Argentina Projects

Presentation

Focus on high grade precious metals projects in Argentina

Santa Cruz Properties - Overview

On February 20, 2018, New Dimension announced that it had entered into a series of property acquisition agreements to acquire a 100% interest in the Las Calandrias, Los Cisnes, and Sierra Blanca gold-silver projects located in Santa Cruz Province, Argentina (together, the “Santa Cruz Properties”) from Sandstorm Gold Limited (TSX: SSL, NYSE: SAND)(“Sandstorm”).  The portfolio, totaling 86,000 hectares / 860 square km, was previously controlled by Mariana Resources Limited (“Mariana”), which was acquired by Sandstorm in July, 2017. All projects are located in the highly-prospective Deseado Massif geological terrane in mining-friendly Santa Cruz Province, southern Argentina. The acquisition of the Santa Cruz Properties was completed on May 15, 2018.

As part of the Santa Cruz Properties transaction, New Dimension also acquired ownership of 23,400 hectares / 234 square km of surface rights over the main Las Calandrias targets (the “Estancia Las Calandrias”).

The Deseado Massif is one of the world’s key destinations for high-grade epithermal gold-silver deposits, with important mining operations including AngloGold Ashanti’s Cerro Vanguardia mine (first commercial production in 1998), Goldcorp’s Cerro Negro mine, Yamana Gold’s Cerro Moro mine (first commercial production in April, 2018), and Minera Don Nicolas (mine commissioned in December, 2017). Each of the Company’s Santa Cruz Properties is well located with respect to key infrastructure (especially power and good road access), are close to existing mines, and may be explored all year round.

Location of the Las Calandrias, Los Cisnes, and Sierra Blanca Projects in the Santa Cruz Province.

In early June 2018, a 41 hole / 5,259m “Phase I” Diamond Drill Program was initiated on the Los Cisnes and Las Calandrias Projects. Assays from the 16 holes / 1,564m of drilling completed at Los Cisnes were released on July 26, 2018, and confirmed both down-dip and along-strike extensions to the high-grade silver mineralization reported by Mariana on the Brio structure from a 2015 scout drill program. Assays from the 25 holes / 3,695m of drilling completed at Las Calandrias were released on September 13, 2018, and included intersections of high-grade vein/breccia hosted gold mineralization at Calandria Norte located outside of the northern limit of the existing mineral resource. In addition, drilling completed to date indicates a significant new gold-silver zone developing in the sub-parallel Morena structure. Initial drilling at Morena has focused on the southern end of the structure, with at least 300m of northern strike extent interpreted to remain for future drill testing.

The 2018 Santa Cruz diamond drill program led to the release of an updated Mineral Resource Update (“MRE”) for the Las Calandrias Project on October 5, 2018. The updated MRE was prepared by independent mining consultants AGP Mining Consultants Inc (“AGP Mining”) in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The October, 2018 MRE included contributions from both the Calandria Sur and Calandria Norte deposits (with additional work still being undertaken on the Morena vein), and confirmed the robust nature of the Las Calandrias gold-silver resource and increased Indicated Category gold resources contained within constraining pit shells by 22% or 69,000 ounces.

October 2018 Las Calandrias Mineral Resource Estimate

Indicated Resource: 391,000 Ounces Gold + 6,070,000 Ounces Silver
Inferred Resource: 42,100 Ounces Gold + 401,500 Ounces Silver

Details on the methodology used in the October 2018 MRE are outlined below.

Field activities in Santa Cruz currently remain focused on the discovery of new high-grade gold-silver resources, with field crews working on the evaluation and prioritization of drill targets at the Sierra Blanca project. In addition, further field work is scheduled be undertaken on high-grade gold-silver targets in the Las Calandrias and Los Cisnes districts over the southern summer field season (2018/2019). Follow-up drill testing is currently planned for 2019.

Prior to New Dimensions’s acquisition of the Santa Cruz Properties, approximately $C25 million had previously been spent by Mariana exploring the portfolio.

