Understanding Low Sulphidation (LS) Epithermal Depositscdn.ceo.ca.s3-us-west-2.amazonaws.com/1d88pu0-LS...Cross-section through the Earths crust showing convergent plate boundaries

Exploration Alliance www.explorationalliance.com

Association of Mining Analysts: London, July 2013

Chris Wilson, PhD, FAusIMM (CP), FSEG Principal Consultant: Exploration Alliance Andrew Tunningley, MGeol, MAusIMM (CP), FSEG Principal Consultant: Exploration Alliance

Understanding Low Sulphidation (LS) Epithermal Deposits

Association of Mining Analysts: London, July 2013 2 www.explorationalliance.com

Why are LS Epithermal Deposits Important?

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Unless shown, all deposits shown with Measured and Indicated Resources as of December 2011: Company Websites and BGS data

Hycroft – 1134 Mt @ 0.35 g/t Au, 13.44 g/t Ag

Sleeper – 327 Mt @ 0.33 g/t Au, 3.87 g/t Ag

Hishikari – 4 Mt @ 60-70 g/t Au 2 Mt @20-25 g/t Au

Kupol – 12.75 Mt @ 9.73 g/t Au, 120 g/t Ag

Ada Tepe – 7.29 Mt @ 2.37 g/t Au, 1.03 g/t Ag

Waihi – 4.81 Mt @ 5.62 g/t Au

LS Epithermal deposits are major sources of gold and silver. Lead and zinc are common at depth and there is usually a good correlation between silver and lead grades. Copper may be present in the deepest levels of some systems.

FDN – 25.4 Mt @ 8.21 g/t Au, 11.0 g/t Ag (P+P, Dec.

2012)

Lihir – 870 Mt @ 2.0 g/t Au

Guanajuato – Historic Production of 4 Moz Au, 1 Boz Ag


Tonnage (Mt) Gold (g/t) Silver (g/t) Lead (%) Zinc (%) Copper (%) 1 to >200 1 - >15 2 to >300 0 - 2 0 – 2 0 - 2

What are Explorers Hoping For?

Example World-Class Drill Intercepts: Hycroft, USA (Allied Nevada): 168 meters @ 0.51 g/t gold and 17 g/t silver (Feb 4, 2008) 144 meters @ 0.40 g/t gold and 36.9 g/t silver (June 25, 2008) 212 meters @ 0.54 g/t gold and 14.2 g/t silver (Nov 1, 2007) Kupol, Russia (Kinross): 29.9 meters @ 28.4 g/t gold and 222.9 g/t silver (NI 43-101) 12.9 meters @ 30.5 g/t gold and 378.3 g/t silver (NI 43-101) 9.0 meters @ 8.7 g/t gold and 83.6 g/t silver (NI 43-101) FDN, Ecuador (Kinross): 224.8 meters @ 2.1 g/t gold and 5.8 g/t silver (NI 43-101) 40.1 meters @ 5.3 g/t gold and 88.8 g/t silver (NI 43-101) La Guitarra (First Majestic): 1.6 meters @ 1.1 g/t gold and 366.0 g/t silver (NI 43-101) 1.6 meters @ 1.8 g/t gold and 263 g/t silver (NI 43-101)

Mainly open pit, oxide material.

From surface, over at least 200 metres vertical.

Underground mining only, but high grade.

Combination of underground and potential open pit on oxide material.


Global Distribution

The high and low sulphidation epithermal deposits associated with blue coloured belts are late Mesozoic and Cenozoic in age (generally <120 Ma) and are associated with recent subduction zones including the present day Pacific Ring of Fire. Deposits located in the middle of plates (grey coloured belts or metallogenic provinces) are associated with Paleozoic age (ca. 542 to 241 Ma) rocks which were formed in ancient subduction zones.

Paleozoic Belts Mesozoic - Cenozoic Belt

Paleozoic Belt

Pacific Ring of Fire

Pacific Ring of Fire



Plate Tectonic Setting


Cross-section through the Earths crust showing convergent plate boundaries where oceanic crust is subducted beneath oceanic crust (Ocean Arc setting) and continental crust (Continental Arc setting). Epithermal deposits form in these arc settings at depths of generally <500 metres to less commonly between 1 – 2 kilometres. Due to their formation very close to the earths surface, in regions of active volcanic activity and mountain building which are highly susceptible to uplift and erosion, their preservation potential is very poor.

