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(Sharecast News) - Orosur Mining updated the market on the progress of exploration activities at its flagship Anzá Project in Colombia on Friday.
The AIM-traded firm said the project was subject to an exploration agreement with Colombian company Minera Monte Águila (MMA), itself a 50-50 joint venture ("JV") between NYSE-listed companies Newmont Corporation and Agnico Eagle Mines.
It said MMA is the Colombian vehicle through which Newmont and Agnico jointly exercise their rights and obligations under the exploration agreement.
MMA is the operator of the project, after exercising its right to assume operational control in the second half of 2021.
Orosur said assay results for four additional diamond drill holes from the Pepas and Pupino prospects had now been received.
Both prospects are located in the northern region of the Anzá Project, roughly eight and 12 kilometres, respectively, north-northeast from the central APTA prospect that had seen most drilling at Anzá up until earlier this year.
Drilling activities commenced at Pepas in April, and at the nearby Pupino prospect soon afterward.
Assay results from the first six holes from Pepas were released on 6 September and 21 October, which included "thick, high grade gold intersections" in holes PEP001 of 150.9 metres at three grams of gold per tonne, PEP005 with 36.85 metres at 2.85 grams per tonne, and PEP007 with 80.55 metres at 3.05 grams per tonne.
"All three of these holes were drilled in different orientations from the same drill pad, with gold mineralisation starting from the surface," the board said in its statement.
"While the intersections were encouraging, the fact that the drill pad was positioned within the mineralised body, with holes drilling outward, was problematic in terms of being able to effectively define the shape and orientation of the body and so provide guidance for later drilling."
Two new drill pads were constructed around 200 metres southwest and 300 metres northwest, respectively, from the original drill pad, to drill holes PEP008 and PEP009.
Orosur said moving the rigs to the west was based on the assumption that the mineralised body dipped toward the west, and therefore the two holes were targeted at the presumed down-dip extension, vertically below the previous drilling.
PEP006 was the last of a group of earlier holes drilled some distance to the north of the mineralised body intersected at PEP001, and was drilled to a depth of 882m.
No significant gold intersections were encountered, but that was expected as previous drilling in the area at PEP004 was also negative.
PEP008, meanwhile, was drilled from the southwest toward the northeast to test directly below the mineralised intersections identified in holes PEP001.
The hole was drilled to a depth of 647 metres, with the step back for the new pad "substantial", such that PEP008 passed around 220 metres vertically below PEP001.
PEP009 was drilled to a depth of 602 metres, "well north" of the previously-identified mineralised body, and was intended to test an interpreted faulted offset extension of the Pepas body based on surface mapping and low-level gold mineralisation that had been previously intersected in hole PEP003.
Again, the step back was substantial, with PEP009 projected to intersect the targeted structures over 300 metres below previous drilling.
Both holes intersected mineralised structures, largely as expected, but with lower levels of gold mineralisation than intersected in previous drilling.
"Subsequent analysis and interpretation of drill core from these and previous holes has now suggested three distinct phases of structurally controlled veining, with the youngest phase being the polymetallic sheeted veining that produced the thick intersections of high-grade gold intersected at Pepas in earlier holes," the board said.
"It is also likely that these various vein systems have different orientations, with the most important potentially dipping away from hole PEP008.
"As a result, hole PEP008, being drilled from the west, may have been drilled under this important later structure."
PUP002 was meanwhile drilled to the south at the Pupino prospect to a depth of 301 metres to test several mapped structures that showed evidence of epithermal alteration.
The hole intersected several veins with sulphide mineralisation, but with no substantial gold anomalism.
As it previously noted, drilling at Pupino had ceased some time ago due to logistical difficulties and the need to develop new camp facilities.
The company said it had been informed that MMA had decided to temporarily suspend drilling activities at the project to focus on field mapping, sampling and trenching activities to define further drilling targets, including additional surface works specifically in the Pepas prospect area.
As it previously announced on 9 September, MMA had provided Orosur with a phase one earn-in notice, effectively notifying it of MMA's intention of moving to the second phase of the exploration agreement.
Orosur said the second phase would cover a maximum of four years, over which time MMA would be required to invest $20m in the project
As it previously noted, the process would entail the formation of a new mining company, the governance of which would be based on the existing exploration agreement.
The process was progressing on schedule, and was expected to be completed in the coming months.
"While these drill results are not as exciting as hoped, this is not surprising," said chief executive officer Brad George.
"Epithermal gold systems by their nature are complex and several phases of drilling are often required to properly define the geometry before more substantial drilling can then be undertaken.
"In the meantime, we continue the work necessary to create the corporate structure for the MMA-Orosur joint venture and hope to have this in place in the next few months."
At 1237 GMT, shares in Orosur Mining were down 32.78% at 8.57p.
Reporting by Josh White for Sharecast.com.
