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Properties

– Mexico Properties

– Salamandra Project, Durango State, Mexico

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Salamandra Project, Durango State, Mexico

Jerry D. Blackwell, P. Geo. B.C., Advisor to the Board of Canasil, is the designated Qualified Person for the Company's technical information in accordance with National Instrument 43 101.

Location, access and infrastructure

The Salamandra project covers14,760 hectares (38,640 acres), located 35 km NE of the city of Durango in the El Guadiana valley in Durango State, with excellent access from the city of Durango via paved and gravel roads. The access, infrastructure, climate and topography at Salamandra provide favourable conditions for exploration and development. This large claim area is strategically located within the major silver-gold trend running through Durango and Zacatecas States, and is directly on trend with a number of important operating mines and recent discoveries. The project is located on the mineral-rich Fresnillo geologic trend, approximately 80 km northwest of and within a similar geologic environment to the San Martin mine of Grupo Mexico, which is the largest underground silver-copper-zinc mining operation in Mexico, producing at approximately 6,000 tonnes per day.

Overview of Geology and Exploration History

The exploration program to date at the Salamandra project indicates the potential for a large buried intrusive and carbonate hosted massive sulphide skarn/manto replacement system. The mineralized system is centered around a main rhyolite dome structure associated with an intrusive center in the project area. Widespread silver-copper-antimony-arsenic surface anomalies with peripheral lead and zinc anomalies are found over a very large area. Together with significant silver-zinc intercepts reported from drilling to the southwest of the rhyolite dome, and a very high grade silver-copper-zinc vein outcrop to the east of the dome structure, these geochemical anomalies are interpreted to be related to a buried intrusive and carbonate hosted massive sulphide skarn/manto replacement system under thin alluvial cover below and surrounding the rhyolite flow dome.

Initial sampling of mineralization observed on the southwest contact of the rhyolite dome returned significant silver and zinc values up to 7.84% zinc and 25 g/t silver over 3.2 meters. Follow up ground geophysics outlined chargeability anomalies below and to the southwest of the dome structure. Diamond drilling in this area returned significant silver and zinc-silver mineralization including 9.85 meters of 102 g/t silver and 0.55% zinc, 7.45 metres of 50 g/t silver and 12% zinc and 10 metres of 71 g/t silver, 3.48% zinc and 1.26% lead, as well as wider zones of lower grade zinc-silver mineralization. A follow up ZTEM airborne geophysical survey completed in 2011 outlined a much larger complex response area covering 2.5 km by 3.5 km, where detailed surface sampling led to the discovery of a high grade vein outcrop, carrying 2,150 g/t silver, 5.39% copper, and 1.89% zinc over 0.90 metres. In addition, sampling has outlined extensive areas of anomalous silver-copper-arsenic-antimony with peripheral lead and zinc anomalies. These results indicate the potential for a large silver-zinc-lead-copper mineralized system. This mineralization is associated with skarn, hydrothermal breccias, sulphide rich veins and quartz porphyry dykes. Preliminary metallurgical testing on samples of mineralized drill core indicates high zinc and silver recoveries to clean concentrates.

Initial Evaluation Samples 2006:

The Salamandra project area had been historically investigated by the Mexican Geological Survey and by BHP for potential silver and base metal mineralization. There are signs of one or two historical drill holes by BHP on the flank of the rhyolite dome without any records or details and results from these drill holes. There has been no systematic historical exploration and drilling in the project area.

Initial Canasil chip and grab samples from mineralization observed along the contact of the rhyolite dome and surrounding basalt cover plain at the Salamandra project returned encouraging zinc and silver mineralization, grading up to 7.84% zinc and 25g/t silver over 3.2 metres. The mineralization is associated with fault and fracture replacement zones within a thin band of argilically altered and silicified siltstones and inter-bedded limestone along the south-western contact of the rhyolite porphyry intrusive. The principal mineralized target area at the project was considered to be in the flat areas covered by shallow gravel and basalt to the southwest of the mineralized sediment outcrops.