Oceanic Arc

Epithermal Deposits

Continental Arc

Epithermal Deposits

Clastic Sedimentary Rocks

Andesitic-Dacitic Volcanic Rocks

Intermediate-Felsic Intrusives / Volcanics

I-Type Calcalkaline Pluton

Oceanic Crust: Tholeilitic Mafic Rocks

Mantle: Ultramafic Rocks

Alkalic Pluton: Intermediate Felsic Rock

S-type Calcalkalic Pluton: Intermediate

Continental Crust

Carbonate Rocks

Clastic Sedimentary Rocks: Reducing

Clastic Sedimentary Rocks: Oxidizing


Epithermal and Porphyry Hydrothermal System

Intermediate Sulphidation

Low Sulphidation Epithermal High Sulphidation

Porphyry and Skarn

The term epithermal is derived from the Latin for shallow heat – reflecting the shallow crustal environment in which they form. Epithermal deposits are classed as High, Low or Intermediate Sulphidation based on mineral assemblage and the pH/Eh of mineralizing fluids. Epithermal deposits in general may overlie or be spatially related to deeper porphyry systems.



What is a Low Sulphidation Epithermal Deposit ?

Low sulphidation epithermal deposits represent the uppermost (or most distal) parts of intrusion-related hydrothermal systems. They generally form within 500 metres of surface but may occasionally form between 1-2 kilometres deep. Metals are deposited at temperatures below 2500C through processes of fluid boiling, fluid mixing and vapour release. Where these systems break surface they form geysers, sinter terraces, and thermal mud pools. Modern day examples include the Yellowstone park and North Island, New Zealand.

Ascending hot metal-rich fluids

Descending cool meteoric fluids

Ascending fluids mix with near-surface meteoric fluids causing them to: • Cool • Change chemistry • Precipitate metals

Hydraulic fracturing of host rock releases pressure. As a result fluids boil and drop metals.

500 m

250 m

250°C

200°C

150°C


Metals Leached from Host Rocks/Basement?

BOILING

MIXING


Bulk Tonnage or Narrow High Grade Target?

Permeable horizon: • Laterally Extensive • Bedding Planes and Fractures act as conduits • Disseminated Mineralisation • Localised High Grades

500 m

250 m

250°C

200°C

150°C



LS Epithermal Deposits – A Detailed Overview for Reference !

Geyser with silica sinter terrace and mud pools

Ore

Rare Gold

Gold in pyrite Silver sulfosalts

Pyrargite Argentite Electrum

Argentite Electrum

Galena Sphalerite Chalcopyrite Argentite

Zeolite, Calcite, Clays

Calcite, Zeolite, Agate, Stibnite, Realgar

Quartz, Calcite, Pyrite

Quartz, Adularia, Sericite, Pyrite

Quartz, Fluorite, Pyrite

Pyrrhotite, Arsenopyrite, Pyrite

Lattice Bladed +Bladed Carbonate ± agate

Moss + Chalcedonic > Crystalline

Crystalline > Moss + Chalcedonic ± needle adularia ± sulphide bands

Crystalline Quartz + Adularia + Sulphide (crustiform)

Crystalline Quartz + Carbonate

Massive Chalcedonic ± Lattice bladed

Crystalline Carbonate

Low grade Precious Metal Interval

Main Base Metal Interval

Kaolinite (+ alunite alteration in some systems)

Sericite

Chlorite

Smectite

Silica

Silica adularia

Illite-Kaolinite

Chlorite-smectite

Kaolinite-smectite

Gangue Vein Textures

High grade Precious Metal Interval

Silica flooding and chalcedony

500 m

250 m

250°C

200°C

150°C

Modified after Buchanan 1981


Strong Vertical Zonation in Vein Textures indicate Depth of Erosion

The uppermost parts of epithermal veins have distinct textures such as carbonate blades and moulds which are generally replaced by silica (forming resistant quartz veins). White saccharoidal (sugary) quartz is also common. The presence of moulds and blades indicates that the entire epithermal system is preserved. Precious metal concentrations are generally of very low tenor in bladed and saccharoidal quartz veins - even in systems where high grade ore shoots are present at depth.

