CVSA have delineated a swarm of veins/lodes over an area of about 15km x 15km, striking predominantly E/W in the north, and then NW/SE, with a few veins that are N/S and NE/SW striking too.

The main mining since 1998 has been through open-cuts with average SRs ~27, although underground mining started in September 2010 in the backfilled Mangas pit (apparently re-opening the pit and using the backfilled floor, declining through one of the walls).

With excellent ground conditions in the stopes, CVSA were using a bench retreat sub-level stoping method at Mangas with sub-levels at 15m intervals, individual stopes being 30m on strike for the 2m to 4m wide orebody. There are no rib pillars, just a 5m sill pillar every 60m. Level intervals were going to be trialled at 20m and then possibly 25m from 2012. The ramp was 4.5m x 4.5m with 2 declines at each of Mangas & Osvaldo (increasing to 3 from nearby pits), and increasing the current almost 240ktpa @ 8g/t.

All process water was being generated from the underground mine and the open-cuts and recirculated amongst them (the aquifer borehole water was only being used for drinking in the camp). The plant was achieving ~90% to 95% recoveries on gold (Au) and ~70% to 75% on silver (Ag).

Although the high grades are usually electrum, the feed was being blended through a conventional 3-stage crushing circuit with 5 CIL tanks to a Merrill-Crowe bank of cells (electrowinning trials were expected to occur in 2012). Innovatively the plant has a cyanide recovery circuit (that recovers ~80% of the cyanide).

IP had been used to discover the veins (many were/are hidden) but was found by CVSA to be too broad [target wise] and hence was last undertaken in 2003, with the current main techniques to discover veins being a mixture of ground geophys and aeromag. CVSA's aeromag plan showed veins on almost everything : structures, mag, demag zones etc. Most of the discoveries in the past year or so have apparently been made near surface (under cover).

The resource model for the manganese-rich Mangas line of pits had its depth profile as having been drawn down from deeper drillhole intersections to date. At CVSA, the main rock-types are ignimbrites and range from fine grained (usually barren), welded (such as at Mangas, grades typically 4 to 5g/t), to the higher grade granosa (such as at Osvaldo, more 8g/t to 10g/t). Very high grade granosa is ~15g/t to 25g/t, ranging up to 60g/tAu & 5kg/tAg (due to the Argentite [a native silver mineral]).

CVSA have found that the geological perception that epithermal mineralisation in veins/lodes usually pinches out at depth, appears to be incorrect. Deeper intersections at 400m or 600m have shown that the mineralisation may re-open below the perceived "pinch-out" in the near vertical plane of the vein, or the vein undergoes a "roll" on the "pinch-out" and re-opens in the subsequent deeper flat or a displaced further vertical orebody.

Through going underground, CVSA have also found that some of the pits actually have more than one parallel lode, some of which only appear at depth beneath the original pit floors.

Re-interpretation of their original sections has also benefited from the move to applying Aueq x true width instead of simply gold g/t, as shown in Figure 1 of the ~4km long Osvaldo line of pits where the original pits were designed on the basis of g/t gold grade. The revised interpretation of dividing the silver grade by say 50 and adding that to the gold grade, assuming 100% recovery and multiplying by the width produces a section showing significant upside potential. (colouring note : blue is low grade, pink is the highest high grade).

Extorre (XG : listed on the TSX & NYSE) have had similar success at their Cerro Moro discovery, with their individual prospects extending deeper, sometimes after a weakly mineralised (pinch-out?) interval. Some of the veins extend vertically to depths of up to ~400m from near surface such as at their relatively new Zoe discovery. And deeper extensions are being found along the length of their >10km long Escondida to Zoe trend.

Interestingly Extorre were using the Pajingo model for their Escondida trend to Martina (before their Zoe extension). The mineralisation at Pajingo (now owned by Evolution [EVN]) appears to be truncated at depth along the Vera Nancy trend. But XG have found the Pajingo model to be incorrect for Cerro Moro, as their mineralisation extends deeper (and is still open at depth).

The Pajingo stopes along the Vera Nancy trend were mined from the bottom up and little drilling was reputedly undertaken under them. For that matter it does seem unusual that the epithermal mineralisation at Cracow (also now owned by Evolution) appears to be isolated without some form of deeper link between them.

So based on observation, deeper drilling may be able to extend epithermal mineralisation deeper than previously envisaged, and perhaps historical perceived "pinched-out" areas of epithermal veins need to be revisited.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd.

Figure 1. Long Sections (looking west) of Cerro Vanguardia's Osvaldo pits (Source : CVSA JV)