Nine samples taken from the contact area on the flank of the main intrusive body reported strong zinc and silver values as presented in the table below. Two check samples taken during a property evaluation visit in January 2006 confirmed the positive zinc and silver values reported, with anomalous copper grades.

Salamandra project, Durango, Mexico – historical and evaluation samples:


Sample
Ref.
UTM Coordinates
East North
Elev.
(m)
Width
(m)
Gold
g/t
Silver
g/t
Lead
%
Zinc
%
Copper
%
Historical Samples
426
567516
2670933
1937
Dump
0.05
12
0.07
3.76
0.08
427
567522
2670935
1934
Dump
0.16
10
0.05
3.44
0.04
428
567523
2670945
1934
3.20
0.09
25
0.07
7.84
0.34
429
567488
2670967
1944
25.00
0.02
4
0.06
1.62
0.01
430
567586
2670897
1931
12.00
0.08
16
0.23
3.03
0.03
431
567607
2670878
1944
Dump
0.04
16
0.22
1.40
0.04
432
567653
2670838
1943
10.00
0.03
20
0.35
1.35
0.04
433
567714
2670808
1946
15.00
0.02
10
0.17
0.47
0.01
434
567725
2670805
1940
Dump
0.04
10
0.17
0.41
0.02
Check Samples Jan. 2006
1762
567520
2670938
1934
3.00
0.19
39.8
0.10
6.59
0.52
1763
567517
2670929
1934
Dump
0.01
11.6
0.07
5.58
0.11


Exploration Program 2006-2007:

Canasil completed a 3-Dimensional Induced Plarization geophysical survey at the Salamandra project in October 2006 over an area of 2 km x 1.2 km covering the southwest flank and over the rhyolite dome. At the same time a geological mapping and surface sampling program was completed for additional surface information. Based on the results of these surveys drill targets were identified, and a diamond drill program of 12 drill holes for a total of 3,595 metres was completed in 2007. The drill program on the  western flank of the interpreted intrusive source intersected wide zones of calc-silicate skarn with disseminated silver-zinc mineralization, averaging 0.5% - 1.0% zinc and 5 g/t - 20 g/t silver, and  high-grade silver-zinc sulphide filled and structurally controlled breccia zones grading up to 20% zinc and 300 g/t silver. Initial metallurgical tests have also been completed on blends of high and low grade samples, returning high recoveries to clean concentrates, as well as petrographics and ore mineralogy on drill core samples.

3D-Induced Polarisation Geophysical Survey – October 2006

The geophysical survey consisted of a 14 km line 3-Dimensional Induced Plarization (IP) / Resistivity geophysical survey, which was completed in October 2006 to test for anomalous structures below the surface. The survey covered an area of 2 km x 1.2 km over the apex and south-western flank of the rhyolite porphyry intrusive and was designed to test for sulphide mineralization with associated zinc and silver bearing zones within limestones and siltstones in a poorly exposed bedrock area. Initial survey results show two large chargeability anomalies measuring 200 to 400 metres in width by 800 to 1,000 meters in strike, with thicknesses of 200 to 300 meters located on the south-western flank of the intrusive body, as well as beneath the intrusive body at a depth of 200 to 500 meters.Based on the results of the geophysical survey and a geochemical sampling program over the survey area, a Phase 1 diamond drill program was implemented in 2007 to test the drill targets indicated by these programs.

Phase 1 Diamond Drill Program – 2007

The Phase 1 diamond drill program at the Salamandra zinc-silver project included a total of 3,595 meters in 12 drill holes in two stages of 8 drill holes followed by a further 4 drill holes. Seven out of the eight initial drill holes intersected zinc-silver mineralized zones with a total combined width of 489.07 metres. Six of the eight drill holes returned higher grade zones with a total combined width of 56.26 metres. A table showing the significant mineralized intercepts from these drill holes is attached below.