2 cm

Quartz vein showing moulds and bladed textures. These textures were originally formed of carbonate and were subsequently replaced by quartz.

White saccharoidal (sugary) quartz vein. Note bladed carbonate texture now replaced by quartz.

2 cm

Sheeted veins


Base Metal Interval


Stockwork Veins Breccia

Main quartz vein

Breccia

Stockwork Veins

500 m

250 m

250°C

200°C

150°C




Barren quartz vein from upper parts of system. Note early amethystine quartz (purple), and angular, open-space breccia, partly infilled with cockade quartz and marcasite.


Stockwork veins with chalcedonic and agate-like textures are common in the uppermost parts of the system and quartz-flooding of host tuffs may be present. Breccias usually retain open space (due to low confining pressures). Sulphides include marcasite (low temperature polymorph of pyrite) and pyrite. Precious metals (if present) are of a low tenor.

2 cm

Stockwork of translucent to light brown chalcedonic quartz hosted in weakly clay altered tuff.

2 cm

Sheeted veins Stockwork Veins Breccia

500 m

250 m

250°C

200°C

150°C


Base Metal Interval


Main quartz vein



Colloform banded quartz sulphide vein formed in the boiling zone. Gold is associated with dark ‘gringuro’ or sulphide-rich bands. Each band likely represents one boiling event.


Deposition of gold and silver in high grade ore shoots is associated with the process of fluid boiling. Deposition of quartz and gangue minerals from hydrothermal fluids heals fractures in host rocks. This results in over-pressured fluids which eventually causes sudden hydraulic fracturing of the host rocks. Fluids boil as pressure is released and precipitate metal and gangue minerals from solution. In mineralized systems the more times this process repeats in a given vein the higher the grade.

2 cm

Oxidized (limonitic) breccia with banded chalcedonic quartz infill. Some breccia fragments (clasts) show boxwork textures after dissolved sulphides.

2 cm


BOILING LEVEL

500 m

250 m

250°C

200°C

150°C


Base Metal Interval


Main quartz vein



Hydraulically-brecciated grey sulphidic quartz vein with sphalerite-galena infill. The lack of banding and presence of base metals indicates formation below the boiling zone.


Base metal sulphides such as galena and sphalerite typically form below the boiling level. Dark grey sulphidic quartz with high grade gold and silver may be present with base metals in a transition zone close to the base of the boiling zone. Localized changes in pressure and temperature may cause the boiling level to migrate up and down – causing telescoping of mineral zones and vein textures.

2 cm

Colloform banded quartz sulphide vein formed in the boiling zone. Gold is associated with dark ‘gringuro’ or sulphide-rich bands. Note late marcasite veinlet.

2 cm


BOILING LEVEL

500 m

250 m

250°C

200°C

150°C


Base Metal Interval


Main quartz vein



Massive galena with minor clots of green sphalerite. Note late carbonate and zeolite formed as the system cooled and surface fluids percolated downwards.


The lowest mineralized levels of a LS epithermal is dominated by lead and zinc sulphides where they may form massive quartz-poor base metal-dominant veins. Due to confining pressure at these depths stockwork and breccia development is limited, unless porous lithologies permit lateral and upward flow of fluids away from the main feeder structure. Chalcopyrite may be present in some systems.

2 cm

Quartz vein breccia infilled by grey galena and green sphalerite. The quartz appears to be a relatively early and unmineralized phase.

2 cm


Main vein

500 m

250 m

250°C

200°C

150°C


Base Metal Interval



Narrow Vein at Base of System


Alteration in LS Epithermal Systems is Strongly Zoned

Strong alteration zonation outwards and upwards from feeder structures provides vectors to mineralization. However, propylitic and near-surface alteration can be widespread and extend over 10’s of square kilometres making it difficult to accurately target narrow high grade ore shoots. Silica sinters or hot springs are important indicators of the uppermost levels of low sulphidation epithermal systems, but can form on distal faults that are a considerable distance from ore zones.

2 cm

Kaolinite and weakly silica-altered fine-grained tuff hosting sheeted quartz veinlets displaying fracture oxidation.

