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Sesmarias Step Out Drilling Successful So Far For Avrupa Minerals

ID: 1547727
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(PresseBox) - It took Avrupa Minerals (AVU.V) a few weeks longer than anticipated to release the first drill results of the Q4 2018 program on the Sesmarias project, part of their Alvalade license located in Portugal, as bringing good news right before PDAC usually generates healthy attention, but the numbers came out pretty interesting anyway in my view. The self-funded 2018 drill program appears to be a real eye-opener for management, as the recently completed 2,498 meters of drilling (6 holes) not only changed their insights on the position of the mineralized lenses discovered so far, but also showed other potentially mineralized structures by intercepting stockwork besides lenses. Step-out drilling of the known 10 Lens is also going according to plan, adding decent tonnage rapidly. Here is an overview of the identified mineralized envelopes/zones at Sesmarias:

The 10 Horizon as defined on this map from the February 11, 2019 news release has been promoted to the 10 Lens now, as sufficient drill results have been obtained so far. Management also provided investors with a schematic long section in the same news release, which is a conceptual drawing of geology and mineralized bodies:

Highlights from the program include the following results according to the latest March 11, 2019 news release:

SES026 intercepted 28.95 meters of 0.48% copper, 0.77 g/t gold, 15.7 ppm silver, 0.52% lead and 1.31% zinc, and extended the 10 Lens by 300 meters to the north from previous drilling.

It is also in line with the average grade of 1.5-1.7% CuEq management is looking for when building tonnage for an eventual deposit at Sesmarias.

The 10 Lens is now at 600 meters x 300 meters x 25 meters. Mise-

These dimensions generate 4.5M cubic meters, which in turn result into 18Mt, when using a conservative gravity of 4t/cubic meter (m3). Average gravity is estimated by management to be ranging from 4 to 4.4t/m3. Using a midpoint would render 18.9Mt. It is interesting to see that the follow-up downhole survey (MALM) detected a further 150m extension, which hypothetically could bring in another 4Mt if continuous. The minimum economic tonnage target of management is 25Mt, so things are progressing quite nicely so far.



Discovered a possible new mineralized horizon in SES026, located above the 10 Lens, and intersected it again in SES027 and SES029.

No economic mineralization has been hit there yet, but according to management the drill bit did hit sulfides, so there could be a mineralized envelope very close by. Holes SES026, SES027, and SES029 intersected more specifically a horizon of stockwork quartz-sulfide veining located 20-40 meters above the 10 lens.

SES028 intercepted the edge of a significant feeder zone stockwork beneath the 8 Lens.

These assays looked like this, and management interprets them as strong indicators for more mineralization in the direct vicinity, and might be the possible edge of a feeder zone for the previously discovered 8 Lens

Confirmed that the high grade 2 Lens is a fault-bounded fragment of massive sulfide mineralization with origin yet to be determined. Hole SES003, drilled previously on this target, is now also being assayed and will be reported shortly.

Hole SES003 is located very close to SES002, which showed 10.85 meters (at) 1.81% Cu; 75.27 ppm Ag; 2.57% Pb; 4.38% Zn; 0.13% Sn, which is not bad as the average copper equivalent grade is 4.97% CuEq, however the volume of the 2 Lens is still too small to be economic as an underground orebody at some distance of the 10 Lens and 26 Horizon.

Continued re-logging of historic drill holes has upgraded targets in the northern portions of the Sesmarias Prospect.

Each hole drilled in this exploration phase of the Project has enhanced the revamping of the exploration model.

I will elaborate more on this in a second. First, according to management, the mineralization is open to the east boundary fault (see 3D model below in blue) and to the west intersection of the Devonian host rocks and the Tertiary gravels.

By revamping the exploration model, management means to describe that the current drill results had a profound impact on the understanding of the structural geology of Sesmarias. It appeared that the stratigraphy (complex of layers), especially the orientation of the various layers and mineralized zones, was different from previously understood. As Sesmarias has a pretty complex geology, with lots of faults, folds and potentially folded folds, it was hard to determine the structural controls of any mineralized zone perpendicular on the strike directions. According to the geologists, this area has been deformed several times in the past 360 million years, so this makes determining the linears (directions in different dimensions) very difficult at times.

As it turned out, the orientation of the discovered lenses changed from predominantly sub-vertical to relatively horizontal because of new insights. I wondered how this process actually materialized for the geologists, and had a few follow-up questions as well. Fortunately management went out of their way to provide me with pretty extensive answers and explanations, to make sure yours truly, but also the audience would understand what the exploration program at Sesmarias is all about. Here we go:

?The change in ?attitude? (orientation!) came about because we stepped away from the details of rock layers and re-grouped layers into packages of layers with similar characteristics.tributes (meaning more abstract comprehensions like axis or intersections). Basically we probably could not see the forest for the trees.