The initial drill program tested one of the target areas indicated by surface geochemical sampling and 3D-IP geophysics over a strike length of 500 metres with 5 drill holes (SA-07-01 to SA-07-05) collared at 100-metre to 200-metre intervals along a NW-SE line. The remaining 3 drill holes (SA-07-06 to SA-07-08) stepped out laterally by 50 metres in the central area of this zone. This systematic drill pattern provided a basis for the initial evaluation of this prospective mineralized zone. Higher grade mineralization was intersected towards the center of this area in drill holes 02, 03, 06, 07, & 08. Lower grades were intersected at the outer edges in drill holes 01, 04 and 05. The position of the 8 drill holes in the Phase 1 diamond drill program is indicated on the drill plan map.

Salamandra Zinc-Silver project, Durango State, Mexico
Phase 1 Diamond Drill Program, Drill Collar Locations on
Surface Zinc Geochemistry and Chargeability Profile at 150 metres depth.


Salamandra Project – Phase 1 Diamond Drill Holes SA-07-01 to SA-07-08
Zone/Interval
Sample Interval – metres
Width Metres
Grades
From
To
Silver g/t
Zinc %
Lead %
SA-07-02
Zone 1
7.40
17.25
9.85
102
0.55
0.03
Zone 2
27.65
35.10
7.45
50
12.00
0.06
Zone 3
69.00
85.00
16.00
6
0.52
0.00
Zone 4
111.00
133.00
22.00
2
1.08
0.01
Zone 5
145.00
180.10
35.10
11
0.54
0.06
SA-07-03
Zone 1
116.40
127.00
10.60
16
1.60
0.26
Zone 2
195.00
215.00
20.00
45
2.62
0.77
Including
195.00
205.00
10.00
71
3.48
1.26
Zone 3
220.75
226.00
5.25
9
1.70
0.11
Zone 4
226.00
263.00
37.00
6
0.69
0.06
SA-07-04
Zone 1
48.00
88.80
40.80
15
0.32
0.21
Zone 2
194.77
224.08
29.31
13
0.74
0.16
Including
196.00
204.00
8.00
26
1.39
0.35
And
214.00
222.00
8.00
9
1.04
0.11
SA-07-05
Zone 1
212.00
256.00
44.00
2
0.32
0.02
Zone 1
256.00
268.56
12.56
13
1.78
0.02
Including
262.00
267.66
5.66
19
2.75
0.03
SA-07-06
Zone 1
3.40
15.00
11.60
13
4.05
0.03
Including
3.40
8.40
5.00
7
3.42
0.03
And
9.10
13.80
4.70
20
6.12
0.05
Zone 2
88.00
108.00
20.00
13
0.80
0.10
Including
100.00
106.00
6.00
2
1.34
0.04
Zone 3
180.60
225.10
44.50
3
0.80
0.04
Including
204.00
212.00
8.00
4
1.46
0.06
SA-07-07
Zone 1
98.00
126.00
28.00
11
0.93
0.10
Including
98.00
99.40
1.40
30
1.28
0.08
And
118.00
126.00
8.00
18
2.07
0.05
Zone 2
140.10
184.00
43.90
7
0.77
0.05
Including
140.10
152.00
11.90
9
1.36
0.05
And
174.00
178.00
4.00
12
1.63
0.12
SA-07-08
Zone 1
195.60
201.50
5.90
11
0.61
0.41
Zone 2
209.00
231.00
22.00
6
0.28
0.10
Zone 3
261.00
271.00
10.00
29
3.51
0.42
Including
261.90
265.43
3.53
72
4.75
1.03
And
267.40
269.50
2.10
4
7.91
0.04
Zone 4
321.75
335.00
13.25
4
0.57
0.00


