Mineralisation
Gold and silver mineralisation at Cap Oeste is hosted by the northwest trending Cap Oeste Breccia Fault, which dips 75° to 90° to the southwest.

The drilling to date has defined a high-grade shoot, approximately 130 m long and 12 m to 15 m wide, situated in the interpreted southeast extension of the Bonanza Fault. The high-grade ore shoot pitches steeply to the west north-west over an approximate 120 m vertical interval, extending from 135 m to 255 m vertically below surface as currently defined by the drilling to date. Mapping, trench sampling and drilling has confirmed that the high-grade shoot is overlain by a broader (e.g. 20 m thick) zone of more diffuse lower grade, high Ag/Au ratio mineralisation and trace element anomalism.

The highest-grade Au-Ag mineralisation is hosted by a distinctive suite of sinuous to weakly bifurcating breccia, comprising argillic altered characteristically rounded fragments of volcanic host rock in a sulphide rich milled breccia matrix of fine-grained grey quartz, illite, and carbonaceous material. Precious metals occur as native metal, alloys and sulphides, in close association with base metal sulphides, pyrite, and arsenopyrite. These zones of very high-grade Au-Ag mineralisation are referred to by PGD as ‘hypogene’ mineralisation, or more commonly ‘COSE’ style mineralisation, as a reference to the nearby COSE au-ag mineralisation style to the south-east of Cap Oeste.

PGD geologists have defined several broadly defined successive types of mineralisation at Cap Oeste CAM (2012). The individual types are defined according to their respective locations in relation to the Bonanza Fault or Esperanza Faults. Cube has labelled two main zones of mineralisation based on the 3D interpretation as the Bonanza Fault (“BZ”) breccia mineralisation and the Esperanza Fault (“EZ”) quartz vein style mineralisation.

Deposit Types
Exploration by PGD throughout the El Tranquilo Block is focused principally on discovery and delineation of low sulfidation, Au-Ag epithermal mineralisation of the type well documented throughout the Deseado Massif [e.g. White and Hedenquist (1990), Corbett, G.J. (2001) and Sillito, R.H. (1993)]. Mineralisation typically comprises banded fissure veins and local vein/breccias characterised by high Au and Ag contents and ratios of Au:Ag generally greater than 1:10. Mineralised veins and breccias consist of quartz (coliform, banded, and chalcedonic morphologies), adularia, bladed carbonate (often replaced by quartz), and dark sulphidic material termed ginguro (fine grained electrum or Ag sulphosalts banded with quartz). Discrete vein deposits, such as at Cap Oeste, develop where mineralising hydrothermal fluids are focused into dilatant structures, producing ore shoots which host the highest precious metal grades. Low sulfidation mineralisation can also develop where mineralising fluids flood permeable lithologies to generate large tonnage, low grade disseminated deposits (e.g. Round Mountain, Nevada; McDonald Meadows, Montana).

Studies of alteration patterns and fluid inclusion data demonstrate that precious metal precipitation generally occurs between 180° to 240° Celsius, corresponding to depths 150 m to 450 m below the paleosurface (Figure 8-1) Deposits often exhibit a top to bottom vertical zonation:
• Precious-metals-poor, paleosurface, sinter (Hg-As-Sb);
• Au-Ag-rich, base metal poor “bonanza zone” (Au-Ag-As-Sb-Hg); and
• Ag-rich, base metal zone (Ag-Pb-Zn-Cu).

Alteration is controlled by the temperature and pH of the circulating hydrothermal fluids and its distribution therefore can be spatially zoned. Alteration minerals that occur proximal to mineralisation include illite, sericite, calcite and adularia, whereas smectite and chlorite typically occur in a more distal setting. Additional variants include pervasive silicification of wall rock as envelopes to quartz veins and breccias, and advanced argillic alteration (alunite, jarosite, kaolinite, vuggy silica) in steam heated horizons at higher structural levels.

