The Deseado Massif is more known for Andean’s Cerro Negro orebody in the NW and Anglogold’s Cerro Vanguardia mine in the SE, neither of which we have visited and hence cannot comment on them.

Patagonia is also renowned for its wind, and yet we spent 4 days on site at Mariana’s Las Calandrias Project and thought “where is this famed wind?”, as the days gradually warmed up under a clear blue sky (cold at night) as shown in Figure 1, the Calandria songbirds trilled, and flamingos (common to the region) flew across the farm dam around the La Calandria estancia that Mariana has bought for its main project.

Well it made up for itself as the contrasting inset in Figure 1 shows, with an extremely strong wind only 3 days and about 200m away on Mariana’s Calandria Norte. Figure 1 is in fact located at a circular spread chert and we soon understood why the outcrops look “polished”.

The inset in the Figure understates the dust “blast” that is occurring. The Puerto Deseado region was covered in up to 5m thick volcanic ash following the Chilean volcanic eruption in 1991 (which understandably decimated the farms’ meat industry in the region).

Although largely gone and drifted elsewhere, the remaining ash was really only anchored by the shrubs, but still sufficient in the wind to make a blow-over in shaft-sinking (I attended one as part of my mining engineering education) seem like a picnic, as one’s eyes filled with gravel, and most caps speedily sailed away, along with any loose paper.

The gold mineralisation in the Deseado Massif has been dated as Jurassic and thought to have occurred in the break-up of Gondwanaland when South Africa broke away from eastern South America, or the subsequent continental break-up of Pangea event.

However, the two low sulphidation epithermals that we did visit were very different from the epithermals we have encountered to date at Kingsgate’s Chatree in Thailand, Catalpa/NCM’s Cracow in QLD, and NQM now Conquest’s Pajingo also in QLD.

Mariana (MARL.L)’s Las Calandrias project consists of eroded rhyolite domes, all of which appear to be different from each other and seemingly emplaced in pulses at different times from depth. Although adjacent to each other, they even contain different styles of gold mineralisation and different strike directions.

Such as Calandria Sur – a mineralised breccia dome/low hill striking NW/SE, which contains continuous low grade mineralisation 0.5g/t to 3.0g/t with the occasional >10g/t intersection within a 70m length downhole in CSD25, and the mineralisation penetrates into the brecciated ignimbrite floor. While Calandria Norte resembles a shallow river valley striking NE/SW with at least two high grade brecciated veins containing intersections such as 5m @ ~30g/t, and its floor is not brecciated.

There’s also Nido Norte with a N/S striking vein containing visible gold and visible silver in quartz, while nearby Nido East contains no mineralisation and consists of nodular blebby looking rock that has been interpreted as being too young and hence why it is not mineralised.

The main resources for Mariana appear to be in Calandria Sur and Calandria Norte and are expected to be reported in MQ2011.

In contrast, Extorre (XG.TO)’s Cerro Moro contains the highest epithermal grades we have ever seen, spread along its Escondida vein (a classic orientated NW/SE) strike length of >1km, very resemblant of Pajingo.

These high gold and silver grades anomalously occur along with relatively high grades of copper, lead, zinc and moly (which is used as a pathfinder). Anomalous because from what we have so far encountered, high gold-silver ratios usually occur near the top of an epithermal system, while higher base metal grades usually occur towards the bottom.

There are a number of intersections of which the highest (that we noticed) was 0.3m in Escondida Central, diamond drillhole MD98, from 79.3m to 79.6m downhole of 904g/tAu & 21.077kg/tAg (for 1255g/t equiv Au, applying a 60 gold/silver price conversion ratio multiple [currently it is US$1356/oz / 25~= 54 x]), also with 0.5%Cu, 2.9%Pb, 4.2%Zn & 0.08%Mo, which doesn’t affect the recoveries.

That intersection occurs within 3.8m @ 127.7g/tAu & 4281g/tAg, and is not a one-off, with Escondida Far East in MD373 (from 150.8m to 152m) having 1.2m @ 689g/tAu & 15.173kg/tAg (for 942g/t equiv Au), plus 1.23%Cu, 6.84%Pb, 8.0%Zn & 0.13%Mo.

Infrastructure for the Cerro Moro Project looks good, as it lies within ~80km from a major power line, with water accessible by boreholes to ~80m deep (similar to the Cerro Vanguardia mine), and road access. Current road access is via 20km on a surfaced road from Puerto Deseado, followed by 90km SW on a dirt road, followed by a further 12km SE on a dirt road, as the estuary to the relatively deep water port of Puerto Deseado has to be crossed.

Cerro Moro consists of the usual swarm of epithermal veins typically striking NW/SE and NE/SW of which the main NW/SE striking vein is called Escondida The Project is initially focusing on ~50m deep open-cuts on Escondida, Esperanza, Gabriel and Deborah as with a simultaneous underground targeting the high Escondida grades.

Escondida seems to be a popular name, apart from the renowned Escondida mine, and apparently means “hidden”, Extorre have their Escondida vein and just to confuse things Minera IRL have called their extension of Calandria Sur across the boundary into their ground, Escondido. However, Escondido does not seem to be that prospective with IRL only expecting to spend ~$0.5m in the coming year there.

Cerro Moro is the most advanced, with completion of Extorre’s PFS scheduled for mid-2011 with production possibly from DQ2012, and the first 5 years expected to average ~76,400ozpa gold plus ~3.4mozpa silver (or ~133,500ozpa of equiv gold) at a gold equiv cash cost of ~US$201/oz, through a 250,000tpa plant.

Both Cerro Moro and Las Calandrias are examples of relooking at explored ground from a different perspective.

Cerro Moro commented that a number of the outcrops of vein quartz had been misleading to earlier explorers because they were mostly barren (bucky) quartz, however, the mineralised NW/SE striking vein was often nearby but under the surface/hidden. While Las Calandrias lit up like a Christmas tree in ASTER, with multiple colours showing the patterned different clay minerals.

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, and with his associates, may hold interests in some of the stocks mentioned in this article. The opinions expressed in this article should not be taken as investment advice, but are based on observations by the author. The author does not warrant the accuracy or completeness of any information and is not liable for any loss or damage suffered through any reliance on its contents.

Figure 1. Mariana’s Las Calandrias Project in Patagonia, Southern Argentina