Drilling in this area of the Salamandra project indicates that zinc-silver minerlization is associated with fracture controlled and disseminated replacement zones in hornfelsed limy sediments in contact with a quartz porphyry intrusive. Zinc-silver mineralization consists of higher grade sections from 5 -10 meters in width grading between 2% -12% zinc and 10 g/t - 100 g/t silver, within wider mineralized sections of 20 - 45 metres in width grading from 0.32% -1.08% zinc and 2 g/t – 45 g/t silver In drill holes SA-07-02 to SA-07-08, the weighted average of all 489.07 metres of lower grade mineralized drill intersections is 1.09% zinc and 12.65 g/t silver, and the weighted average grade of 55.26 metres of higher grade intercepts is 4.73% zinc and 54.73 g/t silver. This initial program indicates the discovery of a potentially large zinc-silver mineralized system, including sections of high grade mineralization, at the Salamandra Project. Soil and rock geochemical sampling indicate the mineralized trend extends on strike for an additional 1,000 meters.

A further 4 drill holes (SA-07-09 to SA-07-12) continued to intersect significant higher-grade zinc and silver intercepts within broader zones of lower grade mineralization. They extended the area over which the zinc-silver mineralized system is observed at the Salamandra project from 500 metres to 700 metres along strike. Eleven of the twelve drill holes have intersected zinc-silver mineralized zones with significant grades and widths. These mineralized zones appear to be part of a potentially large mineralized system, which is open along strike and to depth, and only a small part of which has been explored to date.

Salamandra Project – Phase 1 Diamond Drill Holes SA-07-09 to SA-07-12
Zone/Interval
Sample Interval - metres
Width Metres
Grades
From
To
Silver g/t
Zinc %
Lead %
SA-07-09
Zone 1
48.00
56.00
8.00
22
0.48
0.08
Zone 2
249.00
275.00
26.00
13
0.81
0.18
Zone 3
281.65
284.15
2.50
4
3.22
0.01
Zone 4
326.00
329.00
3.00
12
1.86
0.04
Zone 5
355.10
363.30
8.20
4
2.09
0.01
Includes
355.10
357.50
2.40
4
3.00
0.01
And
360.50
363.30
2.80
6
2.59
0.01
 
 
 
 
 
 
 
SA-07-10
Zone 1
61.00
70.00
9.00
1
0.76
0.01
Zone 2
182.18
240.00
57.82
4
0.78
0.06
Zone 3
200.00
204.70
4.70
18
1.47
0.30
Zome 4
222.70
238.00
15.30
3
1.93
0.02
Includes
230.00
234.35
4.35
5
5.51
0.05
 
 
 
 
 
 
 
SA-07-11
Zone 1
58.40
93.30
34.90
8
0.50
0.17
Includes
58.40
62.20
3.80
40
1.30
1.16
 
 
 
 
 
 
 
SA-07-12
Zone 1
120.00
125.00
5.00
4
1.52
0.05
Zone 2
199.15
260.00
60.85
6
0.51
0.06
Inlcudes
199.15
204.00
4.85
9
0.91
0.11
and
215.00
217.50
2.50
19
1.23
0.14
and
226.00
237.00
11.00
7
1.06
0.07
and
228.50
230.90
2.40
10
2.87
0.09
 


Exploration Program 2011-2012:

In 2011 a ZTEM airborne geophysical survey was completed over the entire Salamandra claim block. This survey outlined a large complex response area of 2.5 km by 3.5 km located to the east of the rhyolite dome structure, indicating a potentially much larger mineralized system. Detailed surface sampling over this area discovered a high-grade vein outcrop, carrying 2,150 g/t silver, 5.39% copper, and 1.89% zinc over 0.90 metres, and extensive areas of silver-copper-zinc-lead-arsenic-antimony anomalies, which further confirm the potential for a very large silver-zinc-copper mineralized system.

ZTEM Airborne Survey 2011:

The ZTEM helicopter-borne geophysical survey at Salamandra covered 120 square kilometres (12,000 hectares) with 617 line-km of survey flights (62 lines,10 km per line with a 200 metre line spacing) providing electromagnetic and magnetic geophysical data. The survey outlined a large complex response area, measuring 2.5 km by 3.0 km, with low resistivity and flat magnetic response, interpreted to be an intrusive source, located east of and flanking the previously drilled Salamandra mineralized zone. The interpreted intrusive source is bounded by a north trending large regional fault on the east, and crosscut by several east–west fault zones. According to Frank Fritz, Canasil’s consulting geophysicist: “these are favourable locations for structurally controlled mineralization”.