Las Calandrias Project - Overview

Prior to New Dimension’s acquisition of the Las Calandrias Project, previous work had been focused on evaluating the gold-silver resource potential of the Calandria Sur deposit, a bulk tonnage rhyolite dome-hosted deposit located in the southern portion of the Calandria I mining claim. However, high-grade gold-silver mineralization had also been identified by Mariana in the Calandria Norte, Morena, and Despreciada/Nido vein systems, all of which are located immediately adjacent to the Calandria Sur deposit. Significant drill intercepts reported by Mariana from the Calandria Norte vein/breccia system included:

  • CND45  4.0 m @ 75.9 g/t Au and 70.0 g/t Ag from 92.5m downhole          
  • CND46  4.5 m @ 101.8 g/t Au + 72.0 g/t Ag from 81.5m downhole
Main target areas at the Las Calandrias Project
Calandria Norte Longitudinal Section
Panoramic view towards the Calandria Norte vein from Morena. View to East.

Drilling completed to date indicates a significant new gold-silver zone developing in the Morena vein/breccia system. Initial drilling has focused on the southern end of the Morena structure (with the best mineralized intercept being 0.6m @ 68.1 g/t Au + 107 g/t Ag from 59m downhole in CND250), with at least 300m of northern strike extent interpreted to remain for drill testing. Drilling completed also suggests a more northerly strike to the Morena system than previously expected.  

Additional targets at Las Calandrias include the Despreciada/Nido vein system, which is defined by classic epithermal vein textures on surface yet has only seen very wide spaced previous drilling, and the Pichones coincident geochemical / geophysical anomaly (to date undrilled). However, drill testing of these targets is expected to take place in a future drill program.

Las Calandrias Mineral Resource Estimate (“MRE”)

The October 2018 Las Calandrias MRE, as reported by AGP Mining by sector:

Calandria Sur Deposit – Mineral Resources within constraining Shell

Calandria Norte Deposit – Mineral Resources within constraining Shell

Calandria Norte Deposit - Mineral Resources below constraining shell

Notes to Accompany Calandria Sur MRE:
Summation errors may occur due to rounding;
Mineral Resources are reported within an optimized constraining shell;
Block matrix is 6m x 6m x 5m (length x width x height);
Grades are estimated by ID3 interpolation;
Density was interpolated by ID2.  Blocks not populated by ID2 were assigned the mean density 2.21;
Cut-off grade for MRE varies by oxide zone (0.3 g/t Au oxide; 0.4 g/t Au transition; and 0.8 g/t Au primary zones);
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
Constraining pit parameters: (in $US)

Metal Price: $1,400/oz Au; $18.50/oz Ag (based on 3 year rolling average seller’s prices)
Metal Recoveries: Au (94%-oxide; 73% transition; 80% primary), Ag (88%-oxide; 78% transition; 80% primary)
Mining Cost: $2.50/t
Processing plus General and Administration: $11-oxide; $11-transition; $25-primary
Pit Slope: 45°

Notes to Accompany Calandria Norte MRE:
Summation errors may occur due to rounding;
Mineral Resources are reported within, and below, an optimized constraining shell;
Block matrix is 5m x 3m x 5m (length x width x height);
Grades are estimated by ID3 interpolation;
Density was assigned the mean density 2.41;
Cut-off grade used for reporting MRE within constraining shell is 0.8 g/t Au;
Cut-off grade used for reporting MRE below constraining shell is 1.5 g/t Au 
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Constraining pit parameters: (in $US)

Metal Price: $1,400/oz Au; $18.50/oz Ag (based on 3 year rolling average seller’s prices)
Metal Recoveries:   Au (80%), Ag (84%)
Mining Cost: $2.50/t
Processing plus General and Administration: $25
Pit Slope: 45°

The previous MRE for the Las Calandrias project was reported on an unconstrained basis. On a like-for-like basis (all mineral resources contained within constraining shell), increases in both average gold grade and total contained gold ounces are reported for Calandria Sur (+10% increase in Au grade and +21% increase in contained gold ounces in Indicated Category). At Calandria Norte, the 2018 MRE reports an increase of +13,000 oz in contained ounces (+27%) in Indicated Category.

Mineral resources at the Calandria Sur deposit are bounded to the south by the Calandria I claim block boundary.

