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Santa Maria del Oro

Overview

High-level epithermal system with 2 target zones including a major outcropping jasperoid with elevated precious and base metals, and a geophysical lineament. Potential for a productive epithermal Zone at depth.

The Santa Maria del Oro project consists of a number of high-level epithermal targets in close proximity to the historic Magistral del Oro mines in Durango state. Staked by Prospero between late 2011 and early 2012, the resulting 9,066 hectare land package almost completely surrounds the historic mines. Prospero has obtained historic mining records that indicate production of over 1 million ounces of gold from oxide ores with an average grade exceeding 15 g/t Au.

There are 2 target zones at the Santa Maria del Oro project defined by location and geology: the Matorral Zone, and the Western Magistral Lineament Zone (Figure 1). Prospero has started planning for an initial drill campaign to test Matorral in 2017.

In April 2017, we secured a C$1.5-million strategic investment from Fortuna Silver Mines Inc -- a growth oriented min-tier silver and gold producer- to fund first-pass, proof of concept drilling on 3 of our key targets, including Santa Maria del Oro.

In June and July 2017, Prospero and Fortuna completed 3 diamond drill holes (1,371m) at Matorral. Although no significant precious metal intercepts were cut by the drilling, holes 17-01 and 17-02 intersected a high level epithermal alteration mineral assemblage indicative of a possible mineralized zone at depth.

Property Description

Prospero has staked a significant land position surrounding the Santa Maria del Oro mining camp. Field work, consisting of mapping, geophysics, prospecting, grab and chip sampling and follow-up fluid inclusion analysis has identified 2 distinct targets: Matorral, and the Western Magistral Lineament.

Matorral

The structural and hydrothermal setting of Matorral is typical of a high-level epithermal environment. Prospero's sampling has returned elevated precious and base metal geochemistry that are characteristic of the upper portions of a potentially large, productive ore zone at depth. It's particularly encouraging that the elevated geochemistry at Matorral is significantly higher than the geochemical responses noted in the high-level epithermal environments above known high-grade epithermal ore bodies such as Fresnillo and Guanajuato.

Three distinct structural regimes have been mapped in the Matorral system (Figure 2) with a total prospective length of over 7km.

Matorral East. At 2.5km long, Matorral east is the largest zone. It is structurally controlled and strikes between N20°W to N40°W.
Matorral West is a 2km long structural zone along the western border and within a set of felsite dikes which strike N-S to N60°W and dip SW.
Matorral North is 1.3km in length and strikes N20°W to N55°W dipping to the southwest

Prospero has carried out systematic multi-element geochemical sampling of jasperoids and banded veins across Matorral. The sampling returned precious metals grades from trace up to 178 g/t Ag and 0.42 g/t Au in the northern Matorral Pit Zone (Figure 3). Anomalous base metals --up to 0.46% Zn, 0.12% Pb, 0.11% Mo- we returned from the Matorral North and Matorral East Zones (Figure 4).

Elevated levels of mercury, antimony and arsenic -which are the typical epithermal pathfinder elements- were noted (up to 100s of ppm) from the Matorral West and East Zones (Figure 5). In fact, there are several small pits along the western margins of the Matorral West Zone which appear to have been for mining mercury (Figure 5). Lead, iron, zinc, mercury and barium are particularly high in the northernmost jasperoid in Matorral North (Figures 4 & 5).

Alteration at Matorral consists mainly of low temperature jasperoid development, either as massive brecciated bodies or in veins and stockworks. Fluid inclusion petrography on the scarse crystalline quartz indicates low temperatures of formation (200°C).

The Company has identified six attractive targets both from structural and geochemical standpoints that warrant drilling. The most attractive target is the North Matorral Pit area, where outcropping open-space filling veins with elevated precious metal values could indicate closer proximity to the top of a mineralized system.

The Western Magistral Lineament Zone

The Western Lineament zone is southwest of the historic Magistral del Oro mines (Figure 1). An aeromag' survey identified this lineament under relatively thin gravel cover running parallel and adjacent to the historic mine. In early 2012, an extensive ground magnetic survey was completed which identified two target types and reinforced the key similarities between the Lineament zone and the historic Magistral del Oro mines.

The lineament is 12km long and sits 2-3km west of the old mines. It strikes northwest and appears to dip to the east, similar to the veins in the historic mines, and appears to start about 50-100m below the surface. Prospero proposes drilling the lineament from east to west to investigate the structure at depth for vein-hosted mineralization. The magnetic model of the Lineament indicates the presence of a magnetic body dipping shallowly to the east along 5km of the northwestern portion of the lineament. (Figure 6). This is similar to the dip suggested by mining records from the historic Magistral del Oro mines: one of the largest mineralized bodies coincided with the shallowest dipping portion of the vein (55° to the east).

Regional Geology

The large epithermal districts in the Mexican Altiplano metallogenic province, for example Fresnillo, Zacatecas, and Guanajuato, are Oligocene in age, and are typically associated with basement highs. The ore zones are hosted at depth within the basement rocks, whereas the paleosurfaces were located in the overlying coeval Oligocene volcanics.

