The Silver District Property covers a portion of the historic Silver District in La Paz County, approximately 80 kilometres (50 miles) north of Yuma in southwest Arizona.
In August 2012, Magellan entered into an option agreement with Columbus Silver Corporation (CSC: TSX-V), under which Magellan may acquire all of Columbus Silver’s interest in its Silver District property located in Arizona for an aggregate purchase price of $1,013,200.
Magellan paid Columbus Silver $63,200 on signing the Agreement, a further $50,000 on December 31, 2012, and is obligated to pay a further $400,000 by the end of 2014, and a final $500,000 by the end of 2015 to exercise the option. Magellan is also required to maintain the Property in good standing by making all underlying purchase agreements, lease and maintenance payments during the term of the option.
The property covers a portion of a Precambrian metamorphic complex which is intruded by Cretaceous granite and diorite. The basement rocks are overlain by Miocene rhyolitic and andesitic volcanics which appear to coincide with the development of the faulting which host the silver-bearing veins of the district.
Three major fault systems traverse the property from south to north. The western structure strikes northwest, while the two eastern structures strike north and northwest respectively. Mineralized veins, which occur intermittently within the structures, contain quartz, calcite, fluorite, and barite with various silver, lead, and zinc minerals.
Silver District Past Work
Gulf + Western Industries, Inc. (“G+W”), the legendary NYSE listed conglomerate, through its New Jersey Zinc division drilled 260 holes at an average depth of 167 feet for a total of 29,741 feet from 1973 through 1981. Based on the drilling and geologic mapping, sampling, and surface trenching, G+W outlined 11 different near-surface ore bodies containing silver, lead, zinc, barite and fluorspar. The historical silver mineral resource from G+W was 4,819,000 million tons at 3.61 ounces per ton for a total of 17,405,982 contained silver ounces. (1) All of the ore bodies outlined remain open for resource expansion either at depth or along strike.
Orbex Minerals and its successors (“Orbex”) acquired the project in 1983 and drilled over 200 shallow holes from 1983 – 1992 initially focused on expanding the silver resource. As the price of silver fell under $10 an ounce, Orbex turned its focus instead to the by-product: fluorspar. Kilborn Engineering estimated 2,263,772 tons grading at an average of 14.5% fluorspar for a historical resource estimate of 328,450 tons of flurospar. The current market for fluorspar is between $400 and $550 per ton, as China has reduced its exports and there is virtually no domestic production.
The Orbex database of over 200 drill holes has never been fully integrated with the older G+W data to develop an updated silver resource. Together with confirmation drilling, this data would be the foundation to upgrade the historical resource estimates developed by G+W and Orbex into a NI 43-101 compliant resource estimate.
The Silver District has been consolidated under Columbus Silver and the land package under our agreement now covers over 2,000 acres including the most exciting exploration target in the district, the Red Cloud Mine, which was unavailable for both G+W and Orbex exploration.
The patented Red Cloud Mine was one of the early high-grade silver producers in the district and had underground workings down to the 500-foot level where groundwater was encountered. Exploration targets include the reportedly substantial unmined high-grade silver ore in the underground workings and the potential to locate the portion of the Red Cloud vein that was faulted off below the water table, as theorized in private reports on the mine by prominent geologists Oscar Hershey in 1938 and Elgin Holt in 1942. According to Hershey, “the vein is so strong where much of the width remains under the fault that it is likely that it runs a long distance under the Tertiary tuffs and may have many more shoots of ore than those in sight in the mine or may have continuous ore for hundreds of feet.” Elgin Holt stated in 1942 that “most of the engineers and geologists who have examined the property, agree that below the water level in the mine, extensive bodies of sulfide ore should exist, carrying excellent values in silver, lead and zinc.”
Magellan Gold Corp © 2016.