McEwen Mining Inc. owns a 49% interest in Minera Santa Cruz S.A. (“MSC”), owner of the producing San José silver-gold mine in Santa Cruz, Argentina, which is operated by the joint venture majority owner, Hochschild Mining plc.
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Summary:
The San José property is in the Deseado Massif, which consists of Paleozoic metamorphic basement rocks unconformably overlain by Middle to Upper Jurassic bimodal andesitic and rhyolitic volcanics and volcaniclastics. Cretaceous sediments and Tertiary to Quaternary basalts overlie the Jurassic volcanics. The Jurassic Bajo Pobre Formation is the main host of gold and silver vein mineralization at the mine. The formation is comprised of a lower andesite volcaniclastic unit and an upper andesite lava flow and has a maximum thickness of 394 ft. Mineralization in the San José area occurs as low sulfidation epithermal quartz veins, breccias and stockwork systems accompanying normal sinistral faults.
Mineralization in the vicinity of the Property occurs as LS epithermal quartz veins, breccias and stockwork systems accompanying normal-sinistral faults striking 330° to 340° and conjugate dextral faults. Most of the known mineralization at the Property is hosted by the Jurassic Bajo Pobre and Chon Aike Formations.
Regional exploration has identified numerous vein targets, of which five, Huevos Verdes, Frea, Kospi, Ayelén and Odin have been extensively explored by surface diamond drilling and subsequently developed by underground mining.
After reviewing the various drilling programs, Colquhoun et al. (2007) concluded the Frea and Kospi Veins were the most significant zones in terms of grade and tonnage. The mineralized Frea has been traced over a 1,200 m strike length and to depths of up to 250 m, with an average width of up to 2.5 m (Colquhoun et al. 2007, Minera Andes News Release, September 2, 2008). The Kospi Vein has been traced for over 1,300 m strike length (Mach and Elliott 2009) and to depths of up to 230 m, with an average width of around 3.0 m.
Huevos Verdes
The Huevos Verdes vein system is one of the most important targets on the Property consisting of three to four discontinuous zones: Huevos Verdes Norte (“HVN”), Huevos Verdes Sur (“HVS”), Huevos Verdes Centro (“HVC”) and Huevos Verdes Ramal (“HVR”). The system is comprised of an array of sub-parallel veins striking 325° with dips ranging between 45° and 75° to the northeast that can be traced almost 2,000 m along strike. Mineralization is hosted by the Jurassic Bajo Pobre Formation, close to the contact of andesitic lava flows with underlying volcaniclastics.
The veins pinch and swell and have numerous bends and jogs. Several sub-parallel veins and splays off the main vein have been identified. The width of the vein zone is variable, ranging from less than 1 m to around 15 m. With the exception of limited outcrops of the HVS, the remainder of the veins are blind targets, below a cover of Tertiary basalt layers of up to 50 m.
Within the HVN and HVS zones, the strongest mineralization is restricted to sub-vertical 50 to 80 m long ore shoots which can extend 50 to 200 m vertically. The location of these shoots may locally correspond to structural bends and jogs.
High-grade portions of the veins consist of banded to mottled quartz with irregular sulfide bands mineralized by fine-grained argentite and pyrite. Ruby silver and native silver are locally observed. The base metal content (zinc, lead, copper) of the veins and the amount of sphalerite, galena and chalcopyrite tends to increase with depth.
Huevos Verdes North (HVN)
The main HVN vein is irregularly-shaped and pinches and swells along the 400 m of strike. The vein width varies between 0.5 to 4 m and the dip ranges between 65° to 70° to the north- northeast. The vein and surrounding host rocks have associated strong illitic and argillic alteration with minor propylitic and potassium feldspar alteration.
The northern and southern extents of the vein have been closed off by drilling. At depth, mineralization is mostly closed off, except at the northernmost end of the zone. This zone is the weakest mineralized structure of the three Huevos Verdes zones. The strongest levels of gold and silver mineralization are restricted to two principal sub-vertical shoots, which are each approximately 50 to 80 m long and can be traced approximately 150 to 200 m vertically.
Huevos Verdes South (HVS)
The HVS vein has been traced for approximately 520 m along strike and ranges in width from 0.5 to 3 m. The dip of the vein ranges from 42° to 75° to the north-northeast and the strike varies from 100° to 190°. The change in orientation may explain the better mineralization and higher gold and silver grades at HVS compared to the HVN vein. Four main sub-vertical shoots, up to 80 m long horizontally and up to 200 m vertically appear to control the majority of the mineralization. Mineralization is open to the northnorthwest, and, similar to the HVN, gold and silver grades are strongest in the uppermost parts of the vein and appear to decrease with depth.
Huevos Verdes Central (HVC)
The HVC vein has been traced approximately 400 m along strike and ranges in width between 0.5 to 5.0 m. The dip of the vein ranges from 70° to 75° to the north-northeast. The strongest mineralization is restricted to a gently plunging ore shoot 40 to 70 m in width. The shoot has been traced for almost 300 m and remains open at depth.
Huevos Verdes Ramal (HVR)
The HVR vein has been traced approximately 200 m along an east-west strike and ranges in width from 1 to 3 m. The vein is located between the HVC and HVS and has been traced vertically for 250 m.
Frea Vein
The Frea vein is hosted in Jurassic volcanics and controlled by northwest trending faults. The vein is a blind target below Cretaceous sediments and Tertiary basalts, discovered in 2003 as a result of test drilling an IP/resistivity target. The vein has been traced approximately 1,200 m along its northwesttrending strike and vertically to 200 m. The width of the vein varies from 0.5 to 7 m and dips at approximately 52° to the northeast. The vein remains open in all directions except the northwest extension, which is closed off by drilling.
Kospi Vein
The Kospi vein is also hosted by Jurassic volcanics and controlled by northwest trending faults, however, it dips to the southwest at about 70°. Kospi is also a blind target beneath Cretaceous and Tertiary cover rocks, discovered in 2005 as a result of drilling an IP/resistivity target. The vein has been traced for approximately 1,300 m along its northwest strike at 308° and vertically to 230 m. The thickness of the vein ranges from 0.25 to 9.5 m. The vein remains open to the southeast but is closed off by drilling in its northwest extent.
Odín and Ayelén Veins
The Odín and Ayelén veins are the two most north-easterly northwest-striking sub-parallel systems that have been drilled. As a result of the 2008 drilling program, Odín has been traced approximately 1.6 km along strike and Ayelén 1.2 km along strike, with both dipping to the southwest (Minera Andes News Releases, September 2, 2008 and January 9, 2009). Mach and Elliott (2009) reported an extension to these veins of 1.9 km for Odín and 1.6 km for Ayelén. Both of these vein systems were discovered by test drilling blind geophysical targets. The Odín vein remains open to the west along strike and at depth where it has been tested to 200 m.
Luli and Susana Veins
The Luli and Susana veins are part of an E-W trending vein system that has an orientation different from the typical northwest trend of all other veins at San José. This system does not outcrop. The Luli Vein has an inferred strike length of 1,300 m and the Susana Vein has an inferred strike length of 1,200m.
Micaela Vein
The Micaela vein has been traced approximately 1,000 m along an east-west strike and ranges in width from 1 to 4 m. The vein has been traced vertically for approximately 200 m.
The San José deposit is considered to be a typical low sulphidation (“LS”) silver-gold epithermal deposit.