St. Elias Mines says exploration program to start at Chance E concession, Peru

St. Elias Mines (CVE:SLI) said Tuesday that exploration on the Chance E mineral concession that adjoins the company’s wholly-owned Tesoro gold project in south-western Peru will be starting in the upcoming weeks.

Exploration work will consist of geological mapping and sampling, interpretation of satellite imagery acquired, as well as control grid emplacement.

The Chance E Claim is a strategic claim that adjoins the southern end of the Tesoro gold project, where St. Elias is currently drilling to delineate gold resources.

The company said that geological information, together with Titan 24 geophysical data and satellite imagery, confirm that structural lineaments, which are coincident with gold mineralization on Tesoro, extend onto the Chance E Claim.

Under an option agreement, IntiGold Mines (CVE:IGD) can acquire a 60 percent interest in the Chance E Claim, subject to a 1.5% net smelter royalty, in exchange for a cash payment of $500,000 to St. Elias, 1.0 million IntiGold common shares and spending $1.0 million in exploration costs on the property over a three-year period.

IntiGold’s first year commitment under the option agreement is to pay $25,000 to St. Elias and incur $200,000 in exploration expenditures.

“The board of directors of Intigold and St. Elias are excited to be initiating the exploration of  the Chance E claim which is on strike to the numerous gold bearing veins occurring on the adjoining Tesoro Property,” said St. Elias president and CEO,  Lori McClenahan.

In late January, St. Elias unveiled further details on drill results at Tesoro announced earlier that month. The previously announced assay results were initial results from 11 diamond drill holes, or 4,375 metres of a planned 5,500-metre phase IA drill program at the project.

Drilling is testing high-priority targets identified by a 2009/2010 Titan 24 geophysical survey at Tesoro. The company said summary drilling results will be announced once the phase IA program is completed, and the compilation and interpretation of all data is finished.

Up until that point, drilling had focused on the anomaly at Zone Central, where drill hole TE-11-06 returned “compelling initial results”.

While additional drill testing is required, the company was in the process of completely sampling the hole from 60 metres to 170 metres on minimum 1.5-metre intervals to more accurately define a potential, bulk-tonnage mineralized target, it said.

The interval from 90.6 metres to 128.5 metres in hole TE-11-06 assayed 0.74 grams per tonne (g/t) gold over 37.85 metres, including 0.74 metres of 23.5g/t gold at 112.26 metres and 0.35 metres of 9.6g/t gold at 113.32 metres.

St. Elias said at the time these mineralized intersections led it to fine tune additional exploration targets for drilling.