Tesoro confirms high-grade potential of Espina gold project, moves to 70% equity at El Zorro

Tesoro Resources ASX TSO rock chip sampling gold Chile
Rock chip sampling at Espina has confirmed high-grade epithermal gold mineralisation at surface along two kilometres of strike.

An extensive fieldwork program by Tesoro Resources (ASX: TSO) at the Espina gold project in Chile has identified a new large gold target and confirmed the potential for large-scale, high-grade gold mineralisation.

Conducted in late 2019, the program collected a total of 130 rock chip and channel samples and 441 soil samples to assess previously-identified gold mineralisation along the Puertelera and Infernillio structures at Espina.

The results delineated near-surface zones of strong gold mineralisation along Puertelera and a large gold in soil anomaly at the northern end of Infernillio at the newly-defined Dona Clara target.

High-grade assays included 1 metre at 10.65 grams per tonne gold, 2m at 7.31g/t gold, and 3.7m at 1.75g/t gold.

Soil samples at Dona Clara returned values of greater than 0.25g/t gold, with coincident silver, copper and lead.

Managing director Zeff Reeves said the surface results reinforce that the Espina project is highly prospective.

“They demonstrate the extensive strike of the mineralised structures and importantly the geochemical signature tells us the gold-rich portion of the [Espina epithermal] system appears to be preserved and has not been eroded away,” he said.

“This further enhances the project and we will continue to focus on the resultant stronger zones of the system to delineate drill targets.”

Earlier exploration

A 2018 detailed surface exploration program at Espina collected 1030 rock chip and soil samples on a 50 metre x 50 metre grid, covering an area of approximately 3.8 square kilometres over the Puertelera and Infernillio structural trends.

That program identified strong gold anomalism and outcropping epithermal gold-bearing veins associated with the mapped Puertelera and Infernillio structures and returned results of up to 69.30g/t gold.

In late-2019, follow-up fieldwork extended the soil grid by approximately 850m to the north along outcropping epithermal veins and collected a further 441 soil samples.

Limited channel sampling was conducted due to soil cover obscuring the veins.

Results confirmed the Puertelera structure contains multiple gold mineralised epithermal quartz veins with adjacent gold-associated breccias and stockwork over 2 kilometres of strike.

In addition, several sub-parallel veins were discovered and returned positive gold results.

Tesoro plans to continue exploration at Espina with the aim of delineating future drill targets.

New work will include trenching across prospective mineralised zones along the Puertelera trend and at Dona Clara to obtain controlled bedrock samples and provide detailed geological information.

El Zorro equity

Tesoro was established with a strategy of acquiring, exploring and developing mining projects in the Coastal Cordillera region of Chile.

Last month, the company announced it would increase its equity in the flagship El Zorro gold project in northern Chile to 70%, via its 95%-owned subsidiary Tesoro Mining Chile SpA.

Tesoro originally entered into a purchase option agreement to acquire El Zorro in 2017 and has earned a beneficial 51% interest since then.

Under the revised terms, it will proceed directly to 70% ownership of the project with no further expenditure commitments, by issuing 5,000,000 shares to the project’s joint venture partner and bringing forward a US$50,000 cost reimbursement payment.

In order to reach 80% ownership, Tesoro will be required to make a final US$50,000 Stage 4 project payment by January 2022 and deliver a feasibility study.

Drilling commenced at El Zorro in February and aims to extend the mineralised zone at the Coquetas target which has previously reported multiple, wide, high-grade gold intercepts.

To date, six diamond drill holes have been completed for a total of 1535m, with assays from the first hole revealing thick high-grade gold intercepts.

Capital Management

In response to global market uncertainty and the COVID-19 pandemic, Tesoro has undertaken a detailed review of its work plans and budgets to ensure it continues to add value to its projects.

Mr Reeves said the company has put measures in place to ensure prudent use of capital.

“We agreed to move to 70% ownership of El Zorro with no further expenditure commitments required which enables us to focus our exploration effort and further delineate that project’s large emerging gold system,” he said.

“We are also reviewing our exploration and contractual commitments at Espina to ensure we are in a sound financial position going forward.”

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