Gold, Silver and Mineral Exploration
Focused on exploration and advancement of mineral projects primarily in Mexico and Peru
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MacMillan Gold Corp. > Message
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trip report: visit to the Realito Property in Jalisco

Posted by: coach247 on May 12, 2008 02:10AM

I flew to Jalisco last week to tour the Realito Property where MMG is currently completing a drill program. The project is located just over an hour from the city of Guadalajara, and it is easily accessable by a major paved highway to the nearby city of Ameca, and then a paved sideroad that runs right through the property.

Two main target areas were to be tested during this program. The first batch were drilled in the vicinity of a historic mine working just a hundred meters or so from the road. We walked in on the trail that had been hacked into the shallow hills to create access for the drill rig, and there were a couple of adits driven into a hillside. The mineralized vein outcropped at the top of the hill, and the drill fence was set up to intersect the vein system about 100m below, and then another set of holes were punched to about 150m below. The drill fence spacing was around 50-60m which is very tight for a first pass and the results should be suitable as a dataset to provide an indicated resource.

The first assays from this program were reported in February:
http://www.macmillangold.com/n.....-...

What is not obvious from that report is that the vein intercepts are actually fairly shallow. Because the property is characterized by rolling hills, in order to locate the drill rig with the best angle to intercept the vein the company decided to step the drill pads back about 75m from the structure. The low-angle drill holes then hit the vein almost perpendicular, since the veins plunge almost straight down.

So hole R3, which reported 6.1m of 323g silver starting from 142m along the core length, was actually an intercept that was probably less than 100m down from surface. The target vein was hit with all four drill holes reported so far, and in three of them multiple veins were intersected, some at very shallow depths. The vein width is significant here, ranging up to about 20m estimated true width, which is very good.

A second fence of drilling targeted further to depth and assays are still pending. But there is already a nice chunk of mineralization that has been outlined, mostly lower grade material but still potentially economic, with a few higher grade zones that have impressive numbers.

So if the company hits similar material to depth, then a nice tonnage of resources will be outlined, and a follow-up round can then step out the drilling further to depth.

The combination of bulk tonnage potential, shallow depth, and excellent infrastructure nearby, will all contribute positive circumstances for development if enough mineralization can be outlined.

The second drill target was another hill structure, about 1.5km to the west. Again, we hiked up the hill to see a crude pit left from previous mining, and further down an adit driven into the hillside. This mineralization was sampled and lower grade gold values were encountered in brecciated rock.

There has not been enough work done to determine if the second target is part of the same system, or if it is a distinct and separate potential deposit area. Because MMG had access to the drill and they have the money in the bank, it was decided to act quickly and do a shallow drill program while they were waiting for permitting to test another target. This is a good decision as far as I am concerned, since the more information the company can get in the first pass, the better they will understand the system and be able to follow up later. Delays in assaying and the difficulty in securing a drill could have created months of waiting for another round to commence, so its a good risk to go ahead and do some low angle drilling now while they have the chance, and the put all the info into a follow up round later.

The rainy season does not start for more than a month, and the hills are covered with dense brown shrubs and trees. It is difficult to do fieldwork, but it will get even more difficult after the rains. Some area sampling has turned up a few very attractive targets nearby and perhaps a geophiz program will help to outline new targets as well. For sure there is strong potential for this property to develop into a big system.

The appealing scenario is that the isolated outcrops identified so far will be connected as part of a major trend several kilometers in length, with parallel vein structures. The company is also hopefull that the outcrops represent just the higher elevations of the vein system and that a higher grade zone may be uncovered further to depth. Some high grade copper-gold samples have been discovered at an old ore dump within the property area, and there is no proof that they came from the project, but it is likely that the sample material was not transported far. If there is higher grade copper mineralization further to depth that would support the model that productive vein mineralization may occur for several hundred meters below the known outcrops.

MMG has already done work at La Mus and El Zafiro, and they plan to drill La Cucharas as soon as they can get permitting to do so, pending access during the rainy season. Now with strong results in hand from Realito, and more assays pending, investors should begin to appreciate the aggressive pace of exploration. There are not many juniors in Mexico that have drill programs ongoing at so many projects within the same year, plus there is also a JV with WTM on the go.

The company strategy is to complete enough exploration and drilling to determine the potential for these projects, and search for the kind of big deposit like Alamos Dorado that was sold to PAA. George Brown was part of the team with Corner Bay that scored that big find, and he still has connections with PAA management.

I met with the project geos and they are very optimistic about La Cucharas too. The company hopes to do more work at some of the other projects, and they are still active to try and close additional acquisitions.

Based on the share price action, the market is not valuing any of the recent success that has been reported, nor the high quality projects under management. MMG is still very well financed with around $4 million in the bank.

Voluntary disclosure: I own shares of the company, and MMG runs a paid advertisement on my website. My direct travel expenses were paid to visit the project but I do not receive any form of compensation for my time and commentary.

cheers!

mike
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