Melbourne-based explorer E2 Metals (ASX: E2M) has doubled its landholding in Argentina’s western Rio Negro province by exercising an option to acquire the El Rosillo gold project from local mining company Valcheta Exploraciones.
E2 now controls 1,638 square kilometres of mineral titles in the area, centred on the Vista Alegre, Ofelia, Paredes and El Rosillo properties.
Total consideration for the purchase of the option was approximately $102,000 plus 312,807 ordinary E2 shares and a 1% net smelter royalty (of which 0.75% will be capped at approximately $1.37 million).
Intrusion related gold system
Initial reconnaissance mapping and sampling at El Rosillo in March defined 12 mineralised prospects of possible intrusion related gold (IRG) affinity over an area spanning 100km known as the Comallo gold belt.
In July, a program of rock chip sampling at the Target 38 area recognised the IRG system over surface dimensions of 3km by 2km.
Mineralisation was found to be open to the east, north and west and best results were 80m at 1.8 grams per tonne gold; 20m at 2g/t gold; 20m at 1.2g/t gold; 80m at 11g/t gold; and 20m at 100g/t gold.
Rio Negro is host to the northern portion of the underexplored Somuncura Massif, which is a large volcanic province geologically similar to the Deseado Massif in Santa Cruz.
The Somuncura Massif is host to Pan American Silver’s Navidad project, based on the world’s largest undeveloped silver discovery hosting a resource of over 700 million ounces.
In February, E2 entered into an exclusivity option and confidentiality agreement with Valcheta to purchase the El Rosillo mineral title.
A once-off cash payment of $41,000 granted E2 the opportunity to conduct systematic surface exploration over a six month period to determine the potential for surface discoveries.
The results of exploration at the Target 37 and Target 38 prospects work were “very encouraging” and defined the previously-unrecognised gold system.
The mineralisation is associated with late Jurassic dykes, domes and stocks and was interpreted to be of IRG affinity.
E2 subsequently exercised its right to acquire 100% of the El Rosillo project.
The company is now working with the mining regulator and local stakeholders to finalise permits for a program of advanced exploration and drilling.
Work will include a detailed ground magnetics geophysical survey to map gold mineralised structures under shallow gravel cover and refine targets for drill testing once permits are received.