Calandria Sur Deposit – Resource Comparison

Note:
Previous MRE and 2018 MRE are reported at the same Au cut-off grades and within the 2018 constraining shell
Previous MRE reported using 2011 Oxide Zones; 2018 MRE reported using updated 2018 Oxide Zones

Calandria Norte Deposit – Resource Comparison

Note:
Previous MRE and 2018 MRE are reported at the same Au cut-off grades and within the 2018 constraining shell

The updated MRE was completed by Paul Daigle, P.Geo and Associate Senior Geologist of AGP Mining, an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).  Further details of the estimation methods and procedures may be found in both the Company’s October 5, 2018 news releases and the NI 43-101 technical report which was subsequently filed on SEDAR (www.sedar.com) on November 8, 2018. The reader is cautioned that Mineral Resources which are not Mineral Reserves have not yet demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

Program Details - Los Cisnes Project

At the Los Cisnes Project, high grade silver(-gold) values were identified from previous work (channel sampling and scout diamond drilling) on the Brio vein/breccia system. Brio is a quartz-sulfide vein/breccia system which strikes ENE, can be traced on surface for approximately 2.3km, and is up to 3m wide (Figure 5). Channel samples taken at Brio by Mariana Resources Ltd2 had returned assay values ranging from BDL to 0.8m @ 3,840 g/t Ag + 3.0 g/t Au. During 2015, 8 scout drill holes for 723m were completed along the Brio structure, with the best intercept being 2.9m @ 755 g/t Ag from 32.1m downhole in LCsD-09.

Highlights from the 2018 drill program at Los Cisnes include:

  • A total of 16 diamond drill holes for 1,564m were completed at Los Cisnes, which is located 75km southwest of Yamana Gold Inc’s high-grade Cerro Moro gold-silver mine
  • Assays confirm both down-dip and along-strike extensions to the high-grade silver mineralization reported by Mariana
  • Two step-back holes ( LCsD-14 and LCsD-18) were drilled to Mariana’s scout drill hole LCsD-09, with its reported intercept of 2.9m @ 755 g/t Ag from 32.1m downhole (including 0.9m @ 1,400 g/t Ag 2) (Figures 2 & 3). Both New Dimension drill holes successfully intersected down-dip extensions to the high-grade silver mineralization in LCsD-09:
    • >LCsD-14: 4.4m @ 566 g/t Ag from 100.3m downhole (60m step-back) Including 1m @ 740 g/t Ag from 102.0 m downhole and 0.8m @ 1,653 g/t Ag from 103m downhole 
    • LCsD-18: 4.4m @ 123 g/t Ag from 47.6m downhole (15m step-back)       Including 0.8m @ 276 g/t Ag from 49.2m downhole
  • Two step-out holes to LCsD-09 ( LCsD-20 and LCsD-15), designed to test for lateral extensions to the previously reported interval of 2.9m @ 755 g/t Ag1, also returned high-grade silver intercepts:
    • LCsD-20: 2.0m @ 381 g/t Ag from 39.0m downhole
      (39m West) Including 0.8m @ 528 g/t Ag from 39.0 m downhole  
    • LCsD-15: (33m E) 1.8m @ 182 g/t Ag from 59.7m downhole
2018 drilling on the Brio vein/breccia structure, Los Cisnes Project
Cross section through LCsD-09 area, Brio vein/breccia structure

1 Gold equivalent grades are calculated by dividing silver grades by 60, adding this value to the gold grade, and with no differences in metallurgical recovery for gold and silver.

2 Historical results have not been independently verified by the Company. A potential investor should not place undue reliance on these historical results when making an investment decision, nor should they be used as the sole criterion for making investment decisions. These is no assurance that the Company can reproduce such results , or that the historical results described herein will be realized.

Sierra Blanca and Regional Prospects

Drill target generation activities at the Sierra Blanca Project will continue in parallel with the current drill program at Las Calandrias and Los Cisnes. However, the drill testing of high grade targets at Sierra Blanca is not expected to occur before Q4, 2018, at the earliest. Reconnaissance activities on the Company’s Regional Prospects are also anticipated to restart after the termination of the Patagonian winter. 

Acquisition Agreements

New Dimension has acquired the 100% interest in the Santa Cruz Projects from Sandstorm for the following consideration:

  • A $400,000 amount payable to Sandstorm in cash or shares at New Dimension's election on each anniversary of the acquisition, until December 31, 2032 or earlier if certain events occur, including commencement of commercial production;
  • a 2% net smelter returns royalty (“NSR”) on each of the Santa Cruz Properties.

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