SAIDF - Fidelity Acquires a Further 5.5% of Las Huaquillas for Total Ownership of 50% and Announces Exploration Program
(TheNewswire)
Vancouver, BC - TheNewswire - July 21 st , 2021 - FidelityMinerals Corp. (TSXV:FMN )(OTC:SAIDF) ( FSE:S5GM |SSE:MNYC) (“ FidelityMinerals ” or the “ Company ”) is pleased to announce that its wholly owned,Peruvian subsidiary Minera LBJ SAC has signed a binding agreementwith Alexander Ernesto Vidaurre Otayza and Lida Avelina PimentelJibaja to acquire an additional 5.5% of Rial Minera SAC ( “Rial” ) whichowns the highly prospective Core Las Huaquillas precious and basemetal property (the ”Project” or “CLH”) in northern Peru. Uponclosing of the transaction, the Company will hold a 50% interest inRial (and thereby CLH).
On February 11, 2019, the Company acquired a 44.5%interest in Rial which owned the portfolio of mineral concessions thatcomprise the CLH project. The concessions are located immediatelysouth of the border with Ecuador, where recent exploration success andcorporate activity in the Ecuadorian mining sector has demonstratedthe potential of an historically underexplored region.
The CLH is located within the Greater Las Huaquillas (“GLH”) Project which comprises a significant land package assembledby the Company. The GLH project consists of:
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- the 9 CLH concessions that host the historical gold,copper, zinc and lead mineralization totalling approximately 3,600 Ha,and
- 9 additional concessions located contiguous with CLHand staked by Fidelity (100%).
The mineral concessions are shown in Figure 1.
The CLH Project features extensive historicalexploration completed through 1999. This work included soil sampling,geophysics and 5,742.9m of diamond drilling (26 drill holes), and theexcavation of approx. 1,200m of underground development on threelevels in the Los Socavones Zone. This work defined 5 mineralisedzones, consisting of 4 mineralisation types including epithermal andporphyry style mineralisation at the Project.
The project has not been the subject of a resourceestimate compliant with NI43-101. However, the most advanced of the previouslyrecognised mineralised zones, the Los Socavones Zone, was partiallyappraised by Sulliden Exploration Inc, (23 June1998 and Annual Report (1997-98)). Sullidenestimated that a 500m section of the 2,200m long Los Socavones structure hosts a historical near-surface geologicalresource of 6.57 Mt grading 2.12 g/t Au and 25.2 g/t Ag, equivalent to446,000 ounces of gold and 5.3 million ounces of silver at a 1 g/t Aucut-off. The historical resource, based on 10 drill holes and 20mineralized intercepts, was estimated to a depth of 200m, and isreported as an historic resource estimate in an NI 43-101 TechnicalReport prepared for a party unrelated to Fidelity in August 2011. TheLos Socavones Zone remains open down dip and along strike in bothdirections (northeast and southwest). The historical resourceappraisal encountered shallow mineralisation in several drill holes.Drill hole LH97-08 drilled by Sulliden, intercepted 78 metres of2.7g/t Au from surface, highlighting the potential for low-cost, opento surface mining operations. The significant base metalmineralisation identified during historical exploration within the LosSocavones Zone was not included in the historical resource estimate.
Sulliden concluded that “The overall geologicalsetting suggests that the Las Huaquillas property compares well withother caldera-related, porphyry copper-gold systems of the CircumPacific Rim. Based on the data presented here, the Los Socovanes zoneis interpreted as an epithermal gold-silver-tellurium system …superimposed on a porphyry system. This superposition is an importantcriterion used in identifying world-class deposits (Sillitoe, 1994,1995b).”
Following a detailed review of the project, in March2012, a subsequent operator (Strategic Review and Business Analysis,Inca One Resources Corp, 9 March 2012) published a report indicatingthat the “Los Socavones zone alone might be able to demonstrate thepotential for between 0.6 million and 4.0 million gold and goldequivalent silver ounces respectively through future drilling, basedon its historic resource estimate and assumed dip and strike lengthextensions within the current concession boundary.”
Whilst these resource studies are historical in natureand are not consistent with NI 43-101 standards, they provide theCompany with confidence that the Project represents a largemineralised system, with opportunities to potentially delineate asignificant mineral resource. In addition to the precious metal endowment, preliminary reviews of historicalstudies by past operators as well as the Geological, Mining andMetallurgical Institute of Peru (INGEMMET- Pre-Evaluation of theTecto-economic Potential of the Epithermal Gold Resource at LasHuaquillas, INGEMMET, 31 January 1999) by Fidelity, have alsoidentified significant base metal prospectivity. An historical reportby INGEMMET outlining encouraging metallurgical recoveries for goldand silver from samples sourced from the Los Socavones Zone, alsohighlights the potential to produce a zinc concentrate, from broadzones of zinc mineralisation with reported grades as high as 2-3%Zn.
In addition to the Los Socavones epithermal gold zoneand associated base metal prospectivity, historic drilling outside theLos Socavones Zone also identified two potentially large porphyrycopper-gold zones, Cementerio and San Antonio. These targets are welldefined by geophysics (ground magnetics and Induced Polarization) andare coincident with geochemical and geological features similar toknown mined porphyry style copper deposits. Although historicalexploration of these targets has confirmed the presence of copper-goldmineralisation, these targets have not been sufficiently appraised tohave supported the preparation of resource estimates by prioroperators.
The Company has not conducted anywork to establish the relevance & reliability of the historicalestimate. There has not been sufficient drilling and/or sufficientprevious exploration at Las Huaquillas upon which to base a mineralresource or mineral reserve estimate compliant with the standards ofNational Instrument 43-101. It should be noted that the historicalresource related information outlined in this announcement has beenderived from: NI 43-101 Technical Report (the “Technical Report”)on the Las Huaquillas Au, Ag, Cu Property, Cajamarca, Peru (15 August2011).
For additional information, refer tothe Disclaimer & Forward-Looking Statements section of thisannouncement. The technical information in this announcement has beenprepared in accordance with the Canadian regulatory requirements setout in National Instrument 43-101 (“NI 43-101”) and has beenreviewed and approved on behalf of the Company by Luc Pigeon B.Sc.,M.Sc., P.Geo., a Qualified Person under NI 43-101.
Per the terms of the agreement, the Company can acquirean additional 5.5% ownership of the Project by completing thefollowing;
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- Total cash consideration of $500,000 US payable intwo instalments. The first instalment of $300,000 US to be paid uponsigning the agreement. An additional $200,000 US to be paid threemonths after signing.
- The Company will fund up to $3,000,000 US inunderground sampling and exploration drilling to underwrite thepublication of a new NI 43-101 technical report aimed at declaringinferred resources and to be completed within 18 months followingreceipt of drilling permit approvals.
Rial Minera SAC, led by Fidelity, will immediatelycommence planning for the upcoming exploration program to includecommunity relations, environmental permitting, geologic mapping and sampling, underground sampling andmetallurgical testing, geophysics, 5,000m to 7,500m of diamonddrilling, to culminate with an NI 43-101 technical report. Once the NI 43-101 is completed, the Company will haveearned it’s 50% ownership in the CLH Project and the partners inRial will enter into a participating Joint Venture (“JV”) for theoperation and financing of Rial.
Once the JV is established, the JV partners will definefurther exploration programs and other value accretive activities. Inthe event of negotiation for the sale of all or part of the Project, the JV partners will establish a consideration sale price in linewith standard project acquisition valuations based upon ‘in theground’ gold equivalent values being realised in the market forresource projects. Each JV partner will hold a right of first refusalon any sale of any of the other’s interest in the JV(“Preferential Acquisition Right”). In addition, the JV partnersagree to a “Right of Co-sale (Tag Along)” provision whereby if thePreferential Acquisition Right is not exercised, each partner willhave the right to participate in the sale for the same price and underthe same conditions as the other partner. Any sale will be subject toa 2.5% NSR, which will accrue to the JV partners in proportion totheir ownership. No buydown clause was included at this time.
Mr. Pekeski commented: " The acquisition of this additionalinterest in the mineralized, world-class Las Huaquillas Projectprovides the Company with a significant resource appraisal opportunitywhich we expect to immediately advance. Fidelity`s goal is to rapidlyunlock value from Las Huaquillas, by completing meaningful, systematicexploration that we are confident the market will reward as wedelineate substantial gold and copper resources. This will start with planning andpermitting the drilling program and re-establishing the undergroundworkings on the property so they can be accessed for metallurgicalsampling. I believe that through successful exploration, Fidelity`svalue will be rerated in line with the valuations of larger peers withsimilar stage Projects. "
CLH Project - Historical ResourceAppraisal
In 1997 and 1998, Sulliden carried out an integratedtwo phase exploration program including; line cutting, geophysics,soil, stream, rock geochemical and geological surveys, and 26 diamonddrill holes (DDH) were drilled by Sulliden, for a total of 5,671m(refer Fig. 2). The gold-silver epithermal mineralization discoveredalong the Socavones trend was followed for at least 2.1 kilometres viageophysics, soil and rock sampling and drilling. Five significantmineralized zones were identified at the project as follows: (i) LosSocavones, (ii) El Huabo, (iii) Las Huaquillas, (iv) Cementerio and(v) San Antonio (refer Fig. 1). Four deposit types have beenidentified at the Las Huaquillas project:
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- Epithermal Au-Ag; low sulphidation at the El Huaboand Las Huaquillas showings of the Los Socavones zone.
- Epithermal Au-Ag-Cu; high sulphidation at thePorvenir- Huabo Alto silicified ridge.
- Au, Ag, Zn. Pb-quartz stockwork at the LosSocavones.
- Porphyry Cu ± Mo ± Au within the Cementerio and SanAntonio intrusions.
Sulliden estimated that a 500m section of the 2,200mlong Los Socavones structure hosts a historicalnear-surface geological resource of 6.57 Mt grading 2.12 g/t Au and25.2 g/t Ag, equivalent to 446,000 ounces of gold and 5.3 millionounces of silver at a 1 g/t Au cut-off. The historical resource, basedon 10 drill holes and 20 mineralized intercepts, was estimated to adepth of 200m, and is reported as an historic resource estimate in anNI 43-101 Technical Report prepared for a party unrelated to Fidelityin August 2011. The Los Socavones Zone remains open down dip and alongstrike in both directions (northeast and southwest). The historicalresource appraisal encountered shallow mineralisation in several drillholes.
Significant Mineralised Zones –Historical
The Los Socavones anomaly is a major NE-SW trendingmineralized fault zone that extends for at least 2.5km and has a widthof approximately 100m. The anomalous zone consists of two distinctAu-enriched pyrite-sphalerite-galena quartz stock-work zonessurrounded by a low-grade gold zone composed of disseminated andnarrow stringers of pyrite with minor sphalerite andchalcopyrite.
To date, 1,000m of its strike length has been drilltested and 400m underground workings including 100m verticaldevelopment has been carried out. Drilling has intersected themineralization at a depth of approximately 200m. The mineralized zoneaverage true thickness is approximately 19 m with a maximum thicknessof 65m within the zone’s centre.
The Cementerio Cu-Au porphyry system is located 1,000msouth of the Los Socavones zone. It comprises extensive argillic,phyllic and hematitic alteration partly visible along the road leadingto the Las Huaquillas village. A 600m by 900m sub-circular multi-phasediorite intrusion characterized by equigranular and porphyritictextures is spatially related with the mineralization.
The San Antonio porphyry system is located 1,000m NW ofthe Los Socavones zone. It coincides with a prominent copper- goldsoil geochemical anomaly and is hosted in a calc-alkaline quartzdiorite intrusion measuring 500m x 900m. The host rock is massive,homogeneous and is composed of 15% well-formed 2-mm plagioclasephenocrysts lying in a finer groundmass composed of amphibolefeldspar-quartz-chlorite- biotite-magnetite-sericite.
Fig 1: SignificantMineralised Zones at Las Huaquillas
The El Huabo Au-Ag anomaly is located near the LosSocavones structure within altered plagioclase porphyritic volcanicrocks members of the Oyotún Formation.
The Las Huaquillas anomaly is located some 850m to theNE of the El Huabo anomaly. The mineralization is hosted in stronglysericitized and argillic altered Oyotún Formation rocks that arecrosscut by narrow quartz veins and accompanied by fine quartz vugfilling. The geological similarities between the Las Huaquillas andthe El Huabo anomalies indicate that both are part of the samelow-sulphidation epithermal system developed along the Los Socavonesstructure.
Table 1: HistoricalExploration Activities
Significant Intercepts
Historical drilling at the Los Socavones Zone reportsignificant mineralized intercepts, the best of which is Sulliden DDHintersection (LH97-08): 67.5m core length (approximately 53m truewidth) grading 2.7 g/t Au and 15.3 g/t Ag. Hole LH-97-04, whichreturned 0.47% Cu, 0.11 g/t Au and 4.5 g/t Ag over 99.5m (drilllength), demonstrated the size potential of Cementerio’s phyllicring. Similarly, San Antonio drilling (LH97-17) also intersectedsignificant mineralization; up to 0.32% Cu, 0.45 g/t Au and 3.0 g/t Agover 69.0 m (drill length), including an interval grading 0.46 % Cu,0.74 g/t Au and 4.9 g/t Ag over 21.0m.
Luc Pigeon B.Sc., M.Sc., P.Geo., a Qualified Person inthe context of National Instrument 43-101, has read and approved thetechnical content of this News Release.
About Fidelity Minerals Corp.
Fidelity Minerals Corp. has assembled a portfolio ofhigh-quality mining assets in Peru and aims to delineate majordeposits on these properties that could attract the interest ofmid-tier and major mining companies. Fidelity has a portfolio of fourkey assets in Peru and is currently focused on progressing its twomost advanced projects – Greater Las Huaquillas (GLH) and LasBrujas. Fidelity is also looking to opportunistically expand itsproject portfolio with accretive acquisitions. The company is backedby an experienced management team with diverse technical, market, andcommercial expertise and is supported by committed and sophisticatedinvestors focused on building long term value.
On behalf of the Board of Fidelity Minerals.
Dean Pekeski
CEO, President and Director
Tel: +1.778.828.9724
Email: dean@fidelityminerals.com
For more information, please visit the corporatewebsite at http://www.fidelityminerals.com orcontact:
NEITHER THE TSXVENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM ISDEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTSRESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
Disclaimer & Forward-LookingStatements: This news releasecontains forward-looking statements. Forward-looking statements arestatements that relate to future events or future financialperformance. In some cases, you can identify forward-lookingstatements by the use of terminology such as “may”, “should”,“intend”, “expect”, “plan”, “anticipate”,“believe”, “estimate”, “project”, “predict”,“potential”, or “continue” or the negative of these terms orother comparable terminology. These statements speak only as of thedate of this news release. This news release may also containinferences to future oriented financial information (“FOFI”)within the meaning of applicable securities laws. The information inthis news release has been prepared by our management to provide acontext for the further acquisition of 5.5% of Las Huaquillas and toprovide the reader with an outlook for our future activities andanticipated key milestones and may not be appropriate for otherpurposes. Forward-looking statements in this announcement include,(but are not limited to) advancing certain key project activities thatcould represent important milestones which the Company expects mayrepresent material valuation catalysts, such as the expectation thatthrough the assembling of aportfolio of high-quality mining assets in Peru, the Company aims todelineate major deposits on these properties that could attract theinterest of mid-tier and major mining companies. Further, forward-looking statements inthis release include that Fidelity Minerals Corp. is also looking to opportunisticallyexpand its project portfolio with accretive acquisitions.
There has not been sufficientdrilling and/or sufficient previous exploration at Las Huaquillas uponwhich to base a mineral resource or mineral reserve estimate compliantto the standards of National Instrument 43-101. It should be notedthat the historical resource related information outlined has beenderived from: NI 43-101 Technical Report (the “Technical Report”)on the Las Huaquillas Au, Ag, Cu Property, Cajamarca, Peru (15 August2011).The historical estimate is based upon Gariepy and Vachon (bothregistered in 1999) and the estimate was performed using the verticallongitudinal section method including seventeen mineralizedintersections where a specific gravity of 2.8 g/cm3 and a cut-offgrade of 1.0 g/t Au over a minimum width of 3 metres were applied.Gariepy & Vachon (1999) disclosed what they call a “geologicalresource” which is not a category accepted by prevailing disclosurestandards, and at best corresponds to an Inferred Resource intoday’s nomenclature. The work did not estimate the zinc, lead orcopper contained within the Socavones zone. No more recent estimatesor data is available to the issuer; at a minimum, several holes wouldneed to be twinned, and certain historical intercepts re-assayed, toverify the historical estimate as a current mineral resource. Forclarity, a qualified person has not done sufficient work to classifythe historical estimate as a current mineral resources or mineralreserve, and the Company is not treating the historical estimate as acurrent mineral resource or mineral reserve.
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