Desert Star Resources to Acquire Iron Butte Oxide Gold-Silver Project, Nevada
Published: March 16, 2017 |
Desert Star Resources Ltd. has entered into a letter of intent whereby it can earn 100 percent interest in the Iron Butte oxide gold-silver project located in Ladner County, north-central Nevada, approximately 60 kilometers south of Battle Mountain. Access and infrastructure to the project is excellent with power lines and state maintained roads within 4 kilometers of the property.
“We see excellent potential to significantly increase the oxide gold-silver mineralization at Iron Butte by drilling south of the Red Ridge mineralized zone as well as the East and South Zones. An additional 3 kilometers of strike, along the same and similar, north-south and east-west structures that host the gold-silver mineralization are currently under-explored with little or no drilling to date,” said Vince Sorace, president and CEO of Desert Star.
Mineralization at the Red Ridge zone is outcropping at surface and contributes to the majority of the historically estimated oxide gold-silver resources. Three additional zones called the North Zone, South Zone and East Zone have all intersected similar styles of mineralization. Gold-silver mineralization is believed to be controlled by a series of north-south, north-northeast and east-west structures that host silicification and epithermal quartz-pyrite-gold-silver mineralization within Pennsylvanian to Permian siltstones and argillites of the Cedars Sequence and Tertiary felsic volcanic rocks. Mineralization is completely oxidized from surface up to 175 meters depth and continues as sulphides to depths beyond 250 meters. Mineralization is also disseminated between veins, silicified structures and brecciated zones, and can occur as silicified breccia zones at the contact between volcanic and underlying sedimentary rocks. Mineralization is thought to be epithermal in nature with some similarities to sediment hosted Carlin type gold systems with jasperoids and opaline silica present.
Historical drilling was conducted between 1980 and 2009 by Homestake, Cameco, Newmont, Newcrest and C3 Resources, and included 211 reverse circulation (RC) drill holes totaling 31,614 meters. The results of the drilling indicate that a broad zone of gold-silver mineralization exists over an area 2,900 meters long, parallel to the range front, and 1,300 meters wide. Drilling to date has not delineated the full extents of the mineralized zones nor has it tested the potential for sediment-hosted mineralization at depth. Preliminary metallurgical work carried out by Aurelio Resources in 2009 consisted of simple bottle roll tests conducted by ALS Chemex labs and indicate that the oxide material leaches while the sulphide material does not. The project has remained dormant from 2010 until 2017.
Desert Star has mobilized field crews to expand the size of the Iron Butte property. The company will continue to compile the historical data to create a new robust geological model on which to identify drill targets to be tested during H1 2017. Numerous untested exploration targets present on the property include:
• Over 3 kilometers of additional strike length of mapped north-south, north-northeast and east-west structures which host the gold-silver mineralization in the Red Ridge zone.
• Over 1.5 kilometers of contact zone between the Tertiary volcanic rocks and basement sedimentary rocks including several areas where structures intersect the contact.
• Untested anomalous mercury rock samples in the south-eastern part of the project.
• Potential across the property to delineate additional zones containing higher grade gold-silver mineralized veins similar to those intersected within the Red Ridge zone, such as 1.52 meters @ 7.48 g/t Au in NC-31 and 12.15 g/t Au in a rock chip sample from a road cut at Red Ridge.
• Expansion of gold-silver mineralization intersected in several drill holes at the East Zone that remains open in all directions and further drill testing around the mineralized intercepts at the South Zone.
In addition to the exploration potential which could significantly increase the oxide gold-silver mineralization at Iron Butte, Desert Star believes there is an excellent opportunity to determine the economic viability of the existing oxide gold-silver mineralization identified to date by defining a NI 43-101 compliant resource, conducting metallurgical studies and ultimately producing a PEA on the project.
The Letter of Intent provides for a 45 day exclusivity period, during which the parties will endeavor to execute a definitive purchase agreement by March 31, 2017 and close the transaction by April 17, 2017.
Desert Star can earn a 100 percent interest in Iron Butte by making a total of US$1,000,000 in cash payments and issuing 1,500,000 shares in Desert Star over 6 years. If a positive production decision is made regarding Iron Butte, Desert Star will pay a further US$1,000,000 and issue an additional 500,000 Desert Star shares. The vendor will also receive a US$500,000 payment for every 1,000,000 ounces of gold production and US$500,000 payment for every 10,000,000 ounces of silver production at Iron Butte. The vendor will also retain a 2.5 percent NSR subject to buy down provisions of US$1,000,000 for the first 1 percent and US$1,000,000 for an additional 0.5 percent.
To read more details in the company’s press release, CLICK HERE
About Desert Star
Desert Star is a Vancouver-based mineral exploration company focused on the identification, acquisition and development of copper and gold projects located in top-tier mineral belts in the southwestern United States that contain significant historical production, existing mining infrastructure and an established mining culture.
To stop by Desert Star’s website, CLICK HERE
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