Strongly sericite (apple green) moderately silica-altered tuff. Minor galena is present as grey flecks. Note fracture oxidation.

2 cm

Silica Sinter Kaolinite±alunite

500 m

250 m

250°C

200°C

150°C

Silica

Zoned Clay-Sericite

Silica-Adularia

Propylitic



Geochemistry Changes Vertically Through System

There is a strong vertical zonation of geochemical signature reflecting the vertical zonation in ore and gangue minerals. Major and trace element geochemistry can be used as an indicator of level of erosion.

500 m

250 m

250°C

200°C

150°C


Base Metal Interval


As-Sb-Hg As-Sb-Hg

As-Sb

As±Au±Ag

Au-Ag

Au-Ag±Pb±Zn

Pb-Zn±Cu

Pb-Zn±Ag


Barren of Precious and Base metals at surface. Arsenic, mercury and bismuth are common pathfinder elements

Gold-rich interval where fluids “boil”. May or may not contain silver.

Base Metal-rich interval may extend to depth +/- gold-silver credits.

BOILING LEVEL

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Low Sulphidation Exploration – Strategy and Challenges



Global Exploration Strategy – Identify Arc Settings

Low sulphidation epithermal deposits form in Continental and Oceanic Arc settings as subducting oceanic plates melt and generate large intrusive complexes and associated hydrothermal circulation cells. Correct identification of Continental and Oceanic Arc settings is a pre-requisite for successful exploration.

Paleozoic Belts

Paleozoic Belt

Mesozoic - Cenozoic Belt



Preservation Potential – Is the Volcanic Sequence Preserved ?


Cross-section through the Earths crust showing convergent zones where oceanic crust is subducted beneath oceanic crust (Ocean Arc setting) and continental crust (Continental Arc setting). Epithermal deposits form in these arc setting at depths of generally <500 metres to less commonly between 1 – 2 kilometres. Due to their formation very close to the earths surface, in regions of active volcanicity and mountain building, their preservation potential is very poor.

Oceanic Arc

Epithermal Deposits

Continental Arc

Epithermal Deposits

Clastic Sedimentary Rocks

Andesitic-Dacitic Volcanic Rocks

Intermediate-Felsic Intrusives / Volcanics

I-Type Calcalkaline Pluton

Oceanic Crust: Tholeilitic Mafic Rocks

Mantle: Ultramafic Rocks

Alkalic Pluton: Intermediate Felsic Rock

S-type Calcalkalic Pluton: Intermediate

Continental Crust

Carbonate Rocks

Clastic Sedimentary Rocks: Reducing

Clastic Sedimentary Rocks: Oxidizing

Must Preserve these Rocks


Carpathian Arc-Related Epithermal and Porphyry District

Beregovo (6.9 moz Au)

Baia Mare (4++ Moz Au)

Rochovce

Trepca

Lece

Krotovo Buchim

Osogovo

Ocna de Fler

Majdanapek (8+ Moz Au + Cu)

Bor-Timok (9 Moz Au + Cu)

Vekikj Krivelji

Elatsite

Assarel

Medet

Chelopech (5+ Moz Au)

Sofia

Radka

Brad (11 Moz Au)

Rosia Poieni

Rosia Montana (17 Moz Au and 80 Moz Ag)

Recsk

Banksia Stiacnica (2.3+ Moz Au)

Kremnica (2.5++ Moz Au)

UKRAINE

ROMANIA

SERBIA

HUNGARY

SLOVAKIA

BULGARIA

INNER CARPATHIAN ARC

SOUTH APUSENI MTS

BANAT-SREDNOGORA ARC

SUMADUA-CHALKIDIKI ARC

PERIADRIATIC-RECSK ARC

250 km

Epithermal

Porphyry

Deposit size taken from a variety of sources. Most figures are historic production and Moz ++ indicates that cited numbers are likely under-estimate)



Preserved Volcanic Sequences Host Epithermal and Porphyry Deposits

UKRAINE

ROMANIA

HUNGARY

SLOVAKIA

Epithermal

Porphyry

250 km

INNER CARPATHIAN ARC

SOUTH APUSENI MTS

BANAT-SREDNOGORA ARC

PERIADRIATIC-RECSK ARC

Beregovo

Baia Mare

Rochovce

Brad

Rosia Poieni Rosia Montana

Kremnica

Recsk

Banksia Stiacnica

Volcanic Arc Sequences

Major epithermal and porphyry deposits of the Inner Carpathian Arc. Note that epithermal deposits occur within the areas of preserved arc-related volcanic sequences in deposit clusters.



