Valle del Cura

Golden Arrow's Valle del Cura properties are located in Northwestern Argentina adjoining the well know Pascua and Veladero gold discoveries. Since the mid-nineties, over 37 million ounces of gold resources have been discovered in this emerging gold region which straddles the international border between Chile and Argentina, highlighting the exploration potential of the region.

The Company has a large land package throughout the Valle del Cura region, including projects adjacent to the Pascua and Veladero, as well as several properties to the north and south.

Valle del Cura Region History & Overview

Location and Access

Golden Arrow's Valle del Cura properties are located in Northwestern San Juan Province close to the international border with Chile in the main Andean mountain chain.

The main service centre for the region is the provincial capital of San Juan, located approximately 350 kilometres by road to the southeast. The area is accessed by 190 kilometres of paved highway from San Juan to Pismanta, a quiet spa resort near the foot of the Cordillera, and thence by 160 kilometres of well-maintained gravel road which traverses Conconta Pass, at an elevation of 4,850 metres. The road is closed during the winter months, typically from mid-May to mid-September.

Once through Conconta Pass, the final 100 kilometres traverse upland valleys of the Rio Valle del Cura and Despoblados Flats to the two main mining camps at Veladero (Homestake) and Lama (Barrick). Road access to most of the properties is possible from the main road and secondary trails. Upland areas of some properties require mules to facilitate effective exploration coverage.

Spurred principally by increased mineral exploration and development in the border regions, Chile and Argentina have recently ratified a landmark treaty to facilitate access and development of properties in the border region from either country. Barrick is already taking advantage of this to develop the Pascua deposits, which straddle the international border, as one operation, serviced and accessed from both countries.

The border region coincides with the spine of the Andes, marked by a succession of active or recently active volcanoes. These volcanoes are a key part of the systems which generate near surface epithermal mineral deposits such as Pascua and Veladero, and further south the El Indio Mine of Barrick in Chile. This geologic terrain is termed the El Indio Belt, and is not restricted by artificial international boundaries. Chile has long been a focus of intensive exploration, but Argentina languished until the country's mining law was revised in 1993, allowing international groups more access and freedom to operate in the border areas.

Exploration History and Known Deposits of Valle del Cura Region

Golden Arrow's Valle del Cura properties all lie within the Argentine portion of the El Indio Belt, which is defined by the presence of young volcanic and associated intrusive rocks within a fault-bounded north-south zone straddling the Chile-Argentine border. These volcanics and intrusives are associated with large zones of hydrothermal alteration, and in some cases economic precious metal mineralization. The alteration zones are readily visible on large-scale photos taken by the LandSat satellites, and commercially available at reasonable cost. These satellite images provide a first pass screening and targeting tool for ground acquisition and property evaluation.

Until the mid-nineties, exploration in the region mainly focused on seeking high-grade vein deposits similar to those exploited at the El Indio Mine. With the identification of large zones of low-grade gold-silver mineralization at Pascua and Veladero, the focus has changed towards this style of mineralization which is more amenable to cheaper, larger scale open pit mining methods.

Geologically speaking, both Pascua and Veladero are high sulphidation epithermal deposits, formed near the earth's surface and associated with the same processes which form the volcanoes visible from most points in the Valle del Cura. The ore minerals contained in these deposits are deposited from hot, mineral-bearing waters which circulate within the volcano. At and near the surface, these waters, now very acidic and depleted of their precious metals, attack many of the minerals in the volcanic rock to form distinctive alteration zones which can be identified visually and from computer-enhanced satellite images.

At Pascua, the mineralization is classified as high sulphidation style on the basis of the quartz-alunite alteration and enargite-pyrite ore mineralogy. The deposit lies at the western margin of an oval-shaped alteration system measuring 10 kilometres in the longest dimension. Gold, silver and copper mineralization occurs within a core zone of pervasive quartz-alunite alteration. The mineralization is largely hosted in granitic and rhyolitic basement rocks of the Permo-Triassic age Choiyoi Formation. Tertiary igneous rocks, although spatially related to the mineralization, are relatively scarce. Ore grade values occur in strongly altered zones along N-S and NW-SE trending faults. A vertical control is also apparent, with the economic mineralization forming a 100 to 200 metre thick blanket-like zone between 4600 and 4800 metre elevations.

Gold mineralization at Veladero is hosted in Tertiary-aged volcanic rocks, largely consisting of a complex variety of breccias. The breccias were highly permeable and were pervasively silicified. Gold mineralization is associated with black silica-sulphide breccias. At Amable, alteration grades downwards from silicified breccias to silica-alunite-jarosite, grading into silica-alunite at depth. High and locally bonanza gold grades occur in association with crystalline jarosite which overprints silicification. As at Pascua, there is a marked vertical control on mineralization, with the target zones lying between 4100 and 4400 metres in elevation.

IMA 1999-2000 Exploration Results

Phase 1 Program

Exploration crews mobilized to the Valle del Cura in late October 1999, with an operational base being established at Despoblados Flats, a location central with respect to the IMA properties. Work was carried out on six of IMA's eight properties, with the major focus on the Potrerillos and Rio de las Taguas properties under the terms of the financing/option agreement with Barrick.

The initial work at Potrerillos and Taguas consisted of reconnaissance geological mapping and rock, soil and stream sediment geochemistry over almost all of the two properties. This work was successful in defining six target areas for follow-up investigation during the Phase 2 program carried out between January and April 2000.

Similar less detailed work was also carried out over parts of the Gollete, Banitos, Jaguelito and Despoblados properties, leading to the identification of two additional targets, one each on Gollete and Jaguelito.

Phase 2 Program

This work commenced in late January 2000, and was principally directed towards the six targets identified on Taguas and Potrerillos. The work consisted of gridding, semi-detailed rock and/or soil geochemical sampling, and ground geophysical surveying. The geophysics was carried out by Quantec Geofisica Argentina SA and consisted of ground magnetics, induced polarization, resistivity and CSAMT surveys. The last three all measure variations in the electrical properties of the underlying rocks; areas of metallic mineralization usually are anomalous in their electrical properties, thus allowing prospecting of the subsurface to a depth of 150-200 metres.

The results of the Phase 2 work enhanced the prospectivity of four of the target zones, the Ridge Zone on Rio de las Taguas, and the Fabiana, Panorama and Narelle Zones on Potrerillos. The Fabiana Zone was selected for initial drill testing late in the season.

Phase 3 Program

The Phase 3 drilling program at Fabiana commenced in mid-April and was curtailed by the onset of winter on May 10th. The main target was at Fabiana Norte, where alunite-altered felsic volcanic breccias with anomalous arsenic, lead and gold geochemistry overlie an E-W trending resistivity anomaly at depth. This information was interpreted to represent a buried epithermal alteration system.

Nine reverse circulation holes totaling 1,785 metres were drilled. This drilling intersected a shallow dipping felsic volcanic sequence up to 40 metres thick overlying massive andesite lavas. Within the andesites, a number of narrow intervals with anomalous gold values (up to 1.4 g/t Au over 1.5 metres) were intersected, associated with quartz veining or clay-altered fault zones.