Radius Gold Inc.
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Holly-Banderas Project, Guatemala

Location and Access

The Holly-Banderas (HB) project is located roughly 110km due east of Guatemala City, about a 3 hour drive from the Capital. Infrastructure is excellent and the project easily accessible by dirt road in a hilly, forested region approximately 11km southwest of the small town of Chiquimula.

Ownership

100% Radius

Overview

The Holly and Banderas epithermal gold-silver occurrences that make up the HB project were discovered by Radius during a regional stream sediment sampling program in eastern Guatemala in 2001 and 2002. Originally explored between 2002-2004, market conditions and a low gold price forced Radius to option the property to Glamis Gold Inc. in 2004-2005.

The Holly project lies on the western end of the HB project area and was discovered in a road cut. It appears to straddle the major Jocotan fault system which separates volcano-sedimentary units to the south from metamorhpic rocks to the north. The Banderas project is 5-6km southeast of Holly, and occurs within variably altered volcanic rocks.

The project was returned to Radius in 2005 and re-activated in 2009 in response to higher gold and silver prices, and the recently discovered Escobal deposit, currently under exploration by Tahoe Resources Inc. Escobal is located 69 km to the west of the HB project, confirming that southern Guatemala is prospective for major precious metal deposits.

Escobal is hosted in the same Tertiary volcanic package as HB and within the same structural domain. Silver grades and mineralization widths at Escobal are reminiscent of Mexico's major silver districts. Initial shallow drilling at Escobal produced low grade results, but deeper drilling (>250m) returned bonanza silver grades over impressive widths. The most recent resource at Escobal is reports over 367 Moz of Ag, indicated:
Category
Tonnes
Ag (g/t)
Au (g/t)
Pb (%)
Zn (%)
Indicated
27.1
422
0.43
0.71
1.28
Inferred
4.6
254
0.59
0.34
0.66

Intriguingly, the initial shallow drilling conducted at HB between 2002-2004 returned some attractive results. However, the depth potential of the HB project remains untested.

Goldcorp's Cerro Blanco gold deposit is located 35 km due south of the HB project. It is a hot spring gold system where early shallow drilling again returned broad low grade results but later, deeper holes resulted in the definition of an indicated resource of 1.27 million ounces of Au (2.52 Mt at 15.64 g/t Au).

Radius now controls over 1,500 square km of granted concessions and concession applications in the region covering a virtually unexplored, highly prospective Tertiary volcanic belt.

Escobal deposit resource from: "Escobal Guatemala Project. NI 43-101 Preliminary Economic Assessment. Prepared for Tahoe Resources Inc. by M3 Engineering & Technology Corporation. May 7, 2012"
Cerro Blanco deposit resource from: "Goldcorp Mineral Resources statement, 2011"

Radius has been unable to verify the information given here on adjacent properties, and the presence of significant mineralization on these adjacent properties is not necessarily indicative of similar mineralization on the Holly-Banderas property.


HB Geology Overview
The HB project is a classic, low sulphidation Ag-Au rich epithermal system with multiple veins, alteration zones and anomalies over many kilometers of strike length. Radius is systematically mapping, sampling and drill testing the known anomalies while continuing to expand the project by prospecting and sampling of new zones. Much of the information on this webpage on alteration, vein geometry and timing of mineralization is taken from a report by structural geological consultants from the consulting company SRK Consulting who visited the project in 2011.

It is hosted by Tertiary-Quaternary volcanic rocks south of the major Jocotan and Polochic faults. There are 3 main trends at the Banderas occurrence -M28, Pyramid Hill and Zapote- in addition to the Holly and the recently discovered high grade Pino zones. The key veins trend about 320° - 340°; over strike lengths of over 2,000m.

The volcanic stratigraphy is comprised of rhyolite flows and/or dikes, volcaniclastics, andesite flows and tuffs which appear to be cross cut by abundant mafic dykes and flows, although the difference between the two is sometimes hard to determine in core.

