Agoracom Blog Home

Posts Tagged ‘Shelay Valley’

Garibaldi hits silver and gold in Mexico, hunts copper in BC

Posted by AGORACOM-JC at 2:33 PM on Friday, May 16th, 2014

VANCOUVER – Ten years of developing and permitting new technology, staking ground, flying surveys, mapping, sampling, and finally identifying drill targets is starting to pay off for Garibaldi Resources (TSXV: GGI), which hit a near-surface intercept 2,010 grams silver per tonne over 7 metres in the first hole to test the Silver Eagle target at the company’s Rodadero North project in Sonora state, Mexico.

Garibaldi staked the Rodadero project based on the results of hyperspectral remote sensing surveys, which maps mineralogy based on spectral signatures. It is a well-established technique in the exploration world, but the basic version only sees 12 wavelengths. That only outlines basic structures.

Garibaldi took the technique to the next level through a partnership with satellite data provider Macdonald Dettwiller.

“They said to us, ‘We’ve got this hyperspectral spectrometer, so you can take those 12 bands and expand it out to 127 bands and look at the specific mineralogical units,'” said Steve Regoci, president and CEO of Garibaldi. It took another two-plus years to put the concept into action because of design requirements and cross-border permitting, but in 2007 Garibaldi got out and overflew swaths of Mexico in areas they thought were prospective.

“In an arid place like Mexico, in the hottest time of the year when all the vegetation dies, you’re looking right down at the surface and every single mineral known to man has a certain exact spectra – it’s just like a barcode at the supermarket,” said Regoci.

Based on those barcodes, Garibaldo initially staked 300,000 hectares of ground, including the 54,000-hectare Rodadero North property. Through more surveying combined with on-the-ground prospecting, Garibaldi gradually cut Rodadero North down to 6,800 hectares. More importantly, the company identified eight high-priority exploration targets on the never-before-drilled property.

Then it came time to start testing targets, or eliminating targets as Regoci likes to put it.

“Silver Eagle definitely wasn’t our best target but it happened to be road-accessible, so it was the cheapest to go and eliminate,” said Regoci. “But it didn’t really eliminate itself. So we started a second hole that we’re going to re-enter after we get some hydraulics refurbished on the drill rig. You don’t walk away from an intersection like that.”

Garibaldi’s targeting system also led it to some good gold intercepts in the first holes ever drilled at its La Patilla property, in Sinaloa state. Five of six holes spread along 75 metres of prospective strike at La Patilla returned gold. The best intercept rang in at 30 metres grading 3.1 grams gold, starting 11 metres downhole and including 8.5 metres of 10.4 grams gold.

Other results include 38.9 metres grading 0.8 gram gold from surface, 13.7 metres grading 0.9 gram gold from 4 metres depth, and 10.8 metres averaging 1.9 grams gold from 35 metres depth.

Garibaldi is also preparing for a first-pass drill program at its Iris project, which is in Chihuahua state adjacent to Agnico Eagle Mines‘ (TSX: AEM) Pinos Altos mine and Minera Frisco‘s Ocampo mine.

Mexico is one half of the Garibaldi story. The other half is closer to the company’s head office in Vancouver: Garibaldi is exploring a set of properties in the Sheslay Valley, west of Dease Lake in northwest British Columbia.

“In BC we just really liked these properties – we liked the geology and the location,” Regoci said. “A couple times we thought we might lose them but we just kept our feet moving and now the time for this area has come. This is a brand new emerging mining camp.”

Explorers have long poked and prodded about in the Sheslay Valley, but interest in the area really ramped up in mid-2013 when Prosper Gold (TSXV: PGX) inked a deal to earn an 80% stake in the Sheslay project from Firesteel Resources (TSXV: FTR). Prosper is the new vehicle for the team that discovered the Blackwater gold deposit in south-central BC; for that discovery their company, Richfield Ventures, attracted a $500-million takeover from New Gold (TSX: NGD).

“That management group — they’re highly respected guys — they came up here and said, ‘OK, we’ve looked for three years globally and this is the best project we could get bang for our buck,'” said Regoci. So far Prosper has only drilled twin holes, to confirm earlier results, but nevertheless intercepts like 334 metres grading 0.35% copper, 0.11 gram gold, and 0.84 gram silver attracted market attention.

Prosper’s ground borders Garibaldi’s project to the north. Kitty-corner to the northeast is Doubleview Capital‘s (TSXV: DBV) Hat project, where one of the first holes returned 313 metres grading 0.22% copper, 0.18 gram gold, and 0.85 gram silver.

Garibaldi’s ground already hosts known porphyry occurrences at it west end, in an area known as Grizzly West, and in recent weeks the company identified a new porphyry zone 3 km to the south that it haslabeled West Kaketsa.

“What’s happening is we are all establishing this porphyry corridor here,” said Regoci. “I just think this whole area is going to take off. Galore Creek is nearby and it is something like 18 separate porphyries.”

Unlike Galore Creek, the nearby Teck Resources (TSX: TCK.B; NYSE: TCK) project that hosts one of the world’s largest undeveloped copper-gold-silver deposits, Sheslay Valley offers reasonable access and weather. Garibaldi is in talks with Prosper and Doubleview about rehabilitating an old road that runs right into the area. In terms of weather, its location east of the Coast Mountains means the Sheslay gets far less snow than Galore, which is on the west side.

Garibaldi plans to spend the next few months completing a first sweep of the 262 sq. km Grizzly property. The company is permitting 14 fly camps to support a 60-day mapping and sampling campaign. Once that is complete Regoci hopes to have identified some clear targets to drill before the summer is over.

Garibaldi has just enough money to fund its plans. The company has less than $1 million in the bank but it also has 1.5 million shares of Paramount Gold and Silver (TSX: PXG), part of a payment Paramount made to Garibaldi in exchange for the hyperspectral data Garibaldi gathered when it overflew Paramount’s San Miguel project while flying its own adjacent ground.

“It’s been ten years that we’ve been working to get where we are today. It’s hard to believe it’s been ten years but a good five years of that was really challenged by the global financial crisis, so survival in itself has been a challenge,” said Regoci. “Luckily, because we did the Paramount deal at the bottom of the market in 2009, we haven’t had to do a financing since 2009 because we can slowly sell that holding.”

Now that the work has generated a list of targets, Regoci is excited for the future.

“Every little target isn’t going to be a deposit, but we’re not in that broad-scale exploration phase anymore,” he said. “These are focused targets and we’re going to go at it systematically. I think we’ve got a good shot.”

Garibaldi’s share price gained 4¢ on the Rodadero North drill results to close at 26¢. The company has a 52-week trading range of 4¢ to 27¢ and has 58 million shares outstanding.