Genesis Minerals Limited

Projects - Chile

Updated February 2012

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Dinamarquesa

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Background

Genesis Minerals Limited entered into an agreement in August 2010 with a private Chilean company to acquire a 100% interest in the Dinamarquesa Project in northern Chile. Limited previous wide spaced drilling had delineated a number of high grade gold structures. The Project is located within the highly mineralised Inca de Oro gold-copper belt which forms part of the well-endowed Paleocene Porphyry belt of northern Chile.

The Project is located in the Atacama Desert in an area with excellent infrastructure about 850 km north of Santiago, 90 km north of the city of Copiapó and 75km east of the Pacific Ocean. The Project is 3km south west of the small town of Inca de Oro which is connected by a sealed highway between Copiapó in the south and Diego de Almagro in the north. The altitude ranges from 1,600 to 2,100m, with low relief. Exploration can be conducted all year round.

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Panoramic view of the Dinamarquesa Project looking to the southeast

District Exploration History

Gold-copper mineralisation in the Inca de Oro district has been known since the time of the Incas. In “modern times” it is estimated that over 500,000 ounces of gold have been mined from numerous high grade veins in the district. The grade of the veins ranged from 10 to 100g/t gold. The majority of production took place between 1930 and 1945.

Recent exploration activity in the district has mostly comprised evaluation of the potential of the porphyry systems in the area. Between 2005 and 2007 Codelco (Chilean State National Copper Corporation) defined an Indicated and Inferred sulphide Mineral Resource of 259 million tonnes grading 0.46% copper and 0.13g/t gold at the Inca de Oro Copper-Gold Project (Pan Aust ASX Release 1 March 2010). At the Carmen Project, located 4km south of the Company’s Dinamarquesa Project, resources of 41 million tonnes @ 0.6g/t gold and 0.4% copper have been delineated.

Pan Aust has recently revised the resources for the Inca de Oro Deposit, 4km east (769.7Mt @ 0.32% copper and 0.09g/t gold, Pan Aust ASX Release 8 June 2011) and the Carmen Deposit 5km south, within the Inca de Oro porphyry belt.

The initial drilling program completed by Genesis, along with a mapping program, defined an extensive high grade vein system over at least 500m of strike. The vein system is open along strike and at depth.

Highly encouraging results returned from the initial wide spaced testing of the vein system included:

Primary copper-gold-molybdenum mineralisation was also returned from the initial drilling program that targeted porphyry hosted mineralisation at the Project – the “Inca Porphyry”. These results together with recent geological mapping highlighted the significance of the porphyry copper system at Dinamarquesa. Drilling results received from the first program included:

Hole Northing Easting mRL Azi Dip Depth (m) From To Length (m) Cu % Au ppm Mo ppm
DG10-01 7,037,220 406,610 1728 0 -70 300 4.50 20 16 0.25 0.23 25
25 39 14 0.24 0.18 51
49 105 56 0.29 0.18 39
112 130 18 0.35 0.29 22
199 244 45 0.26 0.51 53
248 252 4 0.46 0.15 40
DG10-02 7,037,101 406,300 1722 0 -70 300 9 49 40 0.29 0.11 53
50 56 6 0.34 0.10 55
78 80 2 0.45 0.19 41
107 115 8 0.30 0.18 32
161 163 2 0.82 0.00 5
DG10-03 7,037,299 406,514 1718 0 -70 303 41 59 18 0.37 0.38 94
158 166 8 0.20 0.12 40
169 174 5 0.20 0.12 35
185 216 31 0.25 0.23 106
233 251 18 0.29 0.40 68
298 303 5 0.22 0.14 65
DG10-05 7,037,370 406,610 1726 0 -70 320 2.7 37 34.3 0.31 0.22 19
42 46 4 0.23 0.15 21
55 63 8 0.29 0.18 83
67 80 13 0.37 0.23 82
96 125 29 0.23 0.11 69
131 166 35 0.28 0.13 85
172 189 17 0.14 0.09 543
226 231 5 0.27 0.13 326
DG11-07 7,037,147 406,499 1733 0 -55 380 4 105 101 0.28 0.24 40
  • Final assay results from ½ NQ or HQ diamond core
  • Lower cut of 1g/t gold.
  • Analysis completed by ANALMIN laboratory in La Serena, Chile.
  • All samples were analysed for gold by fire assay, total copper (3 acid digest with AAS finish), molybdenum (4 acid digest with AAS finish)
  • Reference standards, duplicate and blank samples were routinely submitted and were within acceptable limits based on current data.
  • Drill hole collar position surveyed - PSAD56 Zone 19S by GPS and down hole survey by gyroscope by Comprobe

A second drilling program was completed at the Dinamarquesa Project during August 2011. The purposes of this program were to follow-up high grade intersections returned from previous first pass, wide-spaced drilling and to further test the porphyry copper-gold mineralisation at the project.