Martha Hill Mine – Multiple Unexposed Veins and Alteration Vectors

The Martha Hill Mine started production in 1878 following discovery of outcropping veins. The Mine closed in 1952 having produced 5.6 Moz Au and 38.4 Moz Ag from 11.93 Mt of ore at an average recovered grade of 14.6 g/t Au. Over 160 km of access and production drives were excavated. The mine was reopened 1987 by Newmont. Martha is now an open pit, and together with the Favona Underground Mine, produced 108,000 oz Au and 522,129 Ag in 2010.

Adularia-Illite Alteration

Smectite Alteration

Illite-Smectite Alteration

0 m

Mary Vein

Royal Vein

Unaltered Ignimbrite

Martha Vein

-100 m

-200 m

-300 m

NOTE

• Multiple veins with strong structural control;

• Most veins not exposed at surface but alteration provides vector;

• Former high grade UG mine now mined as open pit by Newmont.

Brathwaite et al. 2006 Lower Miocene

Andesite

Early Pliocene Dacite

Martha Vein

Favona Mine

Current Open Pit

500 m


Geological Understanding Evolves Through Life of Mine ….

Outcropping veins at this LS epithermal mine in Mexico guided exploration and underground development. The lack of vein outcrop within the area of Miocene basalt suggested that the vein system did not extend into this region as evidenced by the location of the tailings dam. Once it was realised that the basalt was post-mineral, the prospectivity of this area was explored.

Tertiary Granite

Miocene Basalt

Veins at Surface

Underground Workings

Tailings

500 m


…. Leading to Increased Resources

Linear Chargeability High. Drilling confirmed silver-base metal vein

IP studies across the SE extension of the veins was conducted and chargeability anomalies were defined beneath the basalt cover. Subsequent development indicated that these veins are pyrite and base-metal rich thereby explaining the chargeability anomalies. Magnetite destructive alteration in the host granites indicates that ground magnetics would be an effective exploration tool. Similarly, elevated potassium response associated with sericite development also suggests that radiometric studies would assist with delineation of veins.

Tertiary Granite

Miocene Basalt

500 m


Sustained Drilling Required to Define High Grade Shoots

Although the vein system is over 2.5 km long, the ore bodies are discrete and lenticular, occurring on approximately 200 to 300 meter centres. Sub-economic and barren quartz veins occur between high grade ‘ore shoots’. Once a mineralized vein has been identified, sustained drilling is required to define the high grade shoots. This requires a robust understanding of structure which exerts a fundamental control on the distribution of the high grade zones. Note the vertical zonation from upper gold dominant to lower base-metal dominant veins. Typical mined grades were +1.5 g/t gold and +150 g/t silver.

Silver-Base Metal Rich

Quartz veins with stibnite and rhodochrosite at surface

-300

-200

-100

0

100

200

Gold Only

High Grade Gold and Gold-Silver ore-bodies with Classic Ginguro

Textures

Post-mineralization basalt cover

Long section of Mexican LS epithermal deposit

500 m


Caution – The Majority of Epithermal Quartz Veins are Not Mineralized

A basic premise of exploration for Low Sulphidation Epithermal deposits is that the entire system will be preserved beneath outcropping veins displaying upper level textures, mineralogy and geochemistry. However, many epithermal systems that do show these signatures at surface are not mineralized at depth – even within an existing mineralized property. Moreover, high grade mineralization typically occurs in high grade shoots that may require sustained drilling and structural understanding.

High level epithermal textures – But is the vein mineralized at depth ? If so where are the highest grade shoots ? Are there veins not exposed at surface ? How do you explore under cover ?

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Case Studies: Red Flags and Fatal Flaws



Underground Mine Review: Silver-Gold Epithermal: Mexico

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Documents

Understanding Low Sulphidation (LS) Epithermal Depositscdn.ceo.ca.s3-us-west-2.amazonaws.com/1d88pu0-LS...Cross-section through the Earths crust showing convergent plate boundaries