Understanding SolGold’s Porvenir

 

After a change in how often regional exploration news is released, we have the first update on Porvenir for nearly a month. In that time and since my last update, SOLG have produced assays for the first 750m or so of hole 1. It has finished hole 2 to 1300m, observing mineralisation to 1200m. It has produced assay results for the first 500m of hole 2 and SOLG has started hole 3, drilling to 450m.

SOLG has deployed a second rig to drill pad 2 (250m WNW of hole 1) and started drilling hole 4 to 50m. It has also deployed rig 3 to drill pad 3 (200m S of hole 1) which is due to start hole 5 very shortly. In conclusion there has been considerable activity in the last month all with the aim of understanding Porvenir.

In the near future a forth rig is due to be deployed. Assays are likely to take a little longer. Ecuadorian exploration companies are currently looking at 5-6 weeks for assay results due to the impact of Covid and the amount of drilling currently under way.

 

Unfortunately for investors the aim of the exploration isn’t about finding the most gold and copper, at least not directly. Porphyry Copper Deposits (PCD’s) all share similar characteristics, each characteristic has a similar mineralisation theme, so understand this and you understand where the best grades are. You will almost certainly sample the best grades if all components are found.

As per the diagram above, the major components are:

The low grade core.

The side mineralisation stacks, sometimes breccia’s etc, high grade (normally the best grade, often called the mineralisation core)

The inner pyrite shell or high pyrite content shell

The outer pyrite shell or lower pyrite content shell – both components, inner and outer shell can be present or just one, they are sometimes referred to as a mineralisation halo around the core intrusion.

The peripheral zone or alteration zone, which is a leached zone of low-moderate or good mineralisation.

The PCD is a bubble of mantle which rises up to near the surface, the mineralisation is then pushed through veins away from the source intrusion, as the pressure subsides and it cools the mineralisation is left behind. The rate of cooling helps to determine the mineralisation present, hence the outer shell of quartz pyrite etc.

Porvenir hole 1, showed evidence of reworking (at least 2 major re workings), so you need to picture the cooling and retreat, then a fresh wave of mantle intrusion changing it all a second time (new veins, extra shell formation in different places etc), alteration of the structure etc. Then possibly a third.

So SOLG needs to find the intrusion, the shell and the alteration zone. It needs to understand how far down these extend and importantly how far out the alteration zone extends. To find the best grades it needs to discover the vertical edge of the intrusion.

Hole 1: Intersected a small portion of the Shell and some of the alteration zone. It also seems to have intersected smaller portions of the intrusion core, thiner tendrils, that are low grade.

Hole 2: Initially went through surface alteration, then the PCD high quartz shell, before entering the low grade intrusion core. We don’t yet know whether the drill has come out the other side of the core, as assays are down to 500m. However assays have clearly identified the core characteristic of a PCD.

Hole 3: Has one job, to sample and confirm the spread and extension of the alteration zone. It looks like it will be drilled to 900m or until mineralisation ends. The shallow dip of the hole is such that adding even 100m to the alteration zone, provides a large extension of the resource area. CUEQ% of .3 or .4% would be more than adequate to if it extends beyond 450m. The full 900m would be high end tier 1.

Hole 4: This has a more complicated job. It’s trying to find the WNW extension of the alteration zone for 200-400m. Then sample the thinner, higher quartz/pyrite shell on the edge of the intrusion 100-150m. Hopefully it will then sample the bonanza, top grades of the mineralisation zone 200-400m. Finally entering the intrusion core, potentially coming out from that.

Hole 5: Not much detail on this, but it looks to expand the alteration to the south, possibly looking to hit the main structure from a southerly angle.

There is more than a little guess work in the above, as very limited information has been given so far. What we can confirm is the presence of a PCD, we can confirm the .4% to .8% CUEQ% in some of the lesser mineralisation zones, which is exceptional and we can confirm a substantial structure of tier 1 potential. Holes 2-5 have been chosen to provide firm evidence of all the PCD components, with indicative grades along with a 1km by 1km by 1km footprint.

It is important to understand what each hole is trying to prove when assessing the success or failure of the results as they are released. Hole 1 and 2 have proved everything that has been asked of them so far, showing strong evidence of a substantial open pit, good grade PCD. This is the kind of project that Major’s will happily mine all day, lots of reserves on the balance sheet, steady predictable return and LOM measured in generations.

So the future looks bright copper and golden for Porvenir.