Sep 20 2016
Filo Mining Corporation is pleased to provide an introduction to Filo Mining which was spun out from NGEx Resources in August and is now trading on the TSX-V and the NASDAQ First North exchanges under the symbol FIL. Filo Mining is the newest addition to the Lundin Group of Companies.
Filo Mining's flagship project is its 100% controlled Filo del Sol Project located on the border between San Juan Province, Argentina and Region III, Chile. Filo del Sol is located between the prolific Maricunga and El Indio Gold Belts, two major mineralized trends that contain such deposits as Caspiche, La Coipa, Veladero, El Indio, and Pascua Lama. (see attached map, Figure 1). The region is mining-friendly and hosts a number of large scale mining operations. The project area is covered under the Mining Integration and Complementation Treaty between Chile and Argentina which provides the framework for the development of cross border mining projects.
The Filo del Sol deposit occurs within a 6 km by 3 km alteration zone which is one of the largest undeveloped mineralized systems in the Andes. With less than 20% of the project area explored to date, Filo del Sol has so far delivered an Inferred Resource estimated to contain:
- 150 million ounces of silver
- 4 million ounces of gold
- 3.3 billion pounds of copper
Within a total of 381 million tonnes at a grade of 0.39% copper, 0.33 g/t gold and 12.2 g/t silver (0.69% copper equivalent)1.
Discreet zones of much higher-grade copper, gold and silver mineralization occur within this overall resource, providing the opportunity to study a wide range of possible mining scenarios. The upper 150 to 200 metres of the resource is oxidized, and initial metallurgical test results indicate excellent recoveries of copper and gold using leach processing.
Several high-quality exploration targets defined by geology, soil and rock geochemistry, and geophysics remain to be tested and the potential to increase the size of this resource and discover new deposits within the extensive alteration zone remain excellent.
"It's a unique situation," comments Lukas Lundin, Chairman of the Board. "Over 18 square kilometers of under-explored surface alteration within one of the most important mining districts in the world. In the northern part the deposit, our geologists see an opportunity to discover high grade precious metal vein and breccia deposits, while in the middle, evidence points to an extension of the known copper-gold-silver mineralization with surface alteration more than doubling the existing resource outline. To the south, we have well defined copper-gold porphyry targets reminiscent of the early days at Los Helados and Josemaría, where surface trenching suggests even higher gold values. The scale of the system is truly impressive and we've just scratched the surface. Our success in this region is due to more than 10 years of persistent exploration by our very experienced and successful exploration team, many of whom have been with the Lundin Group since Veladero days. I am confident that this new company provides a platform to add a new chapter to that track record of success."
Wojtek Wodzicki, President and CEO of Filo Mining adds, "We believe that Filo del Sol has become one of the most significant new resource discoveries in South America. NGEx's early success at Los Helados and Josemaría focused our exploration efforts on defining those world class deposits. Launching this new Company brings the Filo del Sol project into the spotlight."
Planned Work
The immediate focus at the Filo del Sol project will be directed towards evaluating the potential to develop the project as a low cost, heap leach operation. A preliminary leach metallurgical program was completed earlier this year on samples of oxidized material with results expected shortly. Heap leaching is a widely used processing method for recovering metals from oxidized mineralization and typically involves lower capital and operating costs than the flotation process that is used for sulfide material.
Internal studies carried out during the past year have led to a better understanding of the most important potential economic drivers of the deposit and have improved our understanding of potential development scenarios. Our goal now is to use the upcoming field season to fill in data gaps, continue to improve our understanding of the geology and resource, and begin to collect information that will allow us to evaluate development options. We also plan to continue to expand the known resource and search for additional deposits on the property.
The proposed work program has four main objectives: conversion of Inferred resources to the Indicated classification; expansion of the current resource; discovery of new deposits and completing a comprehensive program of metallurgical testwork.
Resource Conversion
Focused infill drilling within the resource volume will allow conversion of a portion of the resource to be classified as Indicated. This drilling will target high-grade copper oxide and structurally-controlled high-grade gold zones as priorities.
