Cimarrón Property

Minera Camargo - Properties

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Location

The Cimarrón Property is located in southern Sinaloa State about 40 km E of the coastal city of Mazatlán near the village of San Lorenzo in the Rosario Mining District. Most of the historic workings on the Cimarrón Property (e.g. La Mexicana, Huanacastle) are centered on iron-rich quartz veins and breccias with bonanza-grade gold and silver values. The veins are related to the evolution of the Mexican Ignimbrite Belt, the largest known silicic volcanic field in the world.

Other Important Gold and Silver Mines in the Mexican Ignimbrite Belt include:

• Tayoltita with production prior to 1998 totaling 654 million ounces of silver and 9.14 million ounces of gold in 19 million tonnes of ore (Enriquez and Rivera, 1998) and current reserves of about 1.5 million ounces of gold equivalent. See Wheaton River.
• El Sauzal with 41.7 million tonnes of ore grading 3.4 g/t Au or a total of 1.9 million ounces of gold. See Glamis.
• Rosario, which was reportedly Mexico's second largest gold producer in the 1700's.

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Access

From Mazatlán, the northern part of the Cimarrón Property is accessed via Highway 45, and the western part of the property is within 12 km of the Pan-American Highway (Hwy. 15). Within the Property boundary, there is a well-maintained network of country roads between Rosario, Cacolatán, Mesillas, San Lorenzo and El Chele.

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Regional Geology

The Cimarrón Property occurs on the western margin of the Mexican Ignimbrite Belt. The Belt formed between the Eocene and the Miocene, with periods of peak magmatism in the Paleocene-Eocene (Lower Volcanic Sequence), a hiatus between the Eocene and Oligocene (an unconformity), and explosive silicic magmatism in the late Oligocene and Miocene (Upper Volcanic sequence).

The Lower Volcanic Sequence is characterized by calc-alkaline strato-volcanoes composed of intercalated rhyolite and andesite formed in a compressional tectonic environment. Volcanic activity paused for much of the Oligocene, then the angle of the Farallon plate steepened as it was consumed under the western margin of Mexico and the magmatic axis "rolled back" to the west.

The change from compressional to extensional tectonics provoked an upwelling of felsic magma through the weakened crust, and initiated the largest ignimbrite blast known in the world. The Upper Volcanic Sequence is characterized by high-silica rhyolite flows, domes, breccias, ash-flow tuffs and air-fall tuffs. Continued extension throughout the Miocene resulted in high-angle faulting of the volcanic pile, and the iron-oxide precious metal deposits of the western Sinaloa (e.g. deposits of the Rosario Gold District) are thought to be related to this later event.

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Stream Sediment Geochemistry

Regional stream sediment geochemistry of fourth and fifth order drainages by the Consejo de Recursos Minerales in 2000 clearly highlights the Rosario Mining District as a highly anomalous area for gold.

Our own stream sediment sampling has both confirmed the CRM's results, and defined at least three gold-rich areas on the northern half of the Cimarron Property: (i) Huanacastle, (ii) Santa Isabel and (iii) El Prado.

The Huanacastle Anomaly is about 3.4 km long by 2.2 km wide, and remains open to the south. It is defined by seven adjacent creeks with gold values ranging from 16 ppb to 2245 ppb Au. Of the seven samples, 4 contain more than 74 ppb Au. Within the Huanacastle drainage, several mineralized zones have been identified, including: (i) the NE trending El Bolante Quartz Veins with values of up to 40.5 g/t Au and 211 g/t Ag across 1 meter, and (ii), the NW trending Don Juan Structural Zone with values of 12.7 g/t Au and 38 g/t Ag across 1 meter. These results are very preliminary, and over 75 m of trenching and continuous channel sampling has been done to better define the width and grade of these zones (results pending). To the south, the Huanacastle Anomaly remains open in the area where two historic smelter sites with abundant magnetite slag have been located.

The Santa Isabel Anomaly is currently defined over a NW trending area 1.5 km long and 1 km wide that remains open to the southeast. It is defined by three adjacent stream sediment samples that contain 214 ppb Au, 1895 ppb Au and 1097 ppb Au. The area has not yet been prospected, but a historic smelter site has been located just NE of this anomaly.

The El Prado Anomaly is a single drainage 600 m long with values of 578 ppb Au.

Mineralization

Gold on the Cimarrón Property is known to occur in quartz-specularite veins and breccias that can contain significant silver and copper values. There are also areas which have potential for larger stockwork deposits.

Metallogeny

Mexico is host to an emerging class of iron-oxide hosted precious metal (IOPM) deposits. Based on the author's observations in Mexico, these deposits might differ form the better documented class of iron-oxide hosted copper-gold (IOCG) deposits in the following ways:

Iron oxide deposits are attractive exploration targets because they tend to be larger than other types of hydrothermal deposits (e.g. quartz-dominated veins and stockworks). They have high temperatures of formation, and are thought to be generated from magmatic end members of ore-forming hydrothermal solutions. Therefore, they should have a close spatial relationship to the intrusive rocks, although the larger ore bodies occur in receptive volcanic rocks near the intrusions rather than directly in them.

Table 2:

Abbreviated List of some key characteristics that might define two important classes of iron oxide deposits in Mexico.

Exploration Results

Results of Camargo's on-going exploration of the Cimarron Property are published in the "What's New" section. The first exploration campaign started 20 September 2004.