Khavchuu

Targets: Boroo-style orogenic lode gold (+ arsenic) systems

Area: 17,643 acres, or 71.4 km2

Location: Sumber Soum, Tov Aimag, northern Mongolia

Ownership: Option to acquire 100% interest

Overview - Boroo style gold deposits

The Khavchuu Project is an early-stage exploration project located 10 km west of Centerra Gold’s Boroo mine and mill complex. The project is located within the same geological terrain and has the same geochemical signature as Boroo (~2 Moz resource base), making it a potential host for Boroo-style gold deposits.
Khavchuu gold project in the Yeroogol Gold Belt of northern Mongolia in relation to other gold deposits in the region

Khavchuu gold project in the Yeroogol Gold Belt of northern Mongolia in relation to other gold deposits in the region.

Target

The analog deposit type being sought at Khavchuu is a Boroo-style orogenic lode gold (+ arsenic) system in low angle structures hosted in Boroogol Complex granitoids and meta-flyshoid wall rocks. Potential deposit parameters are up to 2 Moz gold at relatively high grades (2-5 g/t Au).

 

Location

The Khavchuu project is located in Sumber Soum, Tov Aimag, northern Mongolia. Access is via the main paved road toward Russian border, approximately 140 km north of Ulaanbaatar. The project area is 10 km west of Centerra Gold’s Boroo mine and mill complex, ~15 km north of the Narantolgoi underground gold mines, and is easily accessed year-round.

Regional Map Khavchuu in relation to other deposits in the Boroogol District Geologic base from Kampe 1968 Regional map showing Khavchuu in relation to other deposits in the Boroogol District (geologic base from Kampe, 1968)

Ownership

The project area is held under Exploration License 8835X issued in 2004 to Khavchuu Land Mongolia LLC (KLM), a Mongolian-registered company. The exploration license is valid until 26 November 2013. Altan Rio entered into an agreement to acquire the project from KLM in 2010 allowing the company to acquire a 100% interest subject to certain payments and production royalty schedules.

History

The general license area has been explored by various groups including the Mongolor joint venture in the 1910s which found the Boroo placer gold deposits, and the East German expedition during the 1960s – 1980s, which is credited with discovering the Boroo hard rock gold deposit. Trenches from the East German program era are visible on the project today, and the Germans likely discovered the Khar Yamaat gold occurrence along the southern border of the project. No systematic exploration was done since the 1980s, until…

KLM acquired the current exploration license in 2004 and with private European funding performed much basic ground work in 2009, including geological mapping, geophysical surveys (IP-Resistivity and ground magnetics), rock sampling and soil sampling. This work, in part based on input from Altan Rio staff, established the basic geological framework of the project and highlighted prospective targets via compelling IP chargeability anomalies. It also resulted in rock samples showing up to 3.7 g/t gold in structurally controlled veins.

Altan Rio believes the project area has very good potential to host Boroo-style gold deposits based on being located in the same geological terrain and containing very similar gold-arsenic geochemical anomalies, and IP chargeability features at depth.

image: "Drilling KH-03 at Khavchuu in March, 2012"

Recent Work

Altan Rio Mongolia performed rock sampling, detailed soil geochemical grids (~1,200 samples) and IP surveys in 2011, which led to the identification of three main drill target areas. The three main areas (A, B & C) were drilled between March to May 2012 in our first effort to gain knowledge of the subsurface stratigraphy and structure:
  • A – Target area A in the northwest part of the project has recently been investigated by a large soil geochemical grid, producing Au and As soil anomalies coincident with IP chargeability of both prospective amplitude and promising size, therefore achieving a first-priority target status. Near-vertical quartz veins in the area locally host visible gold and a gently east-dipping low-angle fault zone has been mapped in the vicinity, which projects at depth into the IP chargeability anomaly. Rock samples in the area reach 0.11 ppm Au and 842 ppm As.
  • B – Target area B in the northeast quarter, another prospective IP feature, has been rock chip sampled where strong sericite alteration exists along a high-angle structural fabric. The objective is to track the high-angle fabric down structure to a possible intersection with a near-horizontal fault zone. Rock samples in the area reach 0.15 ppm Au and 177 ppm As.
  • C – Target area C in the south part of the project appears similar geologically to target area A, also hosting gold-bearing quartz veins, and represents a very prospective IP feature in a Boroo complex granitoid – which has proven thus far to be the preferred host unit for large gold deposits in the district. A north-dipping near–horizontal structure has been mapped just south of the area, and therefore projects at depth into the IP feature. Rock samples in the area reach 0.14 ppm Au and 564 ppm As.
IP chargeability anomalies

Geophysical compilation map showing IP chargeability anomalies at Khavchuu. Area of 2011 soil grid survey shown in dashed outline. Inset shows relevant IP anomalies over the main open pits at the Boroo mine, to scale.

Drill Result Highlights

  • Seven wide-spaced reconnaissance core holes for 1,902.2 m were completed from March to May
  • Five of the seven holes intersected significant gold and/or arsenic anomalies, the main geochemical indicators for orogenic gold deposits in the Boroo region
  • Hole KH-05 intersected high grade gold (11.49 g/t over 1 m) in a structurally complicated area on the edge of a large Boroo Complex granitoid
  • Holes KH-01 and KH-03 intersected low angle structures that contained Boroo complex granitoids with similar alteration over intervals as broad as 80 meters, with locally anomalous gold
Holes KH-01 and KH-03 intersected low angle structures that contained Boroo complex granitoids with strong silica-sericite-sulfide (“QSP”) alteration over intervals as broad as 80 meters. The presence of anomalous gold in both holes and elevated arsenic in KH-03 is considered promising and could represent the distal portions of economic mineralization, perhaps several hundred meters away. See complete drill results table here. Importantly, hole KH-05 intersected high grade gold (11.49 g/t over 1 m width) in a structurally complicated area on the edge of a large Boroo Complex granitoid where previous rock sampling showed elevated gold and arsenic values. KH-05 was drilled primarily on an IP chargeability high. This is a single mineralized hole in a very large area of anomalous geochemistry and geophysics; in fact the IP anomaly broadens and increases in amplitude to the north. This new gold discovery zone is an exciting development on the Khavchuu project and certainly warrants follow-up drilling. The Company believes the results of our Phase I drill program are very encouraging and is therefore planning follow-up exploration to advance the discovery. Detailed geophysics are planned to delineate zones of higher IP chargeability within the structures confirmed by drilling, with additional soil geochemical surveys planned as well. Drilling will then be targeted to further test zones of known mineralization and the most promising geophysical anomalies.
Summary of Khavchuu 2012 Drill Program

Summary of Khavchuu 2012 drill program and gold and arsenic assay results

image: "Drill core from the Phase I 2012 drill program at Khavchuu"

Permitting

All planned exploration activities including mapping, sampling, geophysical surveys, seismic surveys and drilling/trenching are permitted.  

Geology

The general geological setting at Khavchuu is very similar to Boroo and surrounding deposits such as Ulaan Bulag. This geology is characterized by large areas of Kharaa formation meta-flyshoid units (siltstone, sandstone, argillite) of probable Middle Cambrian to Early Ordovician age, intruded by large tracts of Middle-Late Ordovician Boroo Complex granitoids and later probable Devonian leucogranites and rhyolites. The Boroo Complex granitoids and Kharaa contact zones are the loci of most gold mineralization known to date, although gold mineralization has been dated at around 192 Ma, or significantly younger than any of the mapped bedrock units. Therefore, it is conceivable that gold mineralization could exist in any permissive structural environment in any of the above described rock units. Economic gold mineralization in the district is dominated by large tonnage quartz-sericite-sulfide (pyrite, arsenian pyrite and arsenopyrite dominate), alteration commonly known as “QSP”, bodies in granitoids. These bodies usually show strong spatial association with both high- and low-angle gold-bearing quartz veins. The QSP alteration is readily imaged by IP surveys which show chargeability highs, and magnetic surveys which show coincident moderate low zones (magnetite destruction). If the bodies are exposed, geochemistry works well, showing robust gold and arsenic anomalies. Economic gold ore in the district often contains a high percentage of free-milling gold (commonly 30-50%). Ores are therefore treated with conventional milling, gravity concentration, and final CIP recovery circuits. The main geological habitat for large gold accumulations in the Boroo area are low-angle faults, probably compressional features, in the upper regions of Boroo Complex granitoids and/or at the granitoid/Kharaa contact zones. A low-angle fault zone has been identified on the west side of Khavchuu and appears to dip gently east into the license area, and ultimately would project into several zones of high chargeability. These coincident structural/IP realms are first order drill targets.
image: "Rock sample, showing a typical copper oxide stained sulfide-bearing quartz vein of the Boroogol district"


GET UPDATES DIRECT FROM THE CEO

Direct from the CEO. Opt out anytime. We’ll never spam you.