Mining Intelligence and News

Caballo Blanco - La Paila Project

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Mine TypeOpen Pit
StagePreliminary Economic Assessment
  • Gold
  • Silver
Mining Method
  • Truck & Shovel / Loader
Mine Life... Lock
SnapshotThe Caballo Blanco licence area is located on the eastern coast of Mexico in the state of Veracruz. The most advanced project in the licence area, La Paila, was subject to a PEA in 2012 which envisaged a low CAPEX, conventional open pit and heap leach mining operation targeting approximately 100,000 ounces of gold production annually. Further geological and exploration works by the Company since acquiring Caballo Blanco have included an updated pit-constrained resource estimate for La Paila (NI43-101 Technical Report, April 2017), and additional exploration activities in the wider licence area.

Activities during the 2023 financial year included continued exploration activities in and around the priority targets within the licence area, ongoing refurbishment and upgrades to core storage facilities and other infrastructure, and continued engagement with local community groups.


Candelaria Mining Corp. 100 % Indirect
Minera Caballo Blanco S.A. de C.V. is a 100% wholly-owned Mexican subsidiary of Candelaria Mining Corp.



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Deposit type

  • Epithermal
  • Vein / narrow vein
  • Porphyry


The Caballo Blanco property and Almaden Minerals neighboring El Cobre property includes at least two distinct deposit types, defined as high-sulphidation epithermal gold and porphyry copper gold respectively.

La Paila zoned advanced argillic alteration is typical of high sulphidation epithermal gold mineralisation, in which gold is preferentially localised within the core silica zone. Much of the coarse grained vuggy silica has developed by the pseudomorphous leaching of coarse porphyritic andesite. By contrast massive silica dominates within fine grained protore rock types. While much of the massive silica is barren, pseudomorphous pervasive vuggy silica displays low Au grades in the order of 0.1-0.2 g/t Au, progressively rising within brecciated vuggy silica, to 1 g/t Au, especially where proximal to fluid plumbing systems.

The Caballo Blanco property lies at the eastern end of the Trans Mexican Volcanic Belt and is underlain by sub-aerial basalts, andesites and diorite dykes of Miocene age that are in turn covered by a sequence of felsic quartz tuffs, andesitic ‘dome’ complexes, volcaniclastics and younger intrusive dacitic plugs. Capping the volcanic package are Pliocene alkaline basalt flows that are commonly well preserved as small flat highland plateaus.

At least two large areas of epithermal precious metal occur within the current Caballo Blanco property, referred to as the Northern Zone and Highway Zone. Gold and silver mineralization is confined to altered varieties of upper Miocene andesitic domes and dacitic intrusives.

Northern Zone – High Sulphidation Epithermal Gold Targets with massive silica ledges
Geological mapping, rock chip sampling, geophysical surveying and core drilling have identified a large area of silica and associated silica clay alteration within an andesitic dome complex along the northern portion of the property. Altered feldspar andesite that hosts gold mineralization is spread over an area of 5 by 4 kilometres and occurs in close association to a prominent magnetic ring structure with at least five prominent silica caps forming distinct 600-meter-high hilltops.

Rock exposures in these areas include mixtures and overprints of classic vuggy, brecciated and or massive silica with associated and flanking haloes of advanced argillic to argillic alteration. These diverse clay alteration zones have been identified and mapped in part using a TerraSpec® spectrometer. Drill testing at three of these ‘silica cap’ features, La Paila, Bandera, and La Cruz, suggest that acid leaching from hydrothermal fluids extend to depths of over 300 meters. The Red Valley target lies at lower elevations on the outside fringe of the circular ring feature and has been identified with soil geochemistry.

Corbett (2011) describes targets within this Northern Zone area as follows; “La Cruz - Las Cuevas - La Bandera zones of advanced argillic alteration are dominated by barren silicification classed as barren shoulders. La Paila zoned advanced argillic alteration is typical of high sulphidation Au mineralisation, in which Au is preferentially localised within the core silica zone. While much of the massive silica is barren, pseudomorphous pervasive vuggy silica displays low Au grades in the order of 0.1-0.2 g/t Au, progressively rising within brecciated vuggy silica, to 1 g/t Au, especially where proximal to fluid plumbing systems.”

Highway Zone – Low and High Sulphidation Epithermal Gold Targets
This area is roughly 3 kilometres by 4 kilometres in size and is located along the eastern edge of the Caballo Blanco Property where road cuts for the Pan American Highway first exposed strong argillic alteration and small quartz veins that form part of the original discovery in 1995.

Here alteration of the local dacitic tuffs and volcaniclastic host rock is like the Northern Zone, but located approximately nine kilometres further to the south and southeast. Geophysical and geochemical surveys suggest that high resistivity, extensive silica and silica-clay alteration and various geochemical gold anomalies associated with Ag, Zn and Pb as well as gold anomalies associated with As and Ba coincide with recognized ‘signatures of both low and high-sulphidation epithermal systems respectively.

