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Cervantes Drilling Demonstrates There Is Nothing Quixotic About Gold Project

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The initial drill results of a new exploration company show porphyry gold potential in an area where two large mines are operating.

Cervantes Gold Project, Sonora, Mexico

Aztec Minerals Inc. (AZT:TSX.V; AZZTF:OTCQB), an exploration company that IPO'd in May, released the assay results from the first five drill holes at its Cervantes Gold Project in Sonora, Mexico. The company announced that it has "intersected long intervals of porphyry gold (copper, silver) mineralization including shorter intervals of high grade gold mineralization in the initial results of its Phase 1, 15-hole, 3,000 metre (m) drill program at the Cervantes Project." The drilling found mineralization that begins at surface.

A map of the drilling locations is available here.

The Cervantes property sits at the intersection of two trends, a porphyry copper trend that heads northwest into Arizona and a gold sulphide epithermal trend running east west. Two large, producing, open-pit gold mines, Alamos Gold's Mulatos Mine and Agnico Eagle's La India Mine, are located in the gold trend.

According to Alamos Gold, the Mulatos Mine has produced about 1.7 million ounces of gold since commercial production was declared in 2006. La India, Agnico Eagle reports, hosts proven and probable reserves of 1 million ounces of gold; over 115,000 ounces of gold were produced in 2016. Exploration is ongoing at both mines to expand the resource.

Drill highlights at Aztec's Cervantes include:

  • 139.0m from surface grading 0.71 grams per tonne (gpt) Au, including 2.10 gpt Au over 20.0 m, in hole 17CER005 at the California zone
  • 117.0m from near surface grading 0.63 gpt Au, including 1.18 gpt Au over 43.0 m, in hole 17CER003 at the California zone

Aztec CEO Joey Wilkins stated that the positive results from three of the five holes "confirm that the California zone has excellent bulk tonnage porphyry gold (copper, silver) potential at Cervantes. Holes 3, 4 and 5 were drilled to test a small part of a large surface geochemical gold anomaly on the hill that forms the California zone."

He noted that the first five holes totaled 810 meters and that the company is currently drilling its ninth hole. "Our first two drill holes intersected anomalous but sub-economic copper-gold-molybdenum oxide mineralization from top to bottom in the Jasper zone west of the California zone. The main focus of our remaining holes in the Phase 1 drill program will be to systematically test the western half of the much larger California zone."

"The entire California zone is underlain by a large, strong IP chargeability anomaly from 100 m depth down to at least 500 m that could represent the heart of a porphyry gold (copper, silver) sulfide system," Wilkins stated.

The company expects to release further drill results over the next few months.

Aztec Minerals has an option agreement to purchase Cervantes from Kootenay Silver in two stages. It can earn up to a 65% interest over four years "by making certain exploration expenditures, cash payments, and share issuances to Kootenay over a four-year period. Stage 2 gives Aztec the right to purchase the additional 35% interest by preparing a scoping study and resource estimate and paying Kootenay US$5.00 per gold equivalent ounce for their 35% share of the resource ounces. Kootenay will retain a 2.5% NSR, 0.5% of which Aztec can purchase for US$500,000."

At the end of 2017, Aztec signed an option agreement to acquire silver mining properties in the Tombstone Mining District in Arizona and will develop exploration plans the first half of this year.

CEO Wilkins noted, "We are acquiring these Tombstone properties because we see an entire district with a prolific history of small scale, high-grade mining and a significant lack of modern exploration to discover new orebodies."

An experienced team leads Aztec. President and CEO Joey Wilkins, in his 20 years with Kennecott, ran exploration projects for porphyry copper-gold deposits in northern Mexico and South America. Brad Cooke, the founder of Aztec and a director, is the CEO of Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE). Director Mark Rebagliati is the executive vice president for exploration for Hunter Dickinson and is a recipient of PDAC's Bill Dennis Award for a Canadian Discovery and Prospecting Success. And director Patricio Varas was the exploration manager of Far West Mining, which was acquired by Capstone Mining Corp. (CS:TSX) for $725 million in 2011 for its Santo Domingo copper-iron-gold project in Chile.

Aztec has approximately 28 million shares outstanding, of which Coeur Mining owns 9.99% and management and directors own approximately 17%.

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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own shares of the following companies mentioned in this article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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