Exploration Report

Exploration Report

This is an outline of the plan for exploration in gold bearing placer gravels in the Rio de Las Vacas at the confluence with the Rio Motagua in Guatemala CA.

The exploitation of the river beds in the surrounding region of the confluence of The Rio Motagua and the Rio de Las Vacas has a known history of more than two hundred years of gold production. The historical workings are usually known by the local population, passed to them by older, often deceased family and community members. The present workings are well known and artisan miners can be found any day in these two rivers washing placer gravels in small wood sluices. The old workings were hand dug addicts that burrowed into the existing river banks to access paleo placer deposits from ancient river beds that contain alluvial gold. These have been worked from historical to present times by small and large crews. Some of these found placer deposits at or below present river elevations; others found placer deposits up to 20 meters higher than the present river’s elevation. There is historic evidence of late 19th century era hydraulic removal of soils and quaternary cover, by the prevalent riveted pipe common in that time, found presently, in many places in a ten mile radius of the exploration target. There is a monitor tip in Los Ocotes at the house of the late Don Pancho a well known artisan miner.

Exploration done in the last three years by Edwin Chavez has included; dredging with a suction dredge for exploration purposes, excavation with both, a rubber tired Caterpillar excavator and a 320 Caterpillar track excavator. These efforts were successful in delineating the areas of interest and exempting specific areas, beds of gravels that don’t yield gold.

The many years of exploration of more than 100 sq Km., including both rivers and their surrounding banks cliffs and deltas and, on higher bench formations, by Mr. Chavez and a variety of associates known by him, have revealed considerable numbers of targets for paleo placer gold deposits. The historical and present workings indicate at least three episodes of paleo channel alluvial dissemination. One deposit is light yellow compacted paleo channel material. The deposit of dark blue is a classic paleo channel alluvial material and there is one deposit type of light gray/white material.

“Pancho” An area of extensive mining done on the north bank of the Rio Motagua named “Pancho” has been excavated with a 320 cat demonstrated the classic blue alluvial paleo channel material that has undergone geopaleo compaction and some consolidation but it’s not fused material. These banks are mined areas. They yielded considerable gold recently and historically, and yielded in studies undertaken by Mr. Chavez, very recently, one small pea sized nugget and some other grams of gold from washing 1 cu m of material excavated at the water line of the river from the compacted material of the river bank. The majority of the visible bank is not expected to bear gold today as this bank is a well known mined area from historical times. The more interior of this paleo material that forms the present day river bank is of interest. The local mine history relays that tunneling into the resource was done frequently. Exploration should include defining where is the underlying bed rock and mapping its grade from horizontal and the over lying compacted blue paleo placer material that is known to be gold bearing. The bank from the river has a steep incline. (Steep bed rock is not a good target area for placer gold. It doesn’t afford gold a resting place, freeing it to travel further until firmly settled in an alluvial bead with little inclination). Any lenses of blue material compiled in a depression in this bed rock that would have minimal inclination, that might be under this overburden of quaternary cover would be of extreme interest. To map this area, a series of conductivity tests and ultrasound penetration would reveal the lenses of paleo placer material guarded in a lens. This will prove to be much cheaper than removing overburden by washing the ground cover from a general area with a monitor and high pressure water that would help to define a very specific target, minimizing the excavation work. To excavate/push the overburden from above with mechanized equipment is an integral part of the program meant to be coupled with hydraulic excavation in conjunction with further delineating a defined mineral target.     G.P.S    POINT 149      RIO MOTAGUA   UTM NAD 27

                  ELEV 399M     NORTH 0780???
                                                   EAST       1645???  


“Doña Rosa” a zone of interest, is an alluvial gravel bed comprising an area of 500 m by 300 m., immediately across the Motagua and Rio de Las Vacas  and downstream from “Pancho”. This area is accessible and easily explored with a track excavator. The area immediately adjacent to the river is of some interest and has proven to hold alluvial gold. These are usually near large boulders. Open deep sandy areas have minimal gold because of flooding agitation. Further in shore from the Motagua and the Rio de Las Vacas on “Dona Rosa” the area is UN explored and needs to have multiple pits dug to bed rock to measure gold content in the alluvial material      there.                      G.P.S.    POINT 150  RIO LAS VACAS  UTM NAD 27

                                                          ELEV 416 M   NORTH 0780???

                                                          EAST 1645??? 

“Cueva” known on the IGN map as “los Encuentros” is a proven gold bearing paleo channel that was very recently mined and is now closed by the land owner. This channel 7 to 8 m wide and 1 m thick is a sediment of yellow consolidated but not fused rock bearing gold in quantities of up to 1 ounce per cu m. It disseminates alluvial gold immediately when exposed to water and is easy to separate from the consolidated paleo gravels. There is a volcanic tuff of more recent origin that covers the paleo placer channel with between 15 and 30 meters of quaternary cover. A team, associates of Mr. Chavez, was in the vicinity assessing the possibilities of mining the quaternary covered paleo placer stream. The resource size is thought to be very small and difficult economically because of the mountainous over burden. The mining to date done on site is by hand, tunneling into the face. It’s been a site of a lot of independent artisan miners, sometimes more than forty at a time. Associates of Mr. Chavez revealed up to 1 ounce of gold in a cu m from this material. This area should undergo hydraulic washing to remove the volcanic tuff overburden and expose the paleo channel and wash that material in a medium sized sluicing system. This area will require advanced engineering skills to succeed in the extraction at a profitable level.
                                    G.P.S   POINT 151   RIO MOTAGUA  UTM NAD 27

                                   ELEV 396 M    NORTH  0780???

                                   EAST 16?????