So, by following these packages from hole to hole, we (mostly meaning our geo Josh Coder) began to build a geological model using a 3D modeling program called GeoReka.Fault does not run in a straight line, so this is a bit of a complication, but we do know now why some of our holes drilled with both Antofagasta and Colt (previous JV partners) did not hit mineralization.

For now, this fault is limiting mineralization on its west side.

As hole SES014 is located quite a bit to the east and away from the big fault, I was wondering why management thought there could be mineralization present, also considering the different rock types over there which usually don?t contain mineralization based on earlier results, despite all potential vertical and lateral displacements. They had this to say:

?When talking about having more chance to the east, we meant just across the fault.

Again as a reminder, Sesmarias contains a large amount of faults and off-setting structures, constructing an interesting puzzle from a geological standpoint.

Management elaborates further on their exploration plan:

?The re-interpretation of the orientation of layers gives us a lot of license to re-orient the mineralization, as it is basically just another bed/layer.

So we estimate a potential strike length of somewhere between 600 and 900 meters of massive sulfide mineralization, which stops somewhere between holes 26 and 27.

Therefore I view this adjusted orientation as a positive, as it saves drilling budget. On my question if cross sections could be provided anytime soon, management answered they needed some more drilling in order to get sufficient understanding of continuity. They added:

?Right now, 2, 8, and 26 are more horizons than actual masses, and presumably smaller than the 10 Lens.nsion of the 10 Lens, because it is roughly at same depth, and horizontal displacement of surrounding packages through faults checks out with this concept. Horizon 8 could have its own feeder source as it is on the other side of this basalt dome, as both Horizon 8 and the 10 Lens are roughly paralle

Looking at the schematic long section again, I noticed that 025 and 027 missed the massive sulphide lenses. It made me wonder if by more vertical faulting/displacements there could be (off set) extensions of the lenses/horizons, or these basalt domes could be structurally consistent and not broken up/displaced by faults, limiting mineralized potential in these areas except for stockwork (027)? To what extent could this stockwork be useful/economic?

?SES025 ?hit? the 2 Lens at predicted depth, but it was very thin (<10 cm).

There is still plenty of opportunity for faulting to displace/move/disrupt/extend the mineral potential.

For a number of years, back in the 1990?s I believe, a large stockwork zone at the Rio Tinto Mine in Spain was mined for its gold.an example, I understand that some of the stockwork zones can be much higher grade in base metals, but perhaps there is more waste rock.?

For now it the stockwork mineralization doesn?t generate economic results, but it is still early days of course. On a different note, to me the targets between Lousal and Caveira have always been very interesting as well, as the historic resource of Lousal seems an easy target. I initially thought of the Lousal historic resource as a relatively advanced project, which might be relatively easy to prove up by 15-30% verification drilling (depending on quality of historic drill data of course) to get it to 43-101. Management had this to say about this topic:

?Lousal is an interesting target for sure.

After this little Q&A on geology, I wanted to know a bit more about their exploration plans. Therefore I wanted to know how many meters they are going to drill at Sesmarias in how many holes at what drilling cost per meter all-in, when this will start and if they have schematic sections of the old Lousal resource and the other targets based on historic drilling. Besides this, I was also curious about their drilling strategy if they could or would like to share. Here is their answer:

?Ideally, we would like to see minimum 10,000 meters per year for the next 2-3 years once our next level of license is approved.

Then there is the Caveira Mine area, and at least a half dozen other mineral targets that we know about already on the trend from Caveira to Aldeia dos Elvas at the southwest corner of the license.

This wraps up my little interview with management as part of this update. According to their estimates, they ideally would like to spend about US$3-4M annually on Alvalade, but as I view it, Avrupa is already on its way to their minimum economic threshold of 25Mt (at)1.5-1.7% CuEq just based on the results for the 10 Lens. This means with a few more good step out results they could already have a 100% owned, economic project on their hands without even tapping into JV partners, and as soon as the markets become (more) aware of this, there might very well be a share price re-rating around the corner, and further capital raises could be done at lower dilution levels in that case. With copper and zinc prices picking up again and both with good fundamentals, the Avrupa Minerals story should be able to attract more attention this year.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, and follow me on Seekingalpha.com, in order to get an email notice of my new articles soon after they are published.

Disclaimer:

The author is not a registered investment advisor, and currently has a long position in this stock. Avrupa Minerals is a sponsoring company. All facts are to be checked by the reader. For more information go to www.avrupaminerals.com and read the company?s profile andors prior to making any investment decisions.



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published by: PresseBox
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Date: 03/18/2019 - 08:44
Language: English
News-ID 1547727
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