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Location and Access
The Cerro Colorado high sulphidation gold project lies in in Azuay province, southern Ecuador 80km south of the city of Cuerco. The project lies at an elevation of 2,400 to 3,200m.
History
The project was explored by Newmont in the 1990s. Newmont carried out an extensive rock and soil sampling program, defining 3 targets but did not drill the project. Radius visited the project in mid-2006 and subsequently negotiated an option agreement, which was signed in early November 2006.
The Deal
Radius can earn 70% of the Cerro Colorado gold project by incurring exploration expenditures of US$3-million on or prior to the third anniversary of the commencement of drilling on the project. In addition Radius must make staged cash payments to the underlying property owner of US $1-million with US$100,000 payable on signing of the agreement. A further $125,000 is payable when Radius begins drilling with additional cash payments totalling $775,000 to be made up to and including the third anniversary of commencement of drilling on the project. Radius will also fund and prepare a feasibility study on or before the fifth anniversary of the start up of drilling. Once Radius has earned its 70% in the project, Radius and Mineca will negotiate a joint venture agreement to develop the project.
Geology
Cerro Colorado appears to be a high sulphidation type gold system. The extensive distribution of silica zones with hgihly anomalous gold, arsenic, mercury, antimony and copper values related to silica-alunite alteration are all indicative of potential for high sulphidation-type gold ineralisation.
Newmont's work identified 3 priority targets:
- Cerro Colorado is a 200m diameter hill with abundant pervasive silicification and was Newmont's main target area. It consists of abundant structurally controlled silica / limonite clay (sericite) rocks interspersed with bars of silica rich rocks. The general trend of the silica is roughly N60º-75ºE. There are local zones of alunite-rich hydrothermal breccia and patches of oxidized vuggy silica. The area has been tentatively interpreted as being at the roots of a large silica "Yanacocha-type" system. Values of trace to 2.7g/t Au have been recovered from gram and chip sampling of the zone. The size of the alteration and the extent of the silicification make Cerro Colorado a high priority drill target. Although detailed mapping and additional sampling would be needed to better define the first stage drilling.
- The Reservoir anomaly is located at the north end of the greater Cerro Colorado project area. The anomaly consists of poorly outcropping subvertical ribs of spongy silica with anomalous gold values. The main drill target consists of outcrops of altered limonitized and silicified ignimbrite which assays from trace to 1.1 g/t Au. The presence of associated anomalous cooper and arsenic values in the Reservoir zone suggests that enargite might occur there.
- Bola Rumi. This zone is situated 5km south of Cerro Colorado and consists of silica replacements within schistose Paleozoic or younger rocks. Silica ribs up to ±4-5m wide, with vuggy pervasive silicification and local brecciation, are gold-bearing, and occur in phyllites and tuffs. Anomalous gold values from trace to 4.5 g/t Au were returned from sampling. Quartz replacements occur for roughly 1km along strike. Much of the silicification at Bola Rumi, is apparently in shallow southerly (±20º) dipping, 2-4m thick tabular zones, that may be stratigraphically or structurally controlled. The Balo Rumi target also contains the highest silver values returned from Cerro Colorado with several values of up to 60g/t returned from the western end of the Bola Rumi area. This is quite distinct form the other anomalies, where Ag values are low (<5g/t).
Future Work
Radius will now focus on securing permits to carry out a drill program at Cerro Colorado.
Maps & Photos
Geology
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