Fact Sheet, La Rosita Ag-Au Project, Santa Cruz, Argentina

 

The La Rosita Project (the Project”) of Minera Sud Argentina S.A. (MSA), a wholly owned subsidiary of Minsud Resources, is in Santa Cruz Province, Argentina.  The Project is a large exploration stage Middle to Upper Jurassic low-sulphidation epithermal Ag-Au prospect set in a bimodal volcanic suite in the Deseado Massif. The mineralization is typically associated with quartz veins, breccias and widespread silicification.

Mineral Land Holdings: Minsud subsidiary MSA owns a 100% interest in mineral rights that comprise the La Rosita Property, covering an unsurveyed area of some 9,970 ha or 99.7 km2.  In addition, the Company has recently filed an application for an Exploration Permit (Monte Ines) covering 3,422 ha or 34.2 km2 adjoining the northeastern part of the La Rosita Property.  Approval of the Monte Ines Exploration Permit (Cateo) application is still pending.

Location, Access, Physiography, Infrastructure: Access to the Property is good. The area is reached from the city of Comodoro Rivadavia, Chubut Province by 415 km of paved and unpaved highways.  There is daily scheduled air service to Comodoro Rivadavia from Buenos Aires.  The La Rosita Property lies in the arid to semi-arid Deseado Massif in the Patagonian region of southern Argentina.  This part of Patagonia has a continental, steppe-like climate that is arid and very windy.  Regional infrastructure is good with the town of Gobernador Gregores about 70 kilometers and a one hour drive southwest of the Property.

History: The La Rosita area was reportedly included in mineral exploration work circa 2002 by Yamana Resources and Barrick Gold.  In 2006 the area was open and acquired by MSA. There is little evidence of previous exploration work other than a few chip samples locations inside the current properties.  MSA currently has no records of historical programs.

Geology: The Deseado Massif consists of Paleozoic to late Precambrian metamorphic basement unconformably overlain by Middle to Upper Jurassic bimodal andesitic and rhyolitic volcanic and volcaniclastic and epiclastic units. Cretaceous sediments and Tertiary to Quaternary basalts overlie the Jurassic volcanics.

The key part of the paleotectonic setting in terms of Ag-Au mineral deposits potential is the Middle to Upper Jurassic bimodal volcanic suite set in an extensional back-arc environment related to the opening of the Atlantic Ocean.  The mineralization is typically low-sulphidation epithermal associated with quartz veins, breccias and widespread silicification.  Epithermal precious metals vein systems in the Deseado Massif are located along distinctive WNW and NNW structural trends proximal to rhyolite domes.

Regional Mines, Development and Advanced Exploration Projects: The project is located some 25 km N of the Martha Mine (Ex Coeur D’Alene, now Hunt Mining) and 35 km NW of from the Manantial Espejo Mine (Panamerican Silver). Other producing mines in Santa Cruz Province include: Cerro Vanguardia Mine (AngloGold – Fomicruz), Cerro Negro (Golcorp) and the San Jose Mine (Minera Santa Cruz / Hochschild – McEwen Minerals).  Additionally, several new projects are being readied for production including Don Nicolás (Ciminas), Cerro Moro (Yamana Gold), El Tranquillo (Patagonia Gold). Several advanced exploration projects are in progress.

Deposit Models: The Deseado Massif is characterized by Low-Sulphidation Epithermal deposits.  Most of the epithermal occurrences in the massif are hosted by felsic volcaniclastic rocks of the Chon Aike Formation of the Bahia Laura Group.

Epithermal deposits are formed at low temperatures and developed at shallow crustal levels.  Low-Sulphidation deposits are typically made up of open space quartz and/or chalcedony veins and to a lesser degree vein stockworks.  Disseminated and replacement mineralization is usually minor.  Characteristic textures include banded veins, breccia veins, drusy cavities, crustification, colloform, cockade, bladed and lattice texture.  Manganese carbonate (rhodochrosite), pyrite, electrum, iron-rich sphalerite, galena, arsenopyrite, silver sulphides and sulphosalts are also present in many veins.  Associated metals include gold, silver, arsenic, antimony, mercury, zinc, lead and selenium.  Other general geochemical characteristics include a high concentration of potassium, a high Ag/Au ratio and a low but ubiquitous concentration of copper.

