Newstrike Geology 101
Newstrike Capital Geology 101
Common issued and outstanding 82,570,638
Stock Options 4,400,000
Warrants 7,072,500
Fully diluted 94,043,138
Cash on Hand $4.3 million
I’m sure everyone has heard the saying “the best place to find a new mine is next to an old one.”
I would add to that “the best people to find a new mine are the ones that found the last one.”
Members of Newstrike’s management team were instrumental in conceiving of and developing the GGB exploration model. These people are responsible for discovery of over 8 million ounces of gold in multiple deposits in Guerrero, Mexico. The mine is the Los Filos operated by Goldcorp. It is the largest mine in Mexico and produces over 300,000 ounces annually. The cash cost is 460/oz, with an average grade of .63 g/ton gold. There are over 6 million ounces of reserves at Los Filos.
Guerrero Gold Belt (GGB)
Newstrike controls a strategic land position of over 88,000 contiguous hectares within the Guerrero
Gold Belt (the GGB), a significant, emerging gold camp located in the State of Guerrero, Mexico,
roughly half way between the major population centers of Mexico City and the Port of Acapulco.
Discovery of gold in similar settings regionally led to the development of a predictable exploration model along a trend that became known as the Guerrero Gold Belt. The GGB is a series of intrusions that follow a 55 Km NW trend of magnetic anomalies. Each intrusion shares a common origin. All gold mineralization discoveries in the GGB occur
in clusters around these intrusions.
Gold mineralization in the GGB is known to outcrop over the 55 kilometer northwest trending axis and remains open for exploration in all directions with significant potential for new discovery.
Each gold deposit currently defined within this trend
contains an excess of 3.0 M oz Au, including Los Filos and El Limon (Morelos Project).
Ana Paula is the newest gold discovery in the GGB.
Ana Paula is consistent with the same gold-skarn
porphyry mineralization model that forms the
dominant style of known deposits within the GGB.
Newstrike is focused on advancing Ana Paula.
Some important definitions
Mineralization
The presence of minerals of possible economic value – and also the process by which concentration of
economic minerals occurs.
Alteration
Physical and chemical changes to the original composition of rocks due to the introduction of
hydrothermal fluids, of ore-forming solutions, to changes in the confining temperature and pressures or to any combination of these. The original rock composition is considered “altered” by these changes,
and the product of change is considered an “alteration”. (From Hacettepe University online dictionary, after AGI)
GGB The Guerrero Gold Belt. A linear array of gold-iron skarn and gold skarn developed at the contacts
between platform carbonate rocks and early Tertiary intrusions.
Intrusion
(1) The process of magma injection into the body of rock that forms the earth’s crust. The solidification of such injected magma leads to the formation of intrusive rock.
(2) An intrusion is a geological body composed of igneous rock and formed in the process of injection and solidification of magmatic melt in the earth’s crust (intrusion, intrusive body, plutonic intrusion).. Intrusions are classified according to the depths at which the magmatic intrusion occurred as deep-seated intrusions (abyssal) and shallow-depth intrusions (hypabyssal). In this context the conditions of cooling of the magma and its effect on surrounding rock differ sharply. At shallow depths the cooling is rapid and fine crystalline or porphyritic rock is formed, and contact metamorphosis affects a small area of the country rock. At great depths medium-grain and large-grain rock and major changes in the surrounding rock are characteristic.
Porphyry
The term porphyry is also used for a mineral deposit called a porphyry. The different stages of cooling which creates porphyritic textures in intrusive hypabyssal porphyritic rocks also leads to a separation of dissolved metals into distinct zones. This process, which is produced primarily via fluids driven off the cooling magma, is one of the main reasons for the existence of rich, localized metal ore deposits such as those of gold, copper and other economic metals in the world. This enrichment occurs 1) in the porphyry itself, 2) in other related igneous rocks or 3) in surrounding country rocks, especially carbonate rocks.
Skarn
A metamorphic rock rich in calcium bearing silicate minerals (calc-silicates), commonly formed at or
near intrusive rock contacts by the introduction of silica rich hydrothermal fluids into a carbonate rich
country host rock such as limestone and dolomite. Also, part of an alteration process for the
introduction and formation of ore forming mineralization and a common host for mineralization/ore.
Breccia
Means fragmental rocks whose components are angular and, therefore, as distinguished from
conglomerates as not water worn. May be sedimentary or formed by crushing or grinding along faults or by hydrothermal explosions.