Mineralization at Banderas
The dominant styles of epithermal mineralization at Banderas are:
  • Silver-rich "jigsaw breccia" with a quartz-pyrite-rich matrix
  • A network of gold-silver bearing sulphide-poor epithermal quartz veins with colloform, bladed and drusy textures, which cross cut the jigsaw breccia
Alteration
The earliest stage of hydrothermal alteration at HB is characterized by chlorite with traces of pyrite in andesite. This is followed by quartz-pyrite-mica alteration in andesite which is seen filling vesicles, as a weak stockwork of pyrite-rich veinlets, and is associated with mica alteration (bleaching). Late pervasive silica-adularia/buddingtonite replaces earlier quartz-pyrite-mica alteration and affects all lithologies except certain mafic dikes. It is spatially associated with the broader zones of epithermal Au-Ag mineralization. Alteration associated with the main stage of Au-Ag mineralization is primarily low-sulphide quartz veins and vein breccia with minor adularia. A late stage acid leach alteration may represent the very last acidic vapor phase of the epithermal system as it collapsed.

Structural Geology & Vein Geometry
Key for the geometry of the Banderas epithermal veins intersected in drilling comes from the orientation of outcropping veins, the continuity of veins intersected by several boreholes and small scale vein relationships in core.

The impact of late stage brittle faulting, which locally dissects all of the known veins at Banderas area is unclear. The main structural features are brittle fault zones and veins. One of the more extensive structures located near Pyramid Hill juxtaposes two differently-altered rock panels, and contains broader epithermal vein zones emplaced during active faulting.

The M28 Zone is characterized by stacked moderately southwest-dipping epithermal veins offset by several younger brittle faults that are hard to model. In places, the textures and vein structures suggest that some veins may have been emplaced into active fault zones. Interpretation of vein intersections suggests that the main Au-Ag epithermal veins dip moderately to the West.

The Zapote zone is southwest of, and probably parallel to the M28 / Pyramid Hill zones. At surface the zone is an impressive, steeply west-dipping vein exposed with a true thickness of between 5 to 10m, although the orientation is still uncertain.

Mineralization Model
The Banderas Area is characterized by three main areas of Au-Ag epithermal mineralization: Pyramid Hill, Zapote and M28. The epithermal system exhibits a staged evolution:
  1. Silica-Adularia alteration with local Ag-rich jigsaw-breccia;
  2. the main low-sulphide Au-Ag epithermal quartz vein stockwork; and
  3. late jarosite and acid leach alteration (acid vapour phase?) which is widespread between Pyramid Hill and M28 zone.
There are two main vein orientations which both trend southeast-northwest, but one which dips steeply to sub-vertically to the east, and the other moderately to the west.

At Pyramid Hill on the western limit of the area investigated by drilling, the system is characterized by a more prominent brittle fault juxtaposing differently altered rock panels, thicker zones of epithermal vein stockwork bounded by brittle faults, and a distinctive high energy breccia predating the main stage of epithermal veining and bounded by brittle faults.

The eastern limit of the area investigated by drilling, the M28 area is characterized by Au-Ag epithermal veins generally dipping moderately southwest. Mineralization here is hosted in fractures or in brittle faults and possibly disrupted by late brittle faults, impacting local vein continuity. The M28 area is located just west of a pronounced northwest-trending topographic lineament, possibly marking a regional fault which may mark the eastern boundary of the Banderas epithermal system.

Work Programs
Radius and its former joint venture partner Glamis have completed a number of phases of work at the HB project since its discovery, including 49 drill holes (43 core, 6 RC). Radius diamond drilled 22 holes (±2,500m) at Banderas in 2002/3. Glamis conducted two short drill programs mainly testing for bulk mineable gold in one zone at Banderas. Radius completed another program over the winter of 2010/2011.

Most drilling targeted the M28 and Pyramid Hill zones confirming the continuity of the mineralization both along strike and down dip in the majority of the zones tested. However, a recent extensive review of the drill data by SRK Consulting and RDU geologists indicates that all of the work has focused on the near surface parts of the Banderas epithermal system. This portion is characterized by an extensive late jarosite overprint that is more characteristic of acid sulfate systems. It is unclear if this acid alteration is related to the Banderas epithermal system (vapour phase above boiling zone) or a late supergene overprint.

SRK recommended that future drilling should investigate the depth extensions of the system below the near surface jarosite altered area. This finding corroborates Radius own TerraSpec (short-wave infrared spectrophotometer) study on the alteration minerals present at surface and in core samples at HB, which suggest that Radius's drilling has not reached what would be termed the productive horizon where economic gold and silver grades would be expected to occur over mineable widths. The work is indicating that drilling needs to target between 300 to 700 meters vertically below the paleo water table. Interestingly, RC drill hole BRC04-024 cut an argentite-bearing quartz vein over 3m core length which graded 36.5 g/t gold plus 274 g/t silver from 167m downhole, and is both the highest grade and deepest drill intersection on the Banderas property. Consequently, Radius has stopped drilling at HB until the full data review is complete. Management currently anticipates that the project review will result in a recommendation for a major drill program to commence later in 2011 or early 2012.

