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La Victoria Gold/Silver, Peru

On March 3, 2017, EHR announced that it had entered into an agreement with TSX-V listed Eloro Resources Ltd to earn up to 25% in the La Victoria gold-silver project.

Project Description

La Victoria is located in the North-Central Mineral Belt of Peru. Comprising approximately 80 square kilometres, La Victoria sits on the western slopes of the Peruvian Andes at elevations that vary from 3000m to 4500m above sea level. La Victoria is located within 50 km of several producing mines including: La Arena, owned by Tahoe Resources, Lagunas Norte (Alto Chicama) owned by Barrick Gold Corporation and Santa Rosa owned by Compañia Minera Aurifera Santa Rosa (COMARSA).

The geological setting at La Victoria exhibits the same rock types, alteration style and mineralisation as several of the world-class gold mines in the Northern Peru Mineralized Belt. La Victoria has never been drilled, yet major mineralized targets with very prospective results from Eloro surface sampling and artisanal mining have been known since the 1970’s.

Status of Earn-In Arrangement

In December 2017, EHR completed the first stage of the farm-in by contributing CA$2 million to exploration, and as a result earned an initial 10% interest in the Project.

In March 2018, Eloro and EHR restructured their arrangements for the Stage 2 Earn-in Period by dividing Stage 2 into two components, Stage 2A and Stage 2B (refer ASX Announcement lodged 2 March 2018). Under these restructured arrangements, EHR committed in Stage 2A to spend CA$1.6m on exploration to earn an additional 8% interest in the Project. Stage 2A was completed in 2018 with the Company now holding an 18% interest in the Project.

Following completion of Stage 2A, EHR may elect to proceed with Stage 2B, whereby EHR would earn a further 7% interest in the Project by spending an additional CA$1.4million on exploration. Under the current arrangements with Eloro, EHR is not required to make any final decision in relation to proceeding with Stage 2B until drilling permits are issued for the proposed San Markito exploration program.

Drilling Programs

During 2018, three diamond core holes totaling 1,242 meters were completed to test the Rufina East target area, one of the six target zones that form part of the Project. Highlights included 1.40m at 3.71g Au/t from 367.0m to 368.3m, and 0.60m at 3.00g Au/t from 105.7 to 106.3 in drillhole ERU-10. All results and details of the drilling are reported in EHR’s press release dated 14 August 2018.

In total, twelve drill holes totaling 4,281m have been drilled in Rufina. All the reconnaissance drill holes intersected extensive zones of mineralization and alteration, and many of the anomalous gold intervals correlate with mineralized zones mapped at surface. These results are considered positive and provide indications of a large-scale epithermal gold system at La Victoria, and Eloro as operator of the Project has determined that further drilling will focus on the likely overall major core area which is believed to be San Markito, located 2.7 km north of Rufina (see figure). San Markito is considered the best target identified to date on the property, where gold and silver mineralization are found in an extensive symmetric zone within both the favourable Chimu formation sediments and dioritic intrusives. The San Markito contact zone target is some 1,300 meters long and 400 meters wide. The initial drill program will be for 4 to 6 diamond holes totaling around 2,000 meters. Further geological mapping and sampling over this target zone is also to be undertaken.

In order for a drilling campaign to commence at San Markito, drill permits must first be obtained which, in Peru, are required to be underpinned by a process of local community engagement and support. Through 2019 and early 2020, Eloro has continued to progress land access and land rental negotiations with the local community in the Pallasca District, Ancash Department, Peru, where the San Markito target is located. Eloro remains confident the requisite approvals for San Markito will eventually be forthcoming, following which it is planned to commence a 5-hole diamond drilling program comprising 2,000 meters within the target area.

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EHR remains very positive about the prospectivity of the La Victoria project and is hopeful that planned drilling programs can be undertaken as soon as permitting constraints are resolved.

Note: an independent specialist report on the Nanuk project produced by SRK Consulting (Australasia) Pty Ltd in January 2020 is available here.