The Hualilan project has been drilled at various times since the 1970s but new owner Challenger Exploration (ASX: CEL) has reported new ‘bonanza’ grades which it says are the highest ever reported there.
First rock saw channel sampling results include 15.6m at 70.9 grams per tonne gold, 59.1gt/ silver and 0.2% zinc, including 4m at 201.6g/t gold and 172g/t silver.
Challenger managing director Kris Knauer described the 4m at 201.6g/t interval as “outstanding”.
The channel sampling was carried out to extend from ground level into the Hualilan Hills.
Hills yet to be drilled may contain strongest mineralisation
“The results confirm our view that the strongest mineralisation is likely to be in the Hualilan Hills, which are yet to be drilled,” Mr Knauer added.
“Mineralisation is mapped in outcrop in the Hualilan Hills over 1.4km of strike and there is [a length] of 200m to 300m which is undrilled up-dip from our current drilling, which suggests this exciting bonanza grade target could deliver a material increase in size.”
Other assays returned included 64.8m at 23.4g/t gold, 104.1g/t silver and 8.3% zinc (including two higher grade intervals); 5.4m at 30.9g/t gold, 83.9g/t silver and 8.4% zinc; and 24.1m at 16.9g/t gold, 37.8g/t silver and 5.8% zinc (also with a higher grade interval).
The Hualilan project consists of 15 mining leases and an exploration licence application covering the surrounding 26sq km in San Juan province.
Historical drilling goes back more than 40 years
Challenger notes that Hualilan has had extensive historical drilling with more than 150 holes dating back to the 1970s.
The property was last explored by Toronto-listed La Mancha Resources in 2004.
That work produced a resource estimate of about 627,000 ounces of gold at 13.7g/t.
The most recent metallurgical work in 2000 indicated 80% recoveries of gold and silver via a simple flotation operation plus production of a 50% zinc concentrate stream.
Challenger’s latest results come from 300m of strike and extend mineralisation 100m up-dip from drilling at the Cerro Norte target.
The company plans to acquire another rig to drill out this potential zone of bonanza-grade mineralisation.
Mr Knauer said the strategy remains to deliver a high-grade shallow resource that the company hopes will enable a low capex operation.