The Buena Vista Hills Cobalt – IOCG project (“Project”) is situated approximately 35 km SE of Lovelock, Pershing County, Nevada, with excellent road access. The Project is centered around the past producing Segerstrom-Heizer iron ore open pit mine (“SH Mine”) that produced more than 1.2 million tons of iron ore between 1943 and 1966 (Nevada Bureau of Mines, Bulletin 89, Johnson, 1977). The SH Mine is approximately 200m x 180m and 45m deep with four additional smaller past operating open pits in the immediate vicinity. Historic open-pit reserves as reported by The Nevada Bureau of Mines, Bulletin 89 (1977) were estimated at 35 million tons with an average grade of 30% iron†.
The Project is primarily comprised of a full private section of land (Section 15, Township 25N, Range 34E covering 2.6 km2) complemented by an adjacent block of 12 claims on US Bureau of Land Management (“BLM”) land to the north, covering an additional 0.8 km2.
The massive magnetite is localized within the northeast-striking, northwest-dipping Segerstrom-Heizer fault zone (“SH Fault”) and is coincident with a series of northwest-trending cross faults.
Subsequent to the emplacement of the magnetite, an intense ‘Cobaltoan’ pyrite-marcasite sulfide mineralizing event occurred (i.e. Cobaltoan pyrite is simply a name given for pyrite containing an appreciable content of cobalt). The Cobaltoan forming fluids were introduced along the local structures, favorably constrained by the massive magnetite unit, with Cobaltoan iron-sulfide deposition focused along the hanging wall and foot wall margins of the massive magnetite body.
A significant amount of Cobaltoan iron-sulfide mineralization is exposed in the open pit walls and within the waste dumps, presenting two distinct prime exploration target styles:
- The Cobaltoan mineralization appears to be strongly oxidized to about 50-60m below surface and represents a shallow, thick and well developed hanging wall open pit target; and
- A high-grade Cobaltoan massive pyrite-marcasite sulfide target is indicated below the oxidized cap.
‘At Surface’ Significant Cobalt Oxide Target
The potential of the ‘at surface’ oxidized zone was revealed in a reverse circulation (“RC”) drill hole completed by the property owner, Zephyr Minerals Inc., a Nevada Corporation, in 2008 (“Zephyr Hole”). The Zephyr Hole was located approximately 100 m northeast of the main exposed mineralized zone at the NE pit wall and drilled vertically with fixed 3.05 m (10 foot) sample intervals. The cobalt mineralization was intersected under the mine waste at a 6.1 m (20 foot) depth and graded 0.09% CoO over 27.4m (90 feet). This interval included 12.2m (40 feet) grading 0.12% CoO from 12.2-24.4m (40-80 feet).
New Tech recently collected grab samples from several small development pits occurring along the NE extension of the SH fault zone. Four samples were collected up to 305 m (1000 feet) NE of the SH pit grading 284, 465, 825 and 921 ppm Co and one grab sample collected from a development pit located approximately 457 m (1500 feet) NE of the SH pit contained 837 ppm Cobalt.
Of note, the significant cobalt mineralization reported in the Zephyr Hole combined with the cobalt mineralization observed in grab samples quite distant from the Zephyr Hole indicates the potential for a large at surface cobalt mineralized target area along the extent of the magnetite body and SH Fault.
Near Surface Cobaltoan Iron Sulfide Target
In 2018, New Tech collected two semi-massive magnetite grab samples exhibiting significant pyrite replacement (~30% to 50% pyrite content) from the open pit waste dump that graded 0.15 and 0.48% Cobalt*.
Independent from New Tech, three massive Cobaltoan pyrite samples were collected from the dump that returned grades of 0.45, 0.82 and 1.20% cobalt* (T.A. DeMatties, unpublished preprint data).
The semi-massive to massive pyrite samples collected from the dump material reveal a high cobalt tenor and emphasises the potential for a sizable near surface cobalt iron sulfide mineralized zone below the oxidized cap.
Except for the Zephyr Hole, all historic holes at Segerstrom-Heizer did not analyze for cobalt.
(† Note): Although this historic mineral reserves estimate is believed to be relevant and indicates exploration potential at this site, details of the historical estimate (i.e. the key assumptions, parameters, and methods used to prepare the historical estimate) are unknown and/or have not been reviewed and/or the original assay results have not been verified by a Qualified Person. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves. Of particular note, the Zephyr Option covers the right to all elements excluding Iron, therefore pursuant to the Zephyr Option, the Company does not have the right to the historical iron reserves at the Project.
(*Note): The grab samples reported in this release are solely designed to show the presence or absence of mineralization and to characterize the mineralization. Grab samples are by definition selective and not intended to provide nor should be construed as a representative indication of grade or mineralization at the Project.
Technical Information in this news release has been reviewed by R. Kemp, P Geo., a Qualified Person as that term is defined in NI 43-101.
Buena Vista Hills Option Terms
The Company has entered into a Letter of Intent (“LOI”) with New Tech Minerals Corp. for the 100% acquisition of the Buena Vista Hills project. To complete the acquisition, Explorex will be required to disburse a total $10,000 cash payment and issue a cumulative 400,000 shares in Explorex to New Tech pursuant to the execution of a definitive agreement and New Tech satisfying certain obligations. The Company will assume New Tech’s underlying commitments pursuant to the Mining Lease and Option to Purchase Agreement made between New Tech and Zephyr Minerals Inc., a Nevada corporation (“Zephyr”) dated May 15, 2018 (“Zephyr Option”).
Work Expenditure: The Company shall expend USD 700,000 in Exploration Expenditures as follows:
Of particular note, New Tech will maintain the underlying cash payments and share issuances to Zephyr. In compensation, Explorex is required to mirror the Zephyr Option by making commensurate cash payments and issuing an equivalent value of Explorex shares to New Tech.
The following is the outstanding schedule of cash payments and share issuances pursuant to the Zephyr Option:
(Note 1): The Company will compensate New Tech with an equivalent value of Explorex shares, relative to the value of the New Tech Shares issued to Zephyr with both parties’ share issuance value calculated based on a 10 trading day VWAP.
On the third anniversary, an annual advance production royalty payment of USD 58,000 will be introduced. The advance royalty payment is set off against a royalty equal to one per cent (1%) of net smelter returns from production on the private land and four per cent (4%) of net smelter returns from production on the mineral claims on BLM land.
The Zephyr Option grants the right to purchase one-half of the total combined royalty, (i.e. 0.5% of the 1% royalty and 2% of the 4% royalty) for a purchase price of USD 500,000.
Provided to New Tech in the LOI is the offer for a one-time 20% Clawback, triggered at the completion of a feasibility study and in exchange for two times (2x) the pro rata exploration expenditures.
The Zephyr Option and by extension the LOI cover the right to all elements excluding Iron, which remains under the purview of Zephyr.