Several areas of vuggy silica alteration have been identified by geophysical and geological surveying in the southern area of the Highway Zone, however the area remains under-explored and is a valid exploration target for future work.

Corbett (2011) described the following. “Low sulphidation epithermal Au mineralisation is interpreted to occur at Highway North, La Luz NE and La Luz South, from the illite-dominant style of clay alteration and metal ratios, in which Au is associated with Ag, Zn and Pb rather than As and Ba. Highway North should be first targeted at a high priority. Two small high sulphidation epithermal Au drill targets occur within the Highway South advanced argillic alteration.”

Encouraging drill core assays from hole CB02-7 drilled by Noranda in 2002 and collared in ‘flanking’ clay alteration and vuggy silica intersected a gold bearing zone grading up to 2.52 g/t gold over 3 meters close to the bottom of the hole. Other isolated resistivity anomalies approximately two kilometres to the north of this drilling suggest significant potential remains open for additional work.

Alteration and Property Mineralization
In the Northern Zone and Highway Zone, epithermal gold mineralization is associated with vuggy silica breccia surrounded by large and distinct haloes of various mixtures of clay alteration including alunite, dickite, pyrophylite, kaolin and illite. These diverse clay alteration zones have been identified and mapped in part using a TerraSpec® spectrometer.

The elongate and silicified gold rich mineralization at La Paila in the Northern Zone likely formed from hydrothermal fluids rising along a north trending fault structure well above a deeper differentiated intrusive ‘heat source’. Gold at La Paila is interpreted as ‘high sulphidation’ epithermal gold mineralization. The gold here is very fine and occurs within vuggy and brecciated silica alteration of the original andesitic flows and domes. The mineralization is clean and has little if any mercury or arsenic signatures. Drill core intervals contain significant gold mineralization with assays up to 2.19 g/t gold over 89.91 meters (08CDN-04).

Areas within the Highway Zone exhibit both illite dominated clay alteration and gold associated metal geochemistry with silver, zinc, and lead, in addition to other areas of advanced argillic alteration. These ‘overprints’ represent examples of both low sulphidation and high sulphidation epithermal mineralization respectively.

It is interesting that similar silica and clay alteration zones and/or associated gold in soil anomalies have been recognized at La Cruz, Las Cuevas, and Red Valley of the Northern Zone as well as the several target areas within the Highway Zone, all of which lie along a north-south linear trend greater than nine kilometres in length. This corridor represents an attractive target for exploration.

The Company has continued surface exploration and reconnaissance throughout the licence area. This has identified further narrow vein gold targets west of La Paila, and extended knowledge of the regional geology within the licence for improved future targeting.

Further refinements have been made to the re-evaluation of the extensive geophysics dataset for the Caballo District, which identified extremely compelling potential for “giant” porphyry Cu-Au targets adjacent to and beneath the epithermal mineralisation, and amended the drill program accordingly to also test these as a priority.



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CommodityUnitsAvg. AnnualLOM
Gold oz 85,962687,694
Silver oz 1,344,052
All production numbers are expressed as metal in doré.

Production Costs

Total cash costs Gold USD 783.99 / oz *  USD
Assumed price Silver USD 30 / oz *  USD
Assumed price Gold USD 1,500 / oz *  USD
* According to 2012 study / presentation.

Operating Costs

OP mining costs ($/t milled) USD 5.36 *  USD
Processing costs ($/t milled) USD  ....  Subscribe
G&A ($/t milled) USD  ....  Subscribe
Total operating costs ($/t milled) USD  ....  Subscribe
* According to 2012 study.

Project Costs

MetricsUnitsLOM Total
Initial CapEx $M USD  ......  Subscribe
Sustaining CapEx $M USD  ......  Subscribe
Closure costs $M USD  ......  Subscribe
Total CapEx $M USD  ......  Subscribe
OP OpEx $M USD  ......  Subscribe
Processing OpEx $M USD 160.7
Refining and transportation $M USD  ......  Subscribe
G&A costs $M USD 60.1
Total OpEx $M USD  ......  Subscribe
Royalty payments $M USD  ......  Subscribe
Net revenue (LOM) $M USD  ......  Subscribe
Pre-tax Cash Flow (LOM) $M USD  ......  Subscribe
Pre-tax NPV @ 0% $M USD  ......  Subscribe
Pre-tax NPV @ 5% $M USD  ......  Subscribe
Pre-tax NPV @ 10% $M USD  ......  Subscribe
Pre-tax IRR, %  ......  Subscribe
Pre-tax payback period, years  ......  Subscribe

Required Heavy Mobile Equipment


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Mine Management

Job TitleNameProfileRef. Date
....................... Subscription required ....................... Subscription required Subscription required Jan 17, 2024


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