Cuance-Los Hojanchos Joint Venture

overview

Perilya is actively exploring the Cuance and Los Hojanchos Concessions for copper/gold massive sulphide and epithermal deposits within the Los Ranchos and Maimón Formations, with the goal of providing additional ore for the nearby Cerro de Maimón operation. Exploration is funded by Perilya's joint venture partner, Everton Resources Inc., which will earn an interest of 50% on expenditure of $1.17 million by July 31 2009. Everton may earn an additional 20% by funding a feasibility study to bring the project into production. Perilya is the operator of the Cuance-Los Hojanchos joint venture.

project highlights

• Cuance and Los Hojanchos Concessions cover 4,340 hectares of the Los Ranchos Formation, which hosts the Pueblo Viejo gold property of Barrick Gold and Goldcorp Inc.
• Semi-massive to disseminated sulfide mineralisation identified at Loma Lambedera including 15 meters at 1.22 grams per tonne gold, 2.84 grams per tonne silver, 0.35% copper and 2.42% zinc.
• A number of geochemical and geophysical anomalies to be tested.

location and access

The Cuance and adjacent Los Hojanchos Concessions lie 25 kilometers east of the town of Maimón, and about 10 kilometers southeast of the Cerro de Maimón copper/gold mine. Both concessions are accessible by secondary roads from the Santo Domingo-Monte Cristi highway.

geology and mineralisation

The Cuance and Los Hojanchos Concessions properties lie at the western margin of the Los Ranchos Formation, part of the Early Cretaceous Caribbean volcanic island arc sequence which has been overthrust by volcanic units of the Maimón Formation. The main rock unit of the Los ranchos Formation in the area consists of amygdaloidal basalt with local pillow features. The Maimón Formation in the area is composed of bimodal volcanic rocks. Several small dioritic plugs intrude the basalt along the southern edge of the concessions. Low-grade metamorphism attributed to seawater hydrothermal systems is overprinted by extensive zones of argillic alteration and silicification. Extensive zones of argillic alteration and silicification affect the central part of both concessions (see geological map). Pueblo Viejo is located 7 kilometers to the north of the Cuance Concession.

exploration targets

The primary exploration targets are massive sulphide and epithermal deposits within the Los Ranchos and Maimón Formations on the Cuance Concession. Detailed mapping and sampling on the Cuance-Los Hojanchos Joint Venture Concessions has identified a series of "kill zones" where the lack of vegetation results from high sulfide levels in the soils and indicates the presence of sulfide minerals in the underlying rock units. These zones are coincident with propyllitic and argillic alteration, and massive to semi-massive bands of sulfide mineralisation seen in road cuts and stream profiles.

A number of ground geophysical surveys have been carried out across these anomalous zones in order to prioritize drill targets. Most of the area of the concessions has been covered by regular soil geochemistry grids.

Two areas have been drilled on the Cuance Concession:

• A volcanogenic massive sulphide target, known as Tres Bocas, located immediately to the south of the Loma el Mate massive sulphide mineralisation on property in joint venture between by Linear Gold Corporation and Everton Resources.
• The Loma Lambedera discovery, located 2.25 kilometers to the south of Tres Bocas, where drilling intercepted 15 meters at a grade of 1.22 grams per tonne gold, 2.84 grams per tonne silver, 0.35% copper and 2.42% zinc.

A detailed petrography study completed on samples from Loma Lambedera indicates that mineralisation represents volcanic massive sulphide stringer phases, leaving an open target for massive mineralisation in the vicinity of the drilled area.

Two previous drilling programs in 1999 and 2004 targeted geophysical anomalies identified from ground induced polarisation and resistivity surveys across the northern part of the Los Hojanchos Concession. Short intervals of copper mineralisation were intercepted (up to 1.5 meters grading 1.58% copper) and minor gold mineralisation. In light of the favourable exploration results on the Cuance Concession, activity is limited on the Los Hojanchos Concession.