With Fortuna Silver Mines Inc. (TSE:FVI) having completed its warrant exercise on Thursday for a near 24% stake in Medgold Resources Corp. (CVE:MED), Fortuna has signed an amendment to the strategic alliance announced by Medgold on June 13, 2016.
Fortuna now has the right to enter into separate option agreements to earn up to a 70% interest in two geological target areas identified by Medgold’s generative work.
Fortuna can earn a 51% stake in each selected property by spending $3.0mln on each selected property over three years. Once it has earned 51%, Fortuna can elect to form a 51:49 joint venture with Medgold to further develop the selected property or can elect to earn an additional 19% interest in the selected property by spending an additional $5mln in qualified expenditures and completing a preliminary economic assessment on the selected property.
The Tlamino gold project
The Tlamino gold project is located in southern Serbia and includes two historical showings: Liska and Barje. Both showings are associated with a regional east-west-striking detachment fault, which in the vicinity of these showings has been overlain by conglomerates. Mineralization is located at the contact of the basement metamorphic rocks and the base of the conglomerate cover. Liska, located approximately 1.5 kilometres to the southwest of Barje, was drilled in the 1970s by Yugoslav state companies, and a lensoid-shaped mineralized volume of rock with 1 to 2% combined lead and zinc was found to strike northeast toward Barje. The mineralization at Liska is located at the base of the conglomerate and parallel to the slope of the detachment fault. Liska was found to contain little precious metals. At Barje, base metal contents are lower, but precious metals are found in much higher concentrations. The area between the two showings is overlain by a thin conglomerate cover likely in the range of 50 to 100 metres in thickness, and Medgold considers the exploration potential under the conglomerate, between the two showings, to be excellent.
After identifying the project in the fall 2016, Medgold completed a series of saw-cut surface channel samples over the outcrop at Barje, where approximately 70 m by 25 m of mineralized tectonic breccia is exposed on surface at the edge of the conglomerate cover. A total of 132 linear samples of one m in length by approximately eight centimetres in width and four cm in depth were collected from seven channels, designed to test as large an areal extent of the outcrop as possible. Three channels were cut across the outcrop in an east-west direction, while four channels were cut across the outcrop in a general north-south direction. Gold assays ranged from 0.78 g/t Au to 132.5 g/t Au, with an average grade of 8.11 g/t Au and a median grade of 4.74 g/t Au. Silver concentrations ranged from 10.3 g/t Ag to 2,110 g/t Ag, with an average grade of 210.6 g/t Ag and a median grade of 111.5 g/t Ag.
The channel samples described here represent the sampling of an outcrop face. Medgold’s current exploration model for Barje is premised on the interpretation that the outcrop face represents a faulted oblique cross-section through strata-bound mineralization striking northeast-southwest and located at the base of the conglomerate sequence, directly analogous to the mineralization at Liska. However, Medgold does not yet have direct observational evidence to suggest its interpretation is correct. The reader is cautioned therefore that the true thickness of the mineralization described here is unknown, and further work will be required before the true thickness of mineralization can be determined.
Story by ProactiveInvestors