Mineralisation at Cap Oeste is also assigned to the low sulfidation type, based on the presence of finegrained replacement quartz and adularia, widespread illite alteration, bladed textures indicative of hydrothermal boiling, and a mineral assemblage dominated by marcasite, arsenopyrite and silverbearing sulphosalts. The presence of anomalous copper and molybdenum associated with higher grade Au-Ag mineralisation suggests a component of magmatic-derived fluid.

The Cap Oeste deposit occurs predominantly as hydrothermal breccia, in combination with replacement, veinlet and disseminated styles of mineralisation, rather than as one or more discrete quartz veins. This is somewhat atypical for the Deseado Massif deposits, perhaps reflecting a lack of open space during hydrothermal fluid flow.

The Cap-Oeste Project area is located in the central portion of Santa Cruz Province, in the Department of Rio Chico, southern Argentina

In 2014, an initial open pit design with a 24 month mine life was selected by PGD for development with the option to increase the project mine life to six years with the development of the underground production.

The Company has selected a low cost initial open pit design with heap leach processing facilities with the option to increase the project mine life to six years with the development of the two underground projects at Cap-Oeste and COSE.

The pit optimisation was carried out at a price of $1,300/oz Au and $20/oz Ag and has resulted in an increase in the current open-pit life for Cap-Oeste from two to three years, with the pit now forecast for depletion in Q3 2019 with a total ore production of 2.03Mt @ 2.99g/t Au and 138g/t Ag for a total recoverable estimated production of 136,000 oz of Au and 3.2M oz of Ag, equating to 186,800 oz AuEq. Pursuant to the pit optimisation, the proposal is to increase the size of the pit to mine the ore previously delineated for the Cap-Oeste underground pit, resulting in the overall material to be moved over the life of the mine increasing from 7.2Mt to 25.2Mt, which will also increase the strip ratio from 3.7 to 11.44 and the ore being mined increasing from 1.55Mt to 2.03Mt. In order to mine the increased material, additional fleet will be required to increase the monthly production with one excavator, two fixed body dump trucks and one additional blast hole drill required.

In 2018 PGD has recently completed open pit mining of the Cap Oeste Mineral Resource, with ore treated using a heap leach operation at the mine site. PGD is currently assessing the potential for underground mining of the resource as it is evident that high-grade gold and silver mineralisation extends below the current limit of the open pit to known depths of 300 m, or the limit of the current drilling information.

The Cap Oeste Mineral Resource dips sub-vertically. Ore mining widths are widths range from a minimum of 5 m to 20 m. The dip and continuity along strike of the orebody are amenable to multiple alternate mining methods. Cap Oeste could potentially be mined in a top-down sequence of long-hole open stopes with pillars left within lower grade zones of the orebody to provide support to the hanging wall. This assessment does not take into consideration any geotechnical assessment for ground conditions and pit wall stability, near potential locations for the underground portal.

An overall mine reconciliation of the open pit production figures compared to the recovered production figures is incomplete as heap leach production was continuing into 2019 following the completion of open pit mining in 2018. The recovery of gold equivalent metal from the heap leach operation is significantly lower than pit production, although there is likely to be considerable metal retained in the heap leach pads passed the end of the reporting period (31 December 2018). However, PGD has reported that there have been ongoing issues with metallurgical recovery from the heap leach operation over the course of mining.

In 2020 the Company has initiated a pre-feasibility study to assess the potential technical and economic extraction of a high-grade portion of the current mineral resources. The Company is now focused on evaluating the development of this high-grade part of the total mineral resources by underground mining. The Company is expecting quotations with respect to potential construction of an underground mine at the Cap-Oeste Project.

The initial project consists of mining the oxide ore and treating it on a heap leach plant. The open pit, heap leach pad and recovery plant were completed on time with the first gold pour on 27 October 2016.

In 2020 The Company is expecting quotations with respect to potential construction of an underground mine at the Cap-Oeste Project. Material processing options are being considered and may include utilizing the Company’s flotation facilities at its Martha Mine Project (as defined herein), about 100 kms to the southeast of the Cap-Oeste Project. The Company has successfully carried out bulk metallurgical tests in the Martha Mine Project process plant, obtaining good recovery results.