Age dating by Prospero indicates that hydrothermal activity at Santa Maria del Oro occurred during a hiatus in volcanism within an overlying Oligocene volcanic pile: Pre-hydrothermal andesites and rhyolites are overlain by post-hydrothermal ignimbrites.

The known historic veins of the district and the Matorral high-level hydrothermal system are both hosted in a Jurassic age volcano-sedimentary sequence consisting of phyllites, limestones, andesitic tuffs and flows, and lesser rhyolitic units, all of which are intruded by Jurassic granites and a felsitic dike and dome complex.

Satellite images show two possible nested calderas of Oligocene age. The inner caldera's western margin is associated with the Matorral system, and the outer caldera's western margin coincides with the historic veins and the Magistral lineament (Figure 1).

Back-arc basin and range-type normal faulting was active pre-hydrothermalism and was responsible for initial uplift of basement rocks, and also provided the deeper plumbing for the subsequent emplacement of large epithermal deposits. The association of the Santa Maria del Oro district with a large structural basement high, and the extensive evidence of hydrothermal activity within an area of 20 x 10km are evidence for the possible presence of another major epithermal district within the Altiplano metallogenic province.

2017 Drilling with Fortuna

Three holes were completed on different 3 sections lines to test for potential epithermal precious metal mineralization beneath extensive surface outcrops of jasperoid. In each case, the initial holes were drilled to pin the dip of the controlling structures of the jasperoids between 200-300m below the surface outcrop. A drill collar map is shown below:

No significant precious metal assay results were returned in the drilling with the exception of hole 17-01 which returned sporadic anomalous silver values from trace up to 32ppm Ag. However fluid inclusion and clay mineralogy analyses of veinlets and alteration cut in the 3 holes suggests that the hydrothermal alteration seen in the holes is still above the top of the potential productive epithermal horizon; additional deeper drilling is required to reach the boiling zone in the system.

The presence of late barren calcite in hole 1 is believed to be analogous to similar calcite veins seen in the high level epithermal environments above other Mexican epithermal deposits such as Fresnillo and Pachuca. The calcite is interpreted to be related to the descent of steam-heated carbonate rich waters as the hydrothermal system begins to collapse.

Hole PMA-17-01 (End of hole at 475m)

Drilled to cut the downward extension of structurally controlled jasperoids and quartz veining in the North Matorral Pit, which carried multi-ounce silver grades at surface. Quartz-feldspar porphyry (QFP) was cut between 125.20 to 171.85 m with free quartz veining with coarse pyrite in the hangingwall of the down dip continuation of the QFP mapped at surface and associated with quartz in the pit. From 170.00 to 171.85 m the quartz vein runs 0.07 ppm Au and 21 ppm Ag. The clay minerals identified in the hole (illite/montmorillonite) are compatible with a high-level epithermal environment. The presence of banded coarse crystalline quartz and coarse euhedral pyrite in the hole, combined with fluid inclusion temperatures as high as 229°C, and some anomalous geochemistry (up to 32 ppm Ag) indicate this zone could lie relatively close to the top of an epithermal ore zone.

Hole PMA-17-02 (End of hole at 454m)

Hole 17-02 cut 2 several zones of alteration and anomalous geochemistry. Between 91m to 133m downhole, 17-02 intersected brecciated limestone with bands of massive pyrite. The lower portion of this zone, from 118m to 133m consisted of intercalated carbon-rich /carbonaceous bands and massive pyrite. The 27m zone is anomalous in Zn, Pb and As with a best intersection of 0.12% Zn over 6.7m. The presumed downward continuation of the jasperoids seen at surface on section B-B was cut between 240m to 295m. The hole cut several zones of jasperoids with anomalous silver (from trace to 5.7ppm Ag) roughly 200-250m below the surface outcrops. The hole was terminated at 454m in fresh andesites. Clay mineral analysis from the pyrite-rich zone described above show that Mg-Illite, K-illite, and montmorillonite-nontronite are the principal hypogene clay minerals, suggesting hydrothermal temperatures in the system were lower than 220°C. Rare crystalline quartz was found in the deeper parts of the hole which returned homogenization temperatures of 173°C to 185°C.

Hole PMA-17-03 (End of hole 442m)

Hole 17-03 cut intermediate volcanics along its entire length. A zone of silicification and jasperoids from 311.7m to 314.5m down hole may correspond to the downward projection of the surface jasperoids. No significant assays were received from hole 17-03.

Future Work

Planning is underway for a 4th hole to be drilled under PMA-17-01 to intersect the QFP at least 200 vertical meters below where it was cut in hole 1. Drilling of the hole was postponed however to allow for drilling to begin at the El Petate project.

DDH PMA 17-01 drill section	DDH PMA 17-02 drill section	DDH PMA 17-03 drill section
Figure 1	Figure 2	Figure 3
Figure 4	Figure 5	Figure 6

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This page was created on Wed Jan 22, 2020 at 8:57:23 AM Pacific Time.