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Ejutla Project

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Key Facts

Location: Oaxaca, Mexico

Ownership: 100%

Land Position: 10,603 hectares

Status: Exploration

Metals: Gold, Silver

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2017 Outlook

Ejutla is an exploration-stage property located at the southern end of Mexico’s low-sulphidation epithermal precious and base metal belt. Three extensive northwest-trending mineralized structural corridors on the property will be the key focus of Alio Gold’s exploration activities.

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Details

A technical report on the property can be found here.

Location

The Ejutla property is located in Oaxaca State, Mexico, approximately 45 km south of the capital city of Oaxaca de Juarez. Access from the capital is via Highway 175 for 32 km to the town of Ocotlán de Morelos, then east for 25 km along a paved road to the town of San Nicholas Yaxe. From Yaxe, a secondary dirt road leads south for approximately two km to the northern boundary of the concession. This road continues south to access a network of dirt roads to other parts of the concession.

History

Ejutla lies within the Taviche Mining District of the Central Oaxaca Valley. Gold and silver were discovered in the late 1500s during Spanish colonial era. Taviche was one of Mexico’s most important gold producing districts prior to the mines closing from 1913 to 1936 during the Mexican revolution. Intermittent production since that time has continued to present day.

Modern exploration of the Taviche Mining District got underway in the 1990’s following changes to Mexican foreign ownership and mining laws. Studies to evaluate the district have been undertaken by several Canadian mining companies. Whether any of this work included investigation within the boundaries of the Ejutla Property is not known.

The Ejutla property was staked in 2006 by Minera Aurea, SA de CV, the wholly owned Mexican subsidiary of Aurea Mining Inc. (“Aurea”). Aurea explored the property from 2009 to 2014, discovering three prospective structural corridors that host low-sulphidation epithermal veins with anomalous gold and silver.

Small-scale historic mine workings suggest limited production may have occurred on the property.

Aurea was acquired by Newstrike Capital Inc. in June 2008. Newstrike Capital Inc. was subsequently acquired by Alio Gold (formerly Timmins Gold Corp) in May 2015 and is now a wholly owned subsidiary of Alio Gold.

Geology and Mineralization

The Taviche Mining District is underlain by the Central Valley assemblage, which unconformably overlies Precambrian granulite-facies metamorphic rocks belonging to the Oaxaca Basement Complex. The Oaxaca Basement Complex is sub-divided into distinct tectono-stratigraphic terrains or crustal blocks, two of which underlie the Central Valley: the Zapoteco and the Cuicateco sub-terrains. The principal mineral deposits of the Taviche Mining District are hosted by basement rocks of the Zapoteco Sub-Terrain, with the exception of the Cobre Grande deposit, which is hosted by the Cuicateco Sub-Terrain. The Ejutla Property is located near the proposed boundary between both basement sub-terrains. Most of the important mineralization discovered to date within the Taviche Mining District falls within a well-defined northwest trending structural corridor termed the Taviche Structural Zone.

The Ejutla property is underlain by a sequence of Early Tertiary(?) intermediate and felsic volcanic and volcaniclastic rocks that unconformably overlie Cretaceous(?) limestone. The volcanics have been locally intruded by younger Tertiary(?) granitic and rhyolitic stocks and dikes. Rocks belonging to the Oaxaca Basement Complex do not outcrop on the property.

Three northwest-trending mineralized structural corridors known as Las Casas, Duraznillo and Totolapam have been identified at Ejutla. The primary faults within these corridors were intruded by later felsic and occasionally andesite dikes and by small stocks. These strike-slip and dip-slip fault structures were subsequently, or possibly contemporaneously, conduits for the hydrothermal fluids that infilled the structures with quartz and quartz-carbonate vein systems. The dikes are close spatial relationship with the locations of the veins and are sometimes crosscut by them and are typically moderately to strongly argillic (clay) altered and pervasively silicified, often occurring with strong iron-stained breccia with a localized disseminated pyrite (up to 5%). Within these structural corridors, almost all mineralized structures and in-filling veins strike N25-65°W and dip steeply to the east. The corridors are relatively large, extending from three to eight km in strike length and 750 m to three km in width, and parallel the trend of the regionally significant Taviche Structural Zone.

Silver-gold mineralization is primarily associated with quartz and quartz-carbonate veining with trace amounts of pyrite +/- arsenopyrite, stibnite and pyrargyrite. The mineralized vein systems occur as parallel, sub-parallel and anastomosing quartz and quartz-carbonate veins and proximal stockwork zones, which vary individually from a few centimetres to several tens of metres in width. These vein systems crosscut all observed stratigraphy on the property. The textural, compositional, style of mineralization and its geochemical signature indicate a high paleo-level exposure within a low sulphidation epithermal system, suggesting the potential for lode-type mineralization to be preserved on the property.

Exploration

Las Casas Structural Corridor

Located on the western part of the property, the Las Casas Structural Corridor has been the main focus of previous exploration. It is the largest mineralized corridor on the property as currently defined, extending northwesterly at least eight km from the southern property boundary and averages three km wide. Two main vein systems have been recognized within the corridor, the Mezcalera-Loma del Horno and the Jarillas vein systems, each comprising several individual prospective veins. Aurea’s exploration programs included regional and detailed mapping, prospecting, geochemical and stream sediment sampling and magnetic and Induced Polarization (“IP”) geophysical surveys, advancing some targets to drill-ready stage. Further geologic mapping, geochemical sampling and expanded geophysical surveys have been recommended to fully evaluate all known and possible mineralized targets.

Duraznillo Structural Corridor

The parallel Duraznillo structural corridor is located in the central portion of the property approximately five km east of Las Casas. As defined to date, Duraznillo is a discontinuous northwesterly trend of veins that extends from the southern property boundary for three km and varies from 750 m to 1.5 km wide. The Duraznillo corridor includes the Duraznillo and La Llorona veins that remain to be fully evaluated. Further geologic mapping, sampling, trenching and preliminary magnetic and IP geophysics have been recommended to define drill targets.

Totolapam Structural Corridor

The Totolapam Structural Corridor is located near the eastern property boundary. Little work has been done to define and evaluate this system, which primarily hosts narrow veins within felsic dikes. A program of geologic mapping, sampling, trenching and preliminary magnetic and IