Royal Road Nicaragua Alliance Agreement
On September 1, 2017, Hemco and Royal Road entered into the Royal Road Nicaragua Alliance Agreement, forming a strategic alliance to jointly explore, develop, market and exploit gold and other metal resources within their respective concessions and any additional licenses acquired in Nicaragua. The Royal Road Nicaragua Alliance Agreement covers the entirety of the Hemco Property with the purpose of identifying new gold and metal deposits within the Hemco Property, and it also gives Hemco the ability to identify and acquire an interest in new gold and other metal deposits at all of Royal Road’s concessions in Nicaragua, and any additional licenses acquired in Nicaragua by either party. New target areas or specified areas of interest are agreed upon by both parties through a joint management committee which committee must approve all activities undertaken on properties subject to the Royal Road Nicaragua Alliance Agreement. All activities conducted under the Royal Road Nicaragua Alliance Agreement are funded in equal proportions unless otherwise specifically stated.
The Luna Roja Exploration Target is a joint venture gold skarn exploration target located on the Hemco Property, approximately 26 kilometres southeast of the Panama Mine in Nicaragua. Royal Road who was the operator until January 1, 2021, has been exploring the property using a combination of soil, grab, channel sampling, ground geophysics and diamond drilling. On September 3, 2019, Royal Road declared the Luna Roja Exploration Target a “designated project area” or DPA under the Royal Road Nicaragua Alliance Agreement, constituting it a joint venture between Hemco and Royal Road. On May 1, 2020, the parties confirmed their agreement not to transfer the Luna Roja Exploration Target to a joint venture company until such time as mutually agreed between the parties after results of forthcoming drilling program are completed and agreed on certain other matters relating to the operation of the Luna Roja Exploration Target. Each of Hemco and Royal Road holds a 50% interest in the Luna Roja Exploration Target and our near term objective is to acquire the remaining 50% interest in the Luna Roja Exploration Target (to bring the Company’s interest to 100%).
In 2019, Royal Road completed a drilling program of 17 diamond drill holes totalling 2,472 metres in mid- to late-2019. Drilling identified broad zones of auriferous skarn to 150 m depth and extending 400 m northwest-southeast in artisanal mining activity area. The following table sets out selected significant intersections from this drilling program:
- The true width of the mineralized zone has not yet been determined.
- As publicly disclosed by Royal Road in its technical report titled “NI 43-101 Technical Report for The Luna Roja Property” effective June 5, 2020.
In the first quarter of 2020, Royal Road completed ground-based magnetic and microgravity surveys over the entire Luna Roja Exploration Target, which further defined further drill targets. The gold in soil anomaly is characterized by a “grainy” magnetic (TMI RTP) signature with punctual highs and lows. Three dimensional inverted gravity density data highlighted a discrete density low surrounded by a density high in the south portion of the property area which Royal Road interprets as a possible deeper, downthrown endoskarn and adjacent exoskarn bodies worthy of drill testing.
Between May and August 2020, Royal Road completed an expansion drilling program of 3,095 metres in 19 holes at Luna Roja, aimed at locally extending known gold mineralization and exploring newly identified and deeper targets identified by ground microgravity surveys. Results from this drilling program returned significant results including:
Luna Roja – Nicaragua
- At this point the true width of the mineralized zone is unknown.
- As publicly disclosed in a Royal Road press release on the website www.royalroadminerals.com, dated September 14, 2020, except for LR-DDH-036.
Caribe is a gold Exploration Target located on the Hemco Property, approximately 42 kilometres southeast of the Panama Mine, and 26 km southeast of the Luna Roja Exploration Target, in Nicaragua. The Caribe Exploration Target is owned by Hemco and is held subject to the Royal Road Nicaragua Alliance Agreement. Royal Road is the operator of the Caribe Exploration Target. If this target is designated a “designated project area” under the Royal Road Nicaragua Alliance Agreement, the Caribe Exploration Target would be held subject to a joint venture under which each of Hemco and Royal Road would hold a 50% interest.
In February 2018, exploration targets at Caribe were identified by Royal Road during reconnaissance follow-up of airborne geophysical anomalies. In 2019, Royal Road and Hemco completed an initial 4-hole, 413 metres, exploratory drilling program at Caribe which returned significant intersections including:
- The true width of the mineralized zone has not yet been determined.
- As publicly disclosed by Royal Road in their technical report titled “NI 43-101 Technical Report for The Caribe Property”, effective June 5, 2020.
Drilling confirmed significant near surface intercepts of gold mineralization related to quartz-carbonate-adularia-pyrite stockwork veinlets hosted in volcanic units.
In August 2020, a follow up diamond drilling program of approximately 2,000 m was initiated at the Caribe Exploration Target and 10 drill holes were completed for a total of 1,656 metres. Drilling is ongoing.
Lower-grade gold (less than 1 g/t Au, applying a 0.2 g/t Au cut off) is notable in longer intersections including CB-DDH-006 which returned 144 m at 0.7 g/t Au from 6.0 m to 150 m , CB-DDH-009 which returned 146 m at 0.7 g/t Au from 0.0m to 146.0m , and CB-DDH-011 which returned 80 m at 0.7 g/t Au from 0.0m to 80.0 m (Press Release Royal Road - Nov, 10 2020). Generally gold mineralization is associated with elevated molybdenum and copper.
Gold, copper and molybdenum mineralization is almost exclusively hosted within a multi-phase breccia body, disseminated in the breccia matrix and within crosscutting quartz veinlets. The breccia body is interpreted to be a diatreme or fissure-controlled breccia. Fine free gold is associated with chalcopyrite and molybdenite with traces of bornite and covellite. Alteration is predominantly chlorite-sericite. The mineral and alteration assemblages imply a porphyry-style association and are interpreted to suggest a porphyry copper-gold target beneath or adjacent to the breccia body.
On March 2, 2020, the Company and Royal Road entered into the Royal Road Colombia Agreement, a strategic alliance to jointly identify, explore, develop, market and exploit gold and other metals resources at areas covered by Royal Road’s and the Company’s respective existing licenses, which together cover a region of highly prospective and under-explored areas in Colombia The Company has the option to acquire a 25% interest in the GNM Exploration Target by funding $1 million of exploration expenses, and a second option to acquire a further 25% interest by funding a further $1.5 million of exploration expenses.
The GNM Exploration Target comprises two contiguous concession contracts and one concession application located in the Anza mining district, 50 km west of Medellin, which Royal Road acquired in 2019 from AngloGold Ashanti Limited, a publicly listed global gold producer.
As part of the strategic exploration alliance with Royal Road, in 2020 Mineros contributed 100% towards the exploration expenditures including mapping, drilling and sampling on the Guintar-Niverengo concessions and its Margaritas title application (“GNM Exploration Target”). AngloGold Ashanti commenced work on the project area in 2015 and completed two scout drilling campaigns for a total of 5662 meters. The Guintär title area covers an artisanal mining district with more than 50 known historic underground adits developed on steeply dipping east-west oriented gold mineralized vein structures.
Royal Road has completed an initial 1,179 metre diamond drilling program focused on the Niverengo title area and plan to complete a further 5,000 metres in 2021. Drilling intersected skarn-style mineralization hosted primarily in folded calc-silicate sedimentary rocks with gold, silver and copper.
At Niverengo, gold mineralization is related to garnet, pyroxene and early pyrrhotite skarn alteration that recent geochemical vector studies have identified as being distal from what may be the primary gold source. This implies that further drilling should target deeper probably intrusion-related, vein or breccia bodies identified in in the study.
Work planned for the GNM Exploration Target in 2021 includes further field-based studies and refine drill targeting at Guintär and Niverengo. Concurrently, Mineros has applied to the Secretary of Mines in Antioquia for conversion of the Margaritas application to an exploration-stage concession contract prior to drilling targets in the GNM area.