa de Valores de Lima in Peru (BVL: SSM). SSM is headquartered in Toronto, Ontario, with an office in Montreal. The company's wholly owned Peruvian subsidiary is based in Lima (Minera Sunset Del Peru SAC).
During 2012, SSM intends to focus on its flagship Carolay property by continuing its core drilling campaign of around greater than 6,000 meters until the end of the year and completing an updated NI43-101 Technical Report to accomplish two objectives: 1. To prepare the first Carolay resource calculation. 2. To begin exploring the Humberto and Marañon sectors, which were acquired in late 2011 and have more than doubled the property to 5,784 hectares. Surface sampling has been positive and both are ready to be explored by drilling to reveal their potential. Additionally, the highly prospective Carolay 4 vein will be more thoroughly developed.
The company's NI43-101 Technical Report for Carolay, which now totals 5,784 ha, demonstrates a mineable grade of 269 g/t silver. A new vein, Carolay 4, has recently been discovered and surface samples taken from its 13 meter length show 352 g/t silver, whereas one sample returned 4,674 g/t silver. There are also indications of a disseminated copper ore body on the property, potentially porphyry style. Porphyry deposits are the single largest source of copper in the world and can also be major sources of silver and gold.
Economic grades of silver have been found in the samples taken for the NI43-101 report on Carolay, such as 269 g/t silver, 0.9% zinc, 0.8% lead, and 0.3% copper. The mineralization found on the Carolay property and the adjacent Marañon sector fits into the model of polymetallic and feeder veins and is similar to that found in the Coeur D'Alene silver district. On May 30, SSM released the assays from the first drill hole intersecting a high-grade vein with 151 g/t silver for almost half a meter. Further assays from the ongoing drill program will be released any time now and provide the stock with a regular news flow, potentially confirming the extension of such veins and discovering new zones of high-grade mineralization.
Located 550 km NNW of Lima, the regional geography at Carolay is made up by Precambrian aged metamorphic rocks of the Maranon Metamorphic Complex famous both for its rich mineralization and its potential for discoveries. It is co-magmatic with the Pataz Batholith located within the gold and silver Pataz mining district. Both geological formations - Maranon and Pataz - stem from the same magma flow. Carolay is located on the fringes of the Pataz Batholith. The productive Pataz Mining Belt is internationally known for its rich gold and silver deposits. According to the Geological, Mining & Metallurgical Institute of Peru, 6 million gold ounces have been produced in the Pataz, Parcoy and Buldibuyo mining districts from 16 mines over the last 100 years.
Nearby and around the Carolay property there are blocks of claims held by Minera Aurifera Retamas and Consorcio Minero Horizonte. These Peruvian mining companies operate well-known precious metals deposits in the general area of the Maraňon Fault, a well known metallotect. Several claim holders are present immediately south and contiguous to Carolay. Within a 50 km radius, the important gold and silver producers Poderosa, Maraňon, Retamas and Horizonte operate producing mines. The same geological features found in these precious metal production zones can be found at Carolay, whereas the topographic, tectonic and petrographic setting is similar.
SSM's ability to find and acquire properties like Carolay stems from the network it has established in Peru through decades of working in-country and through the relationships that its Peruvian staff have made after a combined 48 years working for major Peruvian and multinational companies. This ability provides the company with an advantage that few others can meet.
Disclaimer: The above editorial is not to be construed as an investment advice, consultation, or even recommendation to buy, sell or even hold any kind of securities or financial instruments of the above mentioned companies, any other company, market or physical commodity. Rockstone Research Ltd. or the author was not paid by the above mentioned companies to produce this content. The author holds shares of Sunset Cove Mining Corp.
Disclosure: I am long OTC:SNCGF.