Surface Sampling of ZTEM Response Area 2011:

An initial surface mapping and sampling program conducted in late 2011 to investigate the area of complex electromagnetic response from the ZTEM airborne survey discovered some historic workings with very high grade silver, copper and zinc. A 0.90 metre rock chip sample from a small previously mined vein outcrop returned 2,150 g/t silver, 5.39% copper, 1.89% zinc and 0.157 g/t gold. A sample from a nearby dump of mined material returned 99.7 g/t silver, 1.25% copper and 0.94% zinc.

These samples are located on the eastern side of rhyolite dome within the area outlined by the ZTEM survey and a zone returning anomalous copper values from earlier geochemical surveys as shown on the map below.

Salamandra Project ZTEM Response Area and High-grade Silver, Copper, Zinc Samples:

Surface Sampling of ZTEM Response Area 2012:

Further surface sampling and mapping was completed in 2012, providing for a comprehensive surface sampling and mapping program covering the ZTEM response area of 3.5 km by 4.5 km. This included the collection of 949 samples (829 soil samples, 76 rock samples and 44 chip samples) covering the ZTEM airborne anomaly, as well as areas surrounding the main rhyolite dome structure associated with an intrusive center in the project area. The sample results show widespread silver-copper-antimony-arsenic anomalies with peripheral lead and zinc anomalies over a very large area. Together with significant silver-zinc intercepts reported from earlier drilling to the southwest of the rhyolite dome, and the high grade silver-copper-zinc vein outcrop to the southeast of the dome structure, these geochemical anomalies are interpreted to be related to a buried intrusive and carbonate hosted massive sulphide skarn/manto replacement system under thin alluvial cover below and surrounding the rhyolite flow dome. The areas of silver-copper-lead-zinc anomalies and arsenic-antimony anomalies are shown in the maps below.

Salamandra Exploration Target:

The interpreted intrusive source outlined by the ZTEM survey is alluvium covered and has not been drill tested. There is excellent potential in this area to outline disseminated mantle replacement or high-grade breccia associated silver, zinc and copper mineralization related to acid quartz porphyry intrusives, similar to the large San Martin mine of Grupo Mexico, located 80 km to the southeast. A conceptual section model of the potential mineralized system is included for reference.

Further Exploration:

This potentially large mineralized system presents multiple drill targets for further exploration. A surface IP geophysical survey over the eastern zone defined by the airborne ZTEM survey and recent geochemical sampling is planned to better define high priority drill targets.

MAG option agreement, May 2013:

Under the agreement, MAG will have a first option to earn 55% interest in Salamandra by incurring C$5,500,000 exploration expenditures and making C$750,000 cash payments to Canasil over four years. The first year expenditures of $1,000,000, which must include at least 3,000 meters of diamond drilling, will be a firm commitment. Upon completion of the first option, MAG will have a second option to earn an additional 15% interest, for a cumulative 70% interest, by either preparing and delivering a NI43-101 compliant feasibility study within four years, or by incurring an additional C$20,000,000 in exploration expenditures over four years, with a minimum annual expenditure of C$2,500,000.

MAG data review and surface sampling 2013:

MAG has recently carried out a surface sampling and geological mapping program and completed a detailed review of geological data and drill core from Canasil’s past exploration programs, including prior surface sampling and geological mapping, surface and airborne geophysical surveys and 3,500 meters of diamond drilling in 12 drill holes. This has confirmed 12 out of 13 common indicators of large Carbonate Hosted Replacement Deposits (“CRD”) at Salamandra, which represents 5 more indicators than at MAG’s Cinco di Mayo project at the time of acquisition.