Highly encouraging results were returned from holes drilled to assess the porphyry hosted copper-gold-molybdenum mineralised system, with extensive zones of copper-gold +/- molybdenum mineralisation intersected. Results include:

Hole Northing Easting mRL Azi Dip Depth (m) From To Length (m) Cu % Au ppm Mo ppm
DG11-10 7,037,274 406,650 1730 337 -60 250 27 40 13 0.30 0.23
95 96 1 0.93 12.50
113 163 50 0.29 0.15
DG11-12 7,037,182 406,582 1727 334 -55 270.4 29 49 20 0.29 0.19 55
58 70 12 0.25 0.09 101
80 126 46 0.21 0.13 73
169 179 10 0.12 0.09 267
190 200 10 0.15 1.70 112
DG11-13 7,037,230 406,616 1730 335 -70 250.10 5.7 39 33.3 0.25 0.16 37
42 182.5 140.5 0.24 0.13 89
210 250.1 40.1 0.17 0.14 105
DG11-14 7,037,173 406,504 1732 334 -55 250 13.6 77 63.4 0.27 0.24
DG11-15 7,037,270 406,680 1730 335 -70 250 47 59 12 0.23 0.14 92
65 80 15 0.35 0.26 169
121.25 133 11.75 0.19 1.00 71
165 177 12 0.24 0.26 44
DG11-16 7,037,126 406,414 1740 335 -55 252.8 105.02 105.66 0.64 0.44 8.19
143.45 143.65 0.2 0.03 8.73
176 177 1 0.17 1.07
179.56 179.81 0.25 0.15 6.39
198 199 1 0.05 1.56
209 210.35 1.35 0.59 1.31
DG11-17 7,037,230 406,616 1730 334 -55 200 45 62 17.00 0.29 0.15 174
65 145 80.00 0.28 0.16 117
145.48 145.68 0.20 0.27 49.2 305
157.8 167 9.20 0.27 0.25 130
170.2 170.5 0.3 0.05 21.1 323
DG11-18 7,037,238 406,680 1730 335 -60 250 34 43 9 0.21 0.14 49
69 85 16 0.20 0.17 43
128 145 17 0.18 0.76 45
156.7 172 15.3 0.30 0.21 23
203 222 19 0.25 0.11 101
  • Final assay results from ½ HQ diamond core
  • Analysis completed by ALS laboratory in Coquimbo, Chile.
  • All samples were analysed for gold by fire assay, total copper (4acid digest with AAS finish), molybdenum (4 acid digest with AAS finish).
  • Reference standards, duplicate and blank samples were routinely submitted and were within acceptable limits based on current data.
  • Drill hole collar position surveyed - PSAD56 Zone 19S by GPS and down hole survey by gyroscope by Comprobe

Further high-grade, vein hosted gold mineralisation was also intersected in the drilling at the Dinamarquesa Project. Results included:

DG11-10
1.0m @ 12.5g/t gold
DG11-17
0.2m @ 49.2g/t gold
0.3m @ 21.1g/t gold
DG11-16
0.64m @ 8.2g/t gold
0.2m @ 8.7g/t gold

Wider zones of gold mineralisation were also intersected in drilling, including:

DG11-12
10.0m @ 1.7g/t gold
DG11-15
11.7m @ 1.0g/t gold

These results are very encouraging and further detailed drilling is required to define the continuity and extent of the vein mineralisation.

The recent drilling and interpretation has highlighted:

  1. That a previously unknown copper-gold-molybdenum mineralised quartz-feldspar porphyry intrusion has intruded the older tonalite porphyry and andesitic units
  2. That the high-grade gold veins are probably part of a low sulphidation epithermal system;
  3. The presence of a porphyry copper system, developed with the intrusion of a quartz feldspar porphyry with strong biotite alteration; and
  4. The presence of quartz-pyrite and quartz-pyrite-chalcopyrite stockworks along with the increased occurrence of A, B and D type veinlets and the emergence of molybdenite in quartz veinlets, indicating clearly the upper levels of a porphyry system domain.

Cerro Verde

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An initial exploration program that will comprise rock chip sampling, geological mapping, alteration mapping (ASTER) and historical data compilation is planned for August 2011, prior to drilling. A number of areas remain untested and require first pass sampling.

Background

Genesis entered into an agreement with a private Chilean company to acquire a 100% interest in the Cerro Verde Gold-Copper-Silver Project in northern Chile. Mining in the area dates back to the 1800s but only limited modern exploration has been completed at the Project. Numerous high grade structures remain untested and the potential to discover new veins is considered high; as is the potential to define a large porphyry system on the Project.

Location and Access

The Project is located in the Atacama Desert in an area serviced by very good infrastructure about 750 km north of Santiago, 80 km south of the city of Copiapó and 75km east of the Pacific Ocean. The Project is easily accessed by a sealed road and well formed gravel roads from Copiapó. The altitude ranges from 1,800 to 2,200m, with low to moderate relief. Exploration can be conducted all year round.

Geology and Mineralisation

The Project hosts a sub-parallel swarm of precious and base metal-bearing quartz specularite veins exposed along the western flank of a caldera system that is elongated north-south. The host rocks comprise a sequence of Palaeocene andesitic volcaniclastics, dacite and rhyolite flows, flow-domes, diatreme-like breccias, and dikes capped by a blanket of rhyolitic ignimbrites. Ore-bearing veins cut the entire stratigraphic column. Mineralised veins and structures strike north to north east with moderate to steep dips to the east and west.

Project and Exploration History

Historic mining in the area dates back to the 1800s with several high grade veins mined at depth. Only limited historic mining records are currently available to Genesis. However, records indicate that in 1869 some 8,500 tonnes at ~17% copper were extracted from mines in the area. Small scale mining and reclamation of old stockpiles continues at present.

Minor surface exploration was completed by Homestake between 1998 and 1999. Between 2004 and 2005, Hochschilds (MH Chile) explored the area by surface mapping, sampling (334 surface samples) and limited diamond drilling (1,219m completed). The surface rock chip sampling by Hochschilds highlighted significant gold, copper and silver surface mineralisation over a 4km by 2km area. Strong arsenic, barium, bismuth, mercury, molybdenum, lead and stibnite anomalism is also present.

No other modern exploration is known to have been conducted at the Project.

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