Exploration Work Performed by MSA from 2008 to 2016: Initial clear title to the La Rosita property was granted to MSA as an exploration claim (Cateo) in May 2008.  Prior to conducting prospecting and exploration activities it was necessary to complete, file and gain regulatory approval for an Environmental Impact Report (“EIR”) which came about on May 2, 2011.  After the EIR approval, it was necessary to enter work permit agreements with local surface rights owners.  Initial approval for prospecting, geological mapping and geophysical surveying was attained on May 2, 2011 and expanded to include surface mechanical trenching and drilling on November 3, 2011.

The Company has conducted two early stage exploration programs between 2011 and the present; the first during 2011-2012 and the second in 2016.

During 2011-12 campaign, an early stage exploration program was performed, including:

  • a ground magnetometer survey covering some 16 km2 (320.3 line km),
  • detailed surface geological mapping at 1:2,000 scale over an area of approximately 6 km2, and
  • 3.5 line km of mechanical trenches (51 trenches) to define geological units, alteration features and as an initial test of potentially mineralized structures.
  • About 22 km of bush road construction was carried out to allow easy access the main target areas.

Initial reconnaissance work located prospective lithological units, interesting alteration and base/precious mineralized outcrops and float in the Los Mogotes Hill sector.  Systematic detailed geological mapping has been completed on a small part of the Alfa II mining claim, approximately 6 km2 including Los Mogotes Hill. The Chon Aike Formation exposures are indicative of a prospective environment for silver-gold mineralization.  The subaerial felsic volcaniclastic assemblage appears to be vent proximal in general setting, hydrothermally altered, and extensively cut by sub-volcanic felsic domes, volcanic necks and dykes, as well as various breccias.

A ground magnetometer survey was completed in 2011 in the south-western part of the La Rosita exploration claim. The magnetic survey and mapping program has defined a conjugate shear structural system, with maximum extensional effort coincident with the general strike of the outcropping mineralized veins. The magnetic survey also revealed three magnetic moderately high features, possibly linked to mineralized acid domes underlying the Mogotes Hill target.

The 2012 trenches did not encounter any mineralization sections that might be considered commercially significant in grade or thickness.  However, the trench analytical data has confirmed the existence of widespread areas of geochemically anomalous silver and gold as well as much larger zones of anomalous base metals (Pb, Zn, Cu) as well as the pathfinders mercury and arsenic.

Field work resumed at La Rosita in the latter part of February 2016.  Site reclamation work was completed after a final geological examination of the 51 mechanical trenches.  All trenches have been backfilled and the land surface is restored to its original contours.

In May 2016, eleven lines totaling 12 line kilometres of Pole-Dipole IP/Resistivity surveying were completed.  The survey identified several target areas that have been assessed in conjunction with previously obtained magnetic, geological, geochemical, structural and alteration data to plan a drilling program.  Priority targets with a close spatial relationship with known precious metal mineralization, have been identified at the Antenna and Sabrina Veins (Mogotes Hill), Felices Pascuas Breccia, Maria Sol vein (Cerro Bayo, Bajo Cobre, Encrucijada, Tramo Norte), and the Hormiga Vein (Cerro Solo).