A full table of significant drill results is given here.
Hole No. From To Interval Au g/t Ag g/t
Banderas
BDD-001 13.8 14.3 0.5 6.2 99
BDD-002 28.5 30.3 1.8 2.9 57
BDD-003 28.9 30.7 1.8 7.2 123
29.9 30.3 0.4 21.5 147
BDD-004 53.9 58.2 4.3 6.0 72
BDD-005 29.0 30.5 1.5 7.4 84
BDD-006 48.8 50.5 1.7 6.0 76
BDD-007 77.7 79.3 1.6 7.5 33
70.1 71.9 1.8 2.8 85
BDD-008 86.9 90.5 3.6 9.3 41
89.0 90.5 1.5 18.8 64
BDD-009 44.2 45.7 1.5 3.1 31
BDD-010 67.1 68.6 1.5 1.9 2
BDD-011 nsr      
BDD-012 91.7 93.1 2.0 4.4 31.9
BDD-013 nsr      
BDD-014 56.3 58.5 2.2 6.9 261.9
70.1 71.6 1.5 4.2 232.0
BDD-015 65.5 67.0 1.5 3.8 9.8
BDD-016 154.5 156.1 1.6 5.0 4.3
BDD-017 Hole abandoned    
BDD-018 67.9 71.6 3.7 3.9 99.3
67.9 68.5 0.6 12.1 28.1
BDD-019 86.9 89.6 2.6 6.8 94.8
88.4 89.6 1.2 14.0 103.0
BDD-020 nsr      
BDD-021 nsr      
BDD-022 62.5 69.2 6.7 3.9 69.8
66.8 67.7 0.9 11.8 90.5
BRC-04-023 133.5 136.5 3.0 0.24  
BRC-04-024 165.0 174.5 9.0 12.35 95
inc 167.0 170.0 3.0 36.5 274
BRC-04-025 nsr      
BRC-04-026 nsr      
BRC-04-027 82.5 84.0 1.5 1.5 19
BRC-04-028 85.5 87.0 1.5 2.17 9
Hole No. From To Interval Au g/t Ag g/t
Holly
HDD-1 34.8 49.0 14.2 4.14 150
HDD-2 nsr      
HDD-3 nsr      
HDD-4 39.1 60.1 21.0 13.74 544
54.1 60.1 6 43.56 1617
HDD-5 19.1 29.7 10.6 7.95 263.4
19.1 22.7 3.6 22.00 697
HDD-6        
HDD-7 88.5 97.5 9 1.84 45.1

The Pino Zone
In early 2011, Radius' field teams identified a high grade gold-silver zone on the north side of the Holly ridge (the Pino Zone). Previous prospecting and sampling in this area discovered quartz boulders believed to be float. A data review by Radius highlighted 18 historic grab samples of electrum-bearing epithermal vein quartz collected from the Pino zone, a low sulphidation epithermal quartz vein hosted by schists on the northwestern side of the HB project. Gold assay results from the 18 samples ranged from just under 1 g/t Au to 112 g/t Au, with an average of 19.8 g/t Au. Silver values range from trace to 7,091.8 g/t Ag. Trenching in the area has now found texturally-similar quartz veins in situ in the schists directly below the boulders. Assay results from the four chip samples in the recent trench, constituting a continuous sample of 5.1 meters of the vein, returned 58.26 grams per tonne gold and 1,937 grams per tonne silver over 5.1 meters (including 110.28 grams per tonne gold and 3,520.6 grams per tonne silver over two meters). This is a significant find as little work has previously been done on the north side of the Jocotan fault, despite the presence of large, coherent, untested gold in soil anomalies there.

At the present time the company does not know the true width or orientation of the structure, and further trenching is required to determine the strike and dip of the vein. Radius completed grid-based soil geochemistry and geophysics over the property in 2002, and the indications from this work are that the vein is striking north-south, and there is a coincident geophysical IP anomaly. This discovery, however, is close to the northern limits of the grid.