Common features of all large known CRD deposits* Salamandra*

1. Location – main street CRD belt
2. Ag (+400 g/t), Au, Zn, Pb, Cu, + Mn, As, W ....
3. Multiple mineralization and alteration stages
4. Large scale zoning
5. Located on top of carbonate section (room to grow)
6. Presence of Felsite dykes
7. Presence of Skarn
8. Discordant geometry (not syngenetic)
9. Replacement mineralization
10. High Iron Sphalerite
11. Pyrite pseudo-morphs and pyrrhotite
12. Molybdenum mineralization
13. Granitic Stock Contact Skarn = Target
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes

* Information from MAG Corporate Presentation – November 2013

MAG Phase 1 drill program, Dec. 2013 – Mar. 2014:

MAG’s Phase 1 drill program included five drill holes for a total of 3,500 metres. The drill holes were widely separated (see map below) and all five hit high-grade to strongly anomalous silver-copper or zinc mineralization over significant widths (see Table below).

Hole SM14-15 hit high-grade silver-copper mineralization over 7.89 metres, which reported 166 grams/tonne (“g/t”) (4.9 ounces per ton (“opt”)) silver (“Ag”) and 1.2% copper (“Cu”), including: 2.3 metres grading 393 g/t (11.5 opt) Ag and 3.6% Cu with appreciable lead (“Pb”) and zinc (“Zn”).  In contrast, Hole SM13-13 cut 31.72 metres grading 3.5% Zn including 17.72 metres grading 5.0% Zn with no other appreciable metals.  Notably, SM13-13 contained zinc mineralization for almost its entire length, with 810 metres averaging 0.6% Zn including several thick zones grading over 1.5% Zn.  The remaining three holes cut significant or strongly anomalous amounts of Ag, Cu, Zn and Pb. The drill results continue to confirm high-grade silver-copper-zinc mineralization at Salamandra in a metals-rich, multi-stage system with significant size potential.

Table 1: MAG Salamandra Phase 1 Drill Program Assay Results

Hole
From
To
Interval
Au
Ag
Ag
Cu
Zn
Pb
Number
(metres)
(metres)
(metres)
(g/t)
(g/t)
(opt)
(%)
(%)
(%)
SA13-13
20.65
830.81
810.16
0.01
2
0.05
0
0.6
0
SA13-13
288.63
351.87
63.24
0.00
2
0.05
0
1.6
0
SA13-13
455.89
465.67
9.78
0.05
0
0.01
0
2.6
0
SA13-13
483.45
491.85
8.40
0.01
0
0.01
0
1.7
0
SA13-13
637.50
669.22
31.72
0.00
1
0.04
0.1
3.6
0
SA13-13
641.08
658.80
17.72
0.00
2
0.05
0.1
5.0
0
SA13-13
681.48
691.57
10.09
0.03
1
0.04
0.1
1.8
0
SA14-14
146.30
152.18
5.88
0.00
3
0.08
0
1.7
0
SA14-14
165.99
182.88
16.89
0.01
29
0.84
0
1.8
0.2
SA14-14
182.40
182.88
0.48
0.04
197
5.75
0.4
1.1
0.6
SA14-14
184.78
185.28
0.50
0.01
53
1.55
0.1
0.5
0.9
SA14-14
186.38
186.80
0.42
0.07
108
3.15
0.5
0.6
1.4
SA14-15
605.74
613.63
7.89
0.08
166
4.86
1.2
1.2
0.6
SA14-15
607.50
609.80
2.30
0.25
393
11.45
3.6
2.8
0.4
SA14-16
6.52
58.11
51.59
0.00
3
0.09
0
0.4
0
SA14-16
89.10
102.61
13.51
0.00
12
0.36
0
0.4
0
SA14-17
171.45
176.58
5.13
0.00
10
0.30
0
1.2
0.3


MAG Salamandra Phase 1 Drill Program Map

MAG Salamandra Phase 1 Drill Program Map