Interpretation and Conclusions:

General Geological Interpretation Deseado Massif: From oldest to youngest, the paleotectonic setting comprises the following elements:

  • Basement: Permian to Triassic continental sedimentary rock deposited on Paleozoic to late Precambrian metamorphic basement of the Pangea supercontinent.  The Permian-Triassic period saw extensive continental rifting that eventually resulted in the breakup of Pangea into the seven continents of today.
  • Mineralization Sequence: The key part of the paleotectonic setting in terms of Ag-Au mineral deposits potential is the Middle to Upper Jurassic bimodal volcanic suite set in an extensional back-arc environment related to the opening of the Atlantic Ocean.  The mineralization is typically low-sulphidation epithermal associated with quartz veins, breccias and widespread silicification.  Epithermal precious metals vein systems in the Deseado Massif are located along distinctive WNW and NNW structural trends proximal to rhyolite domes.
  • Cover Sequence: Epicontinental sedimentary rocks of late Jurassic to early Cretaceous age occur at various places throughout the Deseado Massif. These unconformably overlie the Jurassic terrain.  The youngest consolidated rocks are Miocene to Quaternary continental flood basalts that blanket large parts of the region.  Finally, there are unconsolidated surficial deposits of Pleistocene to Quaternary age.

General Geoscientific Interpretation La Rosita Property: The exploration project is an early stage prospect with widespread indications of low-sulphidation epithermal Ag-Au mineralization.  The key interpretive aspects of the paleotectonic setting as they pertain to the Property’s exploration potential are illustrated in the diagram below (source Mirasol Resources) and summarized as follows:

  • Host Rocks: The Middle Jurassic Chon Aike Formation units include felsic volcaniclastic rocks including interlayered magmatic facies, sandy tuffs, tuffaceous sandstone, ash tuffs and ignimbrites.  The subaerial felsic volcaniclastic assemblage appears to be vent proximal in general setting, hydrothermally altered, and extensively cut by sub-volcanic felsic domes, volcanic necks and dykes, as well as various breccias.  Most known Ag-Au deposits and occurrences in the Deseado Massif are hosted by this assemblage.
  • Structure: The structural setting is typified by brittle deformational features associated with high angle faulting that produced a series of horsts and grabens. Conjugate high-angle extensional fault sets including a main regional system of NW trending left-lateral displacement structures, partnered with a conjugate set of NE trending right lateral displacement structures.  A variety of epithermal veins are aligned along the NE and NW trending conjugate structures, as well as NS or normal to the interpreted EW direction of dilation or tension.
  • Alteration: Low-sulphidation hydrothermal alteration below the water table grades outward from silicification and sericite-illite/smectite (argillic) assemblages into a broad zone of propylitic alteration. The upper part of the hydrothermal system or that part above the water table is characterized by the effects of steam-heating in the hanging wall of the primary host structure.  The hanging wall alteration includes a central vent facies breccia with a silica-kaolinite +/- dickite assemblage.  Moving laterally outward kaolinite +/- alunite and then kaolinite assemblages are encountered.  In this context alteration mapped at La Rosita would include widespread kaolinite +/- alunite features from above the water table as well as silicification and argillic alteration from below the water table.  Based on alteration signature Minsud considers the prime target area for commercially significant Ag-Au deposits to be at moderate depth.
  • Veins & Breccias: The variety of veins and breccias at La Rosita indicate a spatial/temporal assemblage that was emplaced at or near the paleo water table.  The low-sulphidation breccia matrix, veins and vein stockworks are characterized by the association quartz-amethyst-adularia-sericite-calcite-anhydrite-clays +/-hematite and/or manganese oxides with classical epithermal textures including open space colloform, crustiform, cockade, honeycomb, druzy and bladed textures. Metallic minerals include primary stage pyrite-chalcopyrite, sphalerite, galena, specular hematite, hematite, manganese oxides, argentite and native gold together with copper oxides malachite, chrysocola and azurite and secondary copper sulphides covellite and chalcocite.   Above the water table are opaline silica veins with fumarolic and steam-heated textural types.  Based on vein and breccia styles, Minsud again considers the prime target area for commercially significant Ag-Au deposits to be at moderate depth.
  • Trace Element Geochemistry: Analytical data from surface prospecting and trench sampling has confirmed the existence of widespread areas of geochemically anomalous silver and gold as well as much larger zones of anomalous base metals (Pb, Zn, Cu) as well as the pathfinders mercury and arsenic.  Additionally, anomalous values of tungsten and antimony were encountered in the system
  • Magnetic Survey: The magnetic survey together with geological mapping program has defined a conjugate shear structural system, with maximum extensional effort coincident with the general strike of the outcropping mineralized veins. The magnetic survey also revealed three roughly circular moderate magnetic high features, possibly linked to acid domes underlying the Mogotes Hill target.  It is also notable that known mineralized sections and areas of silicification and argillic alteration correspond to lower magnetic intensities.
  • IP/Resistivity Test Survey: The IP survey provides the first insight to the third dimension (depth) of the low-sulphidation Ag-Au mineralization target model at La Rosita.  The IP survey specifications, particularly the 25m dipole spacing is a compromise to optimize area covered vis a vis details of potential discreet high grade but narrow veins.  Also, the IP test survey has an effective coverage area of less than 2 km2 or approximately one sixth of the detailed work area.

