Argentina is the second largest country in South America, constituted as a federation of 23 provinces and an autonomous City, Buenos Aires. It is the eighth largest country in the world by land area and the largest among Spanish-speaking nations, although Mexico, Colombia and Spain are more populous. Argentina is one of South America’s largest economies, with a similar high quality of life and GDP per Capita. The country has a firm foundation for future growth for its market size, the levels of foreign direct investment and percentage of high-tech exports, as a share of total manufactured goods. Argentina is a founding member of the United Nations, Mercosur and the Union of South American Nations, along with being one of the G20 major economies. Argentina's booming mining sector attracted in the order of $2.3 billion investment during 2008, up more than 1,000 percent from 2003, according to official data available (reuters.com). Argentine mining exports totaled about $3.9 billion in 2008 and the mineral exports of the country primarily relate to precious and base metals such as copper, gold, silver and molybdenum. Some of the larger mines in the country include Barrick Gold Corporation’s Veladero gold-silver mine, AngloGold Ashanti's Cerro Vanguardia and the country's largest mine - the Bajo de la Alumbrera copper-gold operation, controlled by Xstrata Copper. Some of the major ongoing projects include Barrick's giant Pascua Lama mine and the Cerro Negro gold project in southern Argentina (the main asset of Andean Resources), which has recently been valued by Goldcorp in the order of a $3.43 billion.
The Eureka Property covers in excess of 10 thousand hectares and is located in the northwest corner of the Jujuy province in northern Argentina, adjacent to the border with Bolivia and at an altitude range of approximately 3600 to 4400 meters (above sea level). There is excellent road access to the Property from the provincial capital of San Salvador de Jujuy approximately 5 hours drive to the south, with there being easy access within the Property over a series of good quality gravel roads.
The tenements are situated within the Argentinean portion of the regionally extensive Bolivian-Argentinean Tertiary Belt (Puna-Altiplano high-plateau) and there are essentially two major metallogenic associations present. The Ordovician basement is often mineralised with gold-bearing quartz veins and, when eroded can develop placer deposits in alluvial settings. The Miocene fluvial auriferous conglomerates also show an extensive copper mineralisation, probably related to hydrothermal waters during the Miocene volcanism. These type of mineralisations are known to host Red Bed copper deposits, being of a type similar to that of the most famous Corocoro copper deposit in southwest Bolivia (Chapman 2007). The property hosts an historical mine known as the “Eureka Mine”, which had been exploited by the Jesuits since the 17th century, with an artificial dam having been constructed for washing the gold extracted from the Mine. Further industrial-style exploitation of the gold started circa 1885 (Novarese 1893), along with further exploitation in the “La Perdida” (now called “El Torno”) and the “San Francisco” Mines. The most recent copper extraction began circa 1949 and then continued in sporadic form to 1975 (Coira et al 2002). The latest explorations in the area (1980 – 2001), were carried out by Mantos Blancos, Paramount Ventures and Finances and then also more recently, by Minera Penoles and Codelco. The Company has a specific interest in 11 exploration licences covering tenements within the Eureka Property discussed above.
To date, previous exploration has indicated a non-compliant resource estimate from Penoles in the order of 62 million tonnes grading at approximately 1% for copper (62,000 tonnes of copper) and exploration from Mantos Blancos, an estimate of 600,000 tonnes grading approximately 2.7 g/t. of gold (52,000 ounces of gold).
Following the receipt of the US$7 million funds from Gold Fields (see Mankayan Project), the Company was in a strong position in January 2012 to renegotiate an accelerated acquisition of 100 per cent. of the Eureka project, achieving a saving of US$1.3 million versus the original staggered acquisition price. Accordingly, the Company is now the sole owner and operator and has total discretion over all exploration expenditure on the project. On 15 August 2011, the Company announced that it had completed Phase I of its initial exploration programme in relation to the evaluation of historical data and the generation of a geographic information system (GIS) database. This included the identification of encouraging geophysical responses with zones of high electrical chargeability and resistivity, which shall provide additional targets for the Company’s planned ongoing exploration programme. Work is currently progressing on an environmental base line study, along with the preparation of statutory Environmental & Social Impact Assessments and Hydrogeological Reports, which when completed will be submitted to the Provincial authorities, prior to receiving permits to enable the commencement of Phase II of our exploration programme during the latter part of 2012.
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