The three areas listed are included in the area controlled by license application for mineral exploitation that belongs to COMPANIA DE MINAS DE LEA S.A.

“El P” (El Peñasco) is a very promising area that Mr. Chavez knows and he has associates who know it very well. It is a former mine site similar to “La Cueva” and has had mining history for many years. Larger Nuggets are known to come from this site. This is an area of high interest. It is a classic blue consolidated rock, paleo placer river bed. It is extremely hard material that frustrates the efforts of the artisan miner’s use of bar and hammer to extract the material. This area requires further study and should be undertaken by an experienced exploration team.

Cost projections:

The recovery of the alluvial gold from these materials requires a gravity wash trommel or sluice box, and excavation equipment similar to the equipment mentioned above being used in the exploration. The daily cost of mining with this equipment is estimated to be 1500 dollars depending on usage of machines and volumes of material moved.

Over burden removal is a major expense that involves clearing non gold bearing soils and quaternary cover to expose gold bearing material for washing. Gold values and over burden depth define what is economical to mine.

Three target areas are available to date but all three require more exploration to define better the resource value in size and in concentration of gold per ton. All of these areas are known to have gold in concentrations of a gram or more per ton but the continuity over a large area is not known and requires more exploration. Approximately 40 grams per day of gold is needed to be mined in order to pay for daily mining costs. (1.25 ounces at 1200 dollars an ounce) or 1600 dollars per day. One ton of material is approximately 1 cubic meter. If the machinery loads and washes 50 cubic meters an hour, times 8 hours of daily running time, the estimate is then 400 grams per day or roughly 15 ounces per day or 16,000 dollars per day. Between these two figures is the operations daily estimated running revenues. Fewer than 1600 dollars per day for a prolonged period will cause it to close and seek a new resource. Any production at 16,000 dollars per day is spectacular and is not seen realistic expectations for resource values. In between these two numbers of 1600 and 16,000 is where the real production will lie. Before we enter into a commitment to this production program the resource needs to be measured and estimated.

The second consideration is size of resource available. The “Cave” resource is rich but small. It is estimated to be 4 grams per ton but is only 7 meters wide and possibly 100 meters long and 1 meter thick. It’s buried under over burden ranging from 10 meters to 30 meters. Its 700 cubic meters at 4 grams per meter =2800 grams or 90 ounces at 1,200 dollars an ounce=$108000. This requires further exploration to reveal if there is greater gold concentration than that of 4 grams per ton, and if the resource size enlarges under the hill of volcanic tuff that covers it. This area can be a producing area. It contains gold resource that can be mined. Hydraulic removal of the over burden is the most efficient way to expose the deeply buried paleo channel. A large pump hose and monitor and unlimited source of water are all that is required…flooding the hill and gravity do the rest.

“Dona Rosa” is now a river bed since the flooding. The flooding has excavated quaternary cover of up to 10 meters thick overburden. Dona Rosa now has cliffs exposed that had quaternary cover 30 days before and they need to be investigated. If there are paleo channels there they will be discovered soon. The placer gravels deep under and around the larger boulders are going to be of interest and may contain alluvial gold. There are high benches as well in Dona Rosa and these have similar material that may be paleo channel hidden under over burden. “Pancho” across the river from Dona Rosa has a known paleo channel that has under gone mining for more than 100 years. The paleo channel is deposed over an undulating bed rock buried under a cliff of volcanic tuff overburden 10 m high. This needs investigation. It could easily have its potential to bear paleo placer material qualified by using Ground Penetrating Radar (GPR) mentioned above; to indicate if and where the undulating and inclined bed rock flattens to cause a basin or “caldera” that would afford a trap for placer gold deposits. GPR would also eliminate the areas that showed to be too steeply inclined bead rock under the volcanic tuff, as areas where alluvial material could not have come to rest. Dona Maria could benefit from GPR technology as well. Cost of GPR varies but for areas of the magnitudes mentioned an estimate would be 5000 dollars for two days of intense survey. GPR, much cheaper than exploratory excavation has limits where boulders mix with the gravel and where wet moisture retaining soils inhibit signal flow, but works extremely well in most of the areas mentioned with the exception of part of Dona Rosa area, where the Vega is full of boulders and would hinder the signal. Those areas need to be exposed by trenching with a dozer to test bed rock gravels under boulders for gold content.

125 dollars an hour for a dozer and a 320 Cat excavator are considered adequate compensation for machines of that size, operator and fuel. These prices are usually based on whole days of machine use. To get better machine use and flexibility to stop and examine material during exploration, ownership of the machine other than hourly/daily rental is preferred.

A monitor hydraulic system with high pressure pump, (four inches or more diameter outlet) should be developed for assistance in these proposed excavations. Water erosion with gravity combined with the high pressure water stream is usually ten times more efficient than mechanical equipment… (And ten times less expensive).

“El Penasco” as mentioned above, has paleo channel deposits with large gold. An exploration plan should be carried out there in the near future with an excavator. El Penasco has a long history of mining some of it recent and it is a known source of larger gold nuggets. The paleo channel material there has consolidated but is not a conglomerate. The hardness frustrates the hand mining efforts and requires mechanization and removal of over burden to open the resource to the sky and affect a more economic extraction plan than tunneling by hand. This can use hydraulic method as proposed for the “cave”, to wash off over burden. This resource is unknown size and is considered the best target by Mr. Chavez and Associates. A 320 Cat excavator working for four days and exposing paleo channel bring gold at El Penasco would refine the estimates of gold quantities held in paleo channel materials there. This area is thought to be of “highest” potential.

Appraisal includes known areas that are gold bearing on the two mentioned rivers. Downstream on the Motagua River is a potential strong resource area as well.

By: Edwin M. Chavez

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