New Gold Acquisition In Pinos District

 

TORONTO, ON - Xtierra Inc. reported that it has entered into an option agreement with private Mexican interests whereby it may acquire a 100% interest in the El Dorado gold project within 2,890 hectares of mining claims located in the Pinos district of southeastern Zacatecas State, Mexico. The property is located within the Central Mexican Mineral Belt and has an existing small-scale underground gold mining operation developed on one level of the El Dorado vein. It is located close to Xtierra's existing Orca 3 property and some 80 kilometres southeast of Xtierra's Bilbao silver-zinc-lead-copper development project.

The El Dorado property is located 7 kilometers northeast of the historic Pinos gold deposits where veins with reported bonanza grades of more than 200g/t gold were mined historically on northwest striking veins making the Pinos district the largest gold producer in the State of Zacatecas during the Colonial Period. Historic records suggest the average mined grade was 97 g/t silver and 58.26 g/t gold.

Gold mineralization at El Dorado occurs as veins and in quartz stockworks related to late stage extensional faulting developed within an intrusive quartz-eye rhyolite. The El Dorado vein trends north-northwest and dips steeply to the west. It comprises one main and several parallel veins of quartz-hematite. Mineralization noted within the single level adit driven 134 metres on the vein is native gold within a matrix of hematite. Lower grade gold mineralization has been found in altered wall rocks. The current mining operation on the El Dorado vein structure produces only small tonnages each day by selectively hand mining higher grade vein material which is directly shipped to the Penoles smelter, 400 km to the north, at Torreon.

Work recently completed by Xtierra during preliminary due diligence has resulted in the discovery of an extensive gold-bearing stockwork encompassing the El Dorado vein and several other parallel structures. Soil and rock geochemistry have demonstrated that this stockwork, formed at the edge of a linear gold soil anomaly over 1km in strike length, is open-ended to the north-east and trends directly into a second, newly identified stockwork body, located over 300 metres away from the El Dorado vein.

Preliminary work completed by Xtierra confirms the high grade nature of the El Dorado vein with channel sampling returning values ranging from 0.5 to 57.0 g/t gold over widths of 0.10 to 1.0 metre with individual grab samples as high as 1,760 g/t gold and 3,590 g/t silver. Such grades indicate the potential for bonanza deposition zone development within an epithermal boiling zone. The El Dorado vein and surrounding stockworks do not appear to have been tested by drilling.

The company’s address is 220 Bay Street, Suite 700 Toronto, Ontario, M5J 2W4, (416) 362-8243, fax: (416) 368-5344, email: [email protected].