In September 2009 Horizonte signed an Exploration Alliance agreement with AngloGold Ashanti Limited. Under the agreement AngloGold has funded two years of project generation exploration expenditure, undertaken and managed by Horizonte.
AngloGold funded Year 1 exploration and as planned in September 2010, elected to move into funding the second year, initially up to a further US$600,000. AngloGold may also elect to fund an additional US$3 million over the third year. All expenditure has and will be in accordance with programmes and budgets prepared by Horizonte and approved by AngloGold.
On completion of the three year expenditure programme each property or properties comprising a target area will be subject to a separate joint venture (each a ‘Target Area JV’), with the ownership interests in each such Target Area JV apportioned 51% to AngloGold and 49% to Horizonte. AngloGold may elect, in its absolute discretion, to earn up to an additional 19% (70% total) in a Target Area JV by funding ongoing exploration expenditure to complete a Pre-Feasibility Study in any Target Area JV within three years from that vesting date.
To mid-2011 a total of approximately 900,000 ha (9,000 sq km) has been sampled, comprising a total of 1,266 stream sediment samples and 1,447 rock geochemical samples. Integration of structure, known geology and occurrences, with an open view on geological models and the potential styles of mineralisation is a key component to success in this programme.
Highlights are:
These three previously unknown targets are examples of the types of anomalies being defined.
Falcao Joint Venture with AngloGold Ashanti
The Falcao project is located 175 km south of the Tangara project. Falcao was a BHP grassroots discovery identified by regional stream sediment sampling. The anomaly consists of multiple sample locations running anomalous gold, copper and silver values, within a 50 sq km zone. The stream sediment programme was followed-up by a regional soil grid and shallow auger drill programme on an 800m by 200m grid which defined the main area of interest as an open 6 km long anomalous gold/copper and zinc/silver/gold zone.
Limited wide spaced reverse circulation ('RC') drilling campaign was undertaken which yielded intersections including 9m at 4.8g/t gold from surface, 3m at 4g/t gold from 57m, and 24m at 0.5g/t gold including 3m at 2.8g/t gold. This latter result was from a hole which was drilled outside the main soil geochemical anomaly.
An extensive geochemical sampling and mapping programme has been completed, together with an aeromagnetic / radiometric survey. In July 2011 Horizonte commenced a 3,000m diamond drilling programme at Falcao in conjunction with its JV partner AngloGold, with a view to testing the gold soil anomaly which is currently 4km long and is open to the east. The soil anomaly varies from 200m to 800m in width. Ten drill holes were planned in the first phase to test several target structures. These ten holes will cover a strike length of 4,700m with 700m between holes or fences with the diamond drill holes planned to go to a depth of between 200m and 350m. The interpretation of the detailed aerogeophysics and multi-element soil geochemistry was instrumental in placing the drill holes. The results from this drilling programme will provide further indications to the economic prospectivity of the project.
Tangara Joint Venture with Troy Resources
Tangara is located within the Carajás Mineral Province, covering 36,395 hectares including a 32 km long greenstone belt of Archean aged terrain.
Horizonte signed a formal Option Agreement with Troy Resources (ASX:TRY) (‘Troy’) in December 2007 to operate and develop the Tangara Gold Project and fast track its development entitling Troy to 100% interest in the Tangara project. To maintain the option Troy has made cash payments totalling US$400,000 to Horizonte and invested US$2 million in exploration on the project. To exercise Troy would make a further payment of US$2 million to the Company. Troy would then make a production royalty payment to Horizonte of US$30 for every ounce of gold produced from the Tangara project area up to a maximum of 500,000oz. In the event of more than 500,000oz being produced, a 1% Net Smelter Royalty (‘NSR’) shall apply. This royalty will increase to 2% NSR in the event of production exceeding 1 million oz.
In the northern part of the JV area the focus was on the preparation of the Final Exploration Report as a prelude to a Mining Licence Application on part of the 100 sq km exploration license covering the Malvinas Trend, the central part of which is characterised by a 2.5 km long zone formed by two major trends where soil samples values range from +0.25g/t to 2.4g/t gold. The first trend is over 1,600m long and is 100m to 300m wide while the second trend is 600m long and 300m wide. Both trends are associated with numerous multi-gram rock sample gold results, the best of which in geological terms, are related to a massive pyrite, sericite, quartz gossan which has returned assays of up to 14.8g/t gold in rock chips.
Troy has also carried out extensive exploration and limited drilling on the Rio Maria West area where exploration outlined 4 east-west trending shear zones that host a series of old workings, anomalous quartz vein grab samples and gold in-soil anomalism. The bedrock geology comprises mafic metavolcanic rocks with a small contribution of ultramafic metavolcanics, felsic intrusive and metasediments. The quartz veins strike N260°E-N280°E and are hosted by silicified and sericite altered basalts and metasediments. The host rocks are intensively sheared with late faulting associated with thrusting. Artisanal gold workings located within the Rio Maria West shear trend have yielded rock grab samples from float and outcropping veins with values up to 36.75g/t. South of the main trend another anomalous zone was defined over 1600m with four zones over 100ppb and a maximum of 811ppb in the soils. Rock chips yielded up to 2.2g/t gold.
The Board considers the JV with Troy as a good strategic transaction for the Company. Troy has spent over US$2.5M in exploration expenditure in the JV areas and is maintaining the areas in good standing.
Since late 2008 Troy has been in production at its Andorinhas gold mine located approximately 18 km to the south of the Tangara project. Mining of the open pit ore from the Lagoa Seca open cut pit was completed in November 2008 and current ore production is dominantly from the underground mining of the Mamao deposit. It is highly probable that any resources defined on the Tangara project will be treated at the Andorinas plant, producing mid-term cash flow for the Company.
