January 27, 2021

New developments in science and technology lead to new discoveries in mining

Epithermal deposits provide opportunities for new high-grade gold and silver discoveries.  These deposits, when well preserved, typically have surface exposures with little to no detectable gold.  Historic explorers and miners, focused on high gold concentrations at the surface, typically walked over and ignored these systems.  New developments in ore deposit models, paired with new technological developments in infrared spectrometry and remote sensing, have allowed us to model these systems in new ways that were not possible in the past.  This increases our odds of finding high grade mineralization below low grade or barren surface exposures which would have been missed by past explorers.

Remote imaging has been used in exploration for a long time. At its most basic level, geologists and prospectors would simply point their cameras out of aircrafts (first balloons, then airplanes, now drones) to take pictures of the ground below, gathering information on topography and soil that might reveal clues about the location of minerals. Today, remote sensing has become one of the most important methods to acquire information quickly and directly about the Earth’s surface.

It wasn’t until the post-World War II, that new sensing modalities came into play as technologies developed during the war were then applied to commercial applications that would become hallmarks of modern aerial-based mineral exploration. Infrared cameras could penetrate inclement weather conditions better than conventional photography and more easily identify the mineral content of soil. Magnetometers could sense the disturbances in the Earth’s magnetic field to pinpoint metallic ore deposits deep underground. Gravimeters function by measuring the pull of Earth’s gravity which varies slightly based on the position of various underground mineral deposits. Airborne gamma ray spectrometry was developed during the 1960s, where the deepening Cold War ensured there was plenty of demand for radioactive minerals like uranium. Radar carries many of the same advantages that infrared film does, but can see through limited vegetation, revealing the geological features underneath, day or night, including surface texture and moisture content. Today hyperspectral imaging can identify subtle variations in mineralogy that the naked eye can not see.  This allows geologists to map out large mineral systems and fluid flow pathways that help vector them in to buried ore deposits.

The Ermitaño project that Orogen sold to First Majestic Silver, is a high-grade low sulfidation gold-silver deposit. At the surface this vein has very low concentrations of gold with early sampling only returning 70 parts per billion (0.070 grams per tonne, “g/t”) gold.  However vein textures and clay mineralogy helped the exploration team identify it as a potential location for gold mineralization at depth.

The current indicated resource is 2,107,000 tonnes averaging 4.59 grams per tonne (“g/t”) gold and 70 g/t silver for 311,000 ounces of contained gold and 4.73 million ounces of contained silver 4,5. The inferred resource is 3,733,000 tonnes averaging 3.08 g/t gold and 58 g/t silver for 370,000 ounces of contained gold and6.98 million ounces of contained silver

As the project is located a mere four kilometres away from First Majestic’s Santa Elena mine, this means they can use their existing mill, cutting high transport costs. Production from Ermitaño is slated to begin in2021 and will displace approximately 40% of the feed that currently supplies the mill in the first couple years.

The Silicon project that Orogen sold to Anglo Gold Ashanti, is another high-grade low sulfidation gold-silver deposit.  At the surface this system had no elevated gold concentrations.  Clay mineralogy studies paired with advances in mineral systems science and detailed geologic mapping helped the exploration team identify the location of potential high grade ore shells at depth.

Orogen continues to use this combination of cutting-edge technology and a mineral systems approach to identify and acquire similar land positions.  These projects provide discovery opportunities for Orogen and our Partners which provide value creation events for all parties involved.