Epithermal
Said of a hydrothermal mineral deposit formed within about 1 km of the Earth’s surface and in the
temperature range of 50 to 200 degrees C, occurring mainly as veins. Also, said of that depositional
environment.
The Ana Paula Property is situated on the northwest trend of the GGB. The western portion of the project area is underlain by the volcano-sedimentary stratigraphy of the Teloloapan Sub-terrane.
It is host to several known VMS style massive sulphide deposits, including the Campo Morado-Campo Seco trend (La Reforma, El Rey, El Largo, El Naranjo and the producing G9 deposits), and Rey de Plata (Miranda-Gasca, 2001). The eastern portion of the project area, is underlain by interpreted Guerrero-Morelos Platform stratigraphy, a principal host for the
gold mineralization associated with the GGB. The region displays a highly deformed structural environment that affected the emplacement of the GGB intrusions and subsequent mineralization.
The region was intruded by a series of stocks, dikes and sills during the Late Cretaceous (age date of 66.2 Ma). The intrusions are primarily tonalite, monzodiorite, and granodiorite in composition and are part of a gold bearing iron skarn-porphyry mineralizing system, that is considered the source for gold mineralization regionally.
Gold deposits of the GGB occur within structural conduits and as contact alteration halos formed about
and within these intrusions.
As presently understood, gold mineralization in the Ana Paula Property occurs as disseminated, stockwork, structurally controlled, and as replacements types.
Gold mineralization in this environment occurs in a variety of settings, primarily as discrete grains associated with, but independent of arsenopyrite
mineralization. On an outcrop scale gold is most often found with silicification, and
argillic alteration. On a project scale gold mineralization may occur in dominantly
potassic-altered zones along structures as at San Jerónimo. However, gold mineralization at El Tejocote is related to late northeast fault zones with less silicification.
The most important mineralogic association with gold is arsenic.
The oldest structures cutting all rock units are north-south to northeast trending west dipping east-verging thrust faults. Field mapping both on the Ana Paula Property and on the surrounding Aurea Norte Project suggests that the east directed compression
resulted in north striking folds that in many areas are recognized as recumbent. Within this structural block almost all gold mineralization is hosted in quartz monzonite, and Teloloapan volcanic, volcaniclastic, and carbonate units. The central part of the Apaxtla
3 concession at San Jerónimo is cut by swarms of north-south trending normal faults,
which probably indicates a broad ruptured, axial plane or planes. North-south faults controlled the emplacement of the granodiorite sills and the density of north-south faulting and sills lessens away from this central axis. Swarms of younger northeast
southwest striking right lateral, transtensive faults indicate multiple episodic movements.
These younger faults crosscut and offset the north-south structural blocks and partially define the contacts of the younger quartz-monzonite. The intersecting north-south and
northeast-southwest intersecting structures have isolated and rotated discrete, fault-
bounded orthogonal blocks. Medina (2010) reported that virtually all northeast- southwest faults are mineralized. Faults and related breccia zones acted as conduits to mineralizing fluids which were partially channeled along sill margins.
As presently known, the most important control to gold mineralization at Ana Paula is north-south and northeast-southwest structures, which occur within northerly trending east verging thrust slices. There is potential for significant gold mineralization north, and
south of existing drilling at San Jerónimo and west at El Tejocote. The area tested by 11 diamond drill holes at San Jerónimo in 2005 is roughly 400 m by 600 m within a broader gold anomaly with approximate dimensions of one km by two kms. Investigation of possible gold mineralization on the Tembo Dos, and Tembo Tres concessions is at a
very early stage so no meaningful conclusions can be made regarding potential on these
claims.
Additional drilling to date has confirmed the presence of a large mineralized system.
Assay results indicate that higher-grade gold mineralized intercepts tend to occur at contacts between intrusive rocks and altered sediments, and that thick lower-grade disseminated and stockwork mineralization occurs within sills or dikes, and locally within hornfels. Mineralization is associated with a series of stacked intrusions that intrude siliciclastic and carbonate sediments, a setting that is typical of the Guerrero gold belt skarn porphyry model for mineralization.
A large body of mineralized complex breccia was also recently discovered at the Ana Paula project.
Results demonstrate an important potential to host multiple gold-bearing intercepts over wide mineralized intervals that show good continuity both across and down the section, with excellent predictability from a planning perspective. This, along with improving grade and thickness to the west and southwest, speaks to the large volume potential developing at Ana Paula.
Drilling is under way in 2011 with two drill rigs that started on Jan. 12. Drilling continues with the planned program of step-out and infill drill holes.