Resource Expansion Potential
The current resource remains completely open to expansion to the north and south, and some of the drill metres will be allocated to testing these areas. If successful, this data will allow for an increase in the overall size of the resource.
The northernmost holes into the resource volume include previously released drill intercepts such as VRC28 (8m @ 7.4% copper plus 22 metres at 2.2 g/t gold), VRC63 (74m at 0.54 g/t gold and 0.67% copper plus 48m at 196 g/t silver), VRC66 (80m @ 0.50 g/t gold plus 20 metres at 2.1% copper plus 16 metres at 222 g/t silver) and VRC89 (42m at 1.1 g/t gold, 0.78% copper and 146 g/t silver). Step-out holes to the north of these intersections will allow an expansion of the resource, if successful.
A series of widely-spaced drill holes to the south of the resource area, intersected wide zones of oxide gold +/- copper mineralization which extends for over 1,200 metres from the Filo resource. Previously released drill intercepts in this area include RCVI-16 (154m @ 0.48 g/t gold), RCVI15 (32m @ 0.98 g/t gold) and RCVI2 (40m @ 1.19% copper).
Rock sampling of four road cut trenches in the same area during the 2015/2016 field season returned intervals of 230 metres grading 0.36 g/t gold, 470 metres grading 0.30 g/t gold and 0.18% copper, 227 metres grading 0.45 g/t gold and 0.46% copper and 90 metres grading 0.35 g/t gold along a strike distance of 660 metres. None of these trenches exposed the full width of the zone and all will need to be extended.
The southern zone is characterized by a very large copper/gold soil geochemical anomaly which includes an area of approximately 1,300 metres by 650 metres with values greater than 500 ppm copper and 100 ppb gold-similar to what occurs above Los Helados and Josemaria. Infill drilling is proposed for this area with the objective of completing an initial resource estimate following completion of the work program. Based on the current information, it is possible that this will be contiguous with the Filo resource.
The size of the mineralized system at Filo del Sol, combined with the variety of possible deposit types, indicates the potential for the discovery of completely new mineral deposits on the property. This potential is supported by surface exploration data from four areas in the vicinity of the Filo del Sol deposit. Two of these targets relate to finding higher-grade gold and silver zones within the high-sulphidation epithermal system which hosts the deposit, and two relate to copper-gold porphyry targets underneath and adjacent to the epithermal system. The most advanced of these is the Cerro Vicuña porphyry target. This lies 700 metres southeast of the southern edge of the resource volume. See attached map Figure 2 for location of exploration targets.
History
The Lundin Group first acquired the land package containing the Filo del Sol deposit shortly after their success with the world-class Veladero gold discovery (estimated production plus known resources ~13 million ounces)2 and the subsequent takeover of Argentina Gold by Homestake. The potential of the Filo area was recognized by the same team that discovered Veladero and who were also responsible for the Lundin Group's acquisition and advancement of the major Bajo de la Alumbrera copper/gold deposit (estimated production plus known resources ~11 million ounces and 7 billion pounds copper)2. The Filo area initially attracted the exploration team's attention due to the size and intensity of the alteration zone.
Management
Filo Mining will be managed by the successful NGEx team led by Chairman Lukas Lundin, President and CEO Wojtek Wodzicki, VP Exploration Bob Carmichael, General Manager South America Alfredo Vitaller, and Director Corporate Development and Projects Jamie Beck. All members of the team have extensive South American experience. The senior management team is complemented by a highly experienced and successful exploration team based in Argentina. It is expected that, in due course, the Company will hire a new CFO to replace Interim CFO Joyce Ngo who will continue as Interim CFO of NGEx.
Qualified Persons
Technical disclosure for the Filo del Sol Project included in this press release, has been reviewed and approved by Bob Carmichael, P. Eng. (BC). Mr. Carmichael is NGEx's Vice-President of Exploration and a Qualified Pern ("QP") under National Instrument 43-101 Standards of Disclosure for Mineral Projects