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 (ha), was previously controlled by Mariana Resources Limited (“Mariana”), which was acquired by Sandstorm in July, 2017. The acquisition of the Santa Cruz Properties was completed on May 15, 2018.
A 5,272m “Phase I” Diamond Drill Program was initiated on the Los Cisnes and Las Calandrias Projects in early June, 2018, with first assay results from the 16 drill holes completed at Los Cisnes being released on July 26, 2018. Assays from the 2018 drilling at Los Cisnes have confirmed both down-dip and along-strike extensions to the high-grade silver mineralization reported by Mariana from a 2015 scout drill program. First assays from 25 drill holes completed at the Las Calandrias Project, which were focused dominantly on the evaluating extensions to the high-grade Calandria Norte resource area and the sub-parallel Morena vein/breccia system, are currently expected to be received during August, 2018.
Santa Cruz Properties - Overview
The Santa Cruz Properties consist of three advanced gold-silver projects (Las Calandrias, Los Cisnes, and Sierra Blanca), together with an extensive land holding of early stage Regional Prospects, covering a total area of 86,000ha. All projects are located in the highly mineralized Deseado Massif geological terrane in mining-friendly Santa Cruz Province, southern Argentina.
Important gold-silver mining operations in the Deseado Massif, one of the world’s key destinations for epithermal gold-silver deposits, include 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 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.
Highlights of the three most advanced projects include:
Las Calandrias – advanced epithermal gold-silver project that hosts an Indicated Category mineral resource of 491,000 ounces (“oz”) gold equivalent (“AuEq”1) @ 1.29 g/t AuEq, and an Inferred Category mineral resource of 28,000 AuEq oz @ 1.02 g/t AuEq. The Indicated Category mineral resource includes a contribution of 49,000 AuEq oz @ 9.35 g/t AuEq (3 g/t AuEq cut-off) from the Calandria Norte vein. Four priority high grade gold-silver targets - the bulk of which have been inadequately explored, including Calandria Norte, Morena, Despreciada/Nido, and Refugio - have been identified in and around the Las Calandrias claim block.
New Dimension is also owner of 230 sq km of surface rights over the main Las Calandrias targets.
Los Cisnes – high-grade silver-gold epithermal vein system located 75km SW of Yamana Gold’s Cerro Moro gold-silver mine. Previously drilled by Mariana, Los Cisnes encompasses an area that is 4km2, with two target zones identified to date: El Brio (high grade veins) and El Solar (bulk tonnage mineralization).
Sierra Blanca –high-grade silver-gold vein field with four targets identified to date along >22 km of cumulative strike length supported by extensive channel sampling undertaken by Mariana. Sierra Blanca is located 40km NNW of Anglogold Ashanti’s Cerro Vanguardia gold-silver mine
Prior to New Dimensions’s acquisition of the Santa Cruz Properties, approximately $C25 million had previously been spent by Mariana exploring the portfolio.
1 AuEq oz are calculated by New Dimension with reference to a cut-off grade of 0.3 AuEq/t for oxide and transition material, and 0.7 AuEq/t for primary, and by multiplying mineralized tonnes by gold equivalent grade, dividing by 31.1, and assuming 100% metallurgical recovery.
Las Calandrias Mineral Resource Estimate
The Las Calandrias is host to a mineral resource estimated and reported by Mine Development Associates (“MDA”) as follows:
Calculated using a variable cutoff accounting for varying metallurgical recoveries: 0.3 AuEq/t for oxide and transition material, and 0.7 AuEq/t for primary. 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.
This mineral resource estimate is based on the results from 44,911 metres of drilling in 326 diamond drill holes, and includes contributions from both the bulk tonnage, rhyolite dome-hosted Calandria Sur deposit and the high-grade Calandria Norte vein/breccia system.
The resource estimate was completed by Steven Ristorcelli, of Mine Development Associates, 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 the NI 43-101 technical report, which was filed on SEDAR (www.sedar.com) on April 10, 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.
2018 Exploration Program
In early June, 2018, the Company initiated a “Phase I” Diamond Drill Program on the Los Cisnes and Las Calandrias Projects. A total of 41 drill holes for 5,272m were completed (16 holes for 1,564m at Los Cisnes, and 25 holes for 3,708m at Las Calandrias). This drill program was the first to be undertaken by New Dimension since the acquisition of the Santa Cruz Portfolio of 3 advanced-stage gold-silver projects from Sandstorm Gold Ltd (TSX: SSL, NYSE: SAND) in May, 2018 .
Assay results from the 16 drill holes completed at Los Cisnes were released on July 26, 2018. Assays from the 2018 drilling at Los Cisnes have confirmed both down-dip and along-strike extensions to the high-grade silver mineralization reported by Mariana from a 2015 scout drill program. First assays from the 25 drill holes completed at the Las Calandrias Project, which were focused dominantly on the evaluating extensions to the high-grade Calandria Norte resource area and the sub-parallel Morena vein/breccia system, are currently expected to be received during August, 2018.
Program Details - Las Calandrias
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, sufficient drilling had also been completed along approximately 400m strike length of the NE-trending Calandria Norte vein/breccia system in order to allow for the declaration of an Indicated Category mineral resource of 162kT @ 9.35 g/t AuEq1 (see NI 43-101 technical report for Las Calandrias as filed on SEDAR on April 10, 2018). Significant intercepts from a central high grade shoot at Calandria Norte that were reported by Mariana Resources Ltd2 include:
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
As the Calandria Norte vein/breccia zone currently remains open to both to the north and south (and potentially down plunge also), the testing of possible extensions to the known high grade gold-silver resource area represents an immediate priority for the Company.
The Morena vein/breccia system lies immediately to the northwest of Calandria Norte (see Figure 2) and has seen only seen limited drilling, despite surface sampling returning gold grades ranging from below detection limit (<0.1 g/t Au; BDL) to up to 116 g/t Au. The current interpretation is that the Morena vein/breccia zone strikes northeast (i.e., is sub-parallel to Calandria Norte) and dips steeply to the east-southeast. A total of eleven drill holes were completed in the southern part of the Morena zone, with the best mineralized intercept being 0.6m @ 68.1 g/t Au + 107 g/t Ag from 59m downhole in CND250. The northern extension of the Morena vein remains completely untested; indeed, chalcedonic silica is exposed on surface (similar to that observed in the northern part of the Calandria Norte vein) and suggests that drilling should initially be focused on testing around 100-150m vertically below surface.
The Refugio target lies approximately 6km west of Calandria Norte, and consists of a 1.5km-long, northeast trending sub-cropping vein/breccia system with high anomalous molybdenum concentrations (from BDL to 800ppm). The Refugio vein/breccia system has not seen any drilling to date, so scout drilling of this target will form part of the current drill program.
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.
Calandria Norte Longitudinal Section
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 Ag2) (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
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.
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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