 

Resistivity sections show a high resistivity bodies interpreted as siliceous/low porosity rocks, possibly including subvolcanic domes facies, silicified breccias and pervasive silica alteration.  Intermediate to low resistivity is interpreted as high porosity rock units, and represented by the volcanoclastic and ash facies, and rocks related to argillic alteration. Very low and “shallow” resistivity corresponds to modern soils and alluvium / colluvium cover. Sections are cut and disrupted by a high angle structural system dipping west, represented by a linear pattern with a relative decrease in resistivity relative to the host rock (sub-vertical structures with higher porosity / permeability than the host rock).

 

Chargeability sections show anomalies along the bottom of the sections, with elevated chargeability along the entire length of the lines. These anomalies are interpreted as the water saturation level or “redox boundary. In turn “water table” is laterally controlled by the prevailing structural system, defining blocks with different saturation levels. Also evident are several discreet sub-vertical anomalies related to the veins and structural system.  These are high priority drill targets. The moderate chargeability anomalies clearly illustrate the structural system control and are often coincident with the epithermal system in the outcrop.

  • Drilling: There are no known exploration drill holes on the La Rosita properties.

Recommendations: The coauthors’ recommendations for ongoing work on the La Rosita Properties encompass two main exploration/development objectives:

  • The main recommendation is the implementation of a diamond drilling program to test the southwestern part of the La Rosita Property where systematic exploration has been completed.  The program is designed as an initial test of specific epithermal veins for Ag-Au mineralization and to further define the basic exploration parameters (lithology, alteration, structure, mineralization, whole rock and trace element geochemistry, geophysical properties, etc.).  A ten to twelve holes program with a cumulative total of 3,000 metres is recommended
  • Systematic multidisciplinary exploration is recommended for the remainder of the large area of prospective mineral holdings as funding becomes available.

Mr. Howard Coates, Professional Geoscientist, Director of the Company and a geological consultant, is a qualified person as defined by Canadian National Instrument 43-101. Mr. Coates visited the property and has read and approved the contents of this Chita Valley project –Fact Sheet.

Details of the Chita Valley and other Minsud Projects are available on www.sedar.com and on the Company’s website www.minsud.com .

About Minsud Resources Corp:  Minsud is a mineral exploration company focused on exploring its flagship Chita Valley Cu-Mo-Au-Ag Project, in the Province of San Juan, Argentina. The Company also holds a 100% owned portfolio of selected early stage prospects, including 18,000 has in Santa Cruz Province, Argentina.

FOR FURTHER INFORMATION PLEASE CONTACT

Carlos A. Massa
President and Chief Executive Officer
(+54) 11-4328-4067
cmassa@minsud.com

-or-

Mike Johnston
(+1) 416-479-4466
mike@minsud.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:

This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, spending commitments, future operations, results of exploration, anticipated financial results, future work programs, capital expenditures and objectives. Forward- looking-information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in the Company’s TSXV Filing Statement dated April 27, 2011 under the heading “Risk Factors”. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking-information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

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