Denarius Metals’ (TSXV: DSLV) first resource estimate for its Zancudo project to revive an 18th century gold mine in Colombia confirms its high-grade potential.
The Toronto-based company plans to restart production this year from the former Independencia mine dating to 1793. It produced as much as 2 million oz. gold-equivalent until 1948 from the site 27 km south of Medellin, Colombia’s second-largest city.
The Zancudo project holds an inferred resource of 2.8 million tonnes grading 6.5 grams gold per tonne and 112 grams silver for contained metal of 576,000 oz. gold and 10 million oz. silver, Denarius said in a news release on Wednesday.
The inferred resource contains 718,000 oz. gold-equivalent when grading at 8 grams gold at a 4-gram cut-off over a 1-metre minimum width, the company said.
“We see an opportunity to develop near-term production and cash flow through local contract miners and long-term growth through exploration,” Denarius CEO Serafino Iacono said in the release. “The local contract miner has already commenced activities to rehabilitate the mine workings.”
Denarius also said Wednesday it sold its Guia Antigua gold project 130 km northeast of Medellin back to Aris Mining (TSX: ARIS) for $2.2 million to help fund Zancudo’s crushing equipment, road construction and infrastructure restoration.
The company is to carry out in-fill drilling this year to upgrade resources at Zancudo. Gran Colombia Gold (TSX: GCM) and Iamgold (TSX: IMG; NYSE: IAG) drilled its principal veins from 2011 through 2021. Diamond drilling in 149 holes totaled more than 40,100 metres, including from 33 underground holes in the old mine.
Mineralization at Zancudo occurs in stacked mantos and steeply dipping veins that have been mined over a strike length of 3,500 metres, Denarius said. The veins vary in average width from 0.35 metres to 3 metres, while mineralization runs 400 metres deep.
“The mantos and veins have early-stage base metal sulphides (pyrite, sphalerite, galena, arsenopyrite) infilled by quartz or quartz-carbonate gangue, with banded textures that are typical of epithermal veins,” Denarius said. “This initial resource estimate confirms the historically significant high gold-silver grade potential of this project as it remains open for further expansion in all directions.”
Denarius is also active in the Iberian Pyrite Belt. The company issued an C$8.3 million rights offering in January to explore its Lomero-Poyatos polymetallic project in Spain. The company plans drilling to update the project’s resource estimate and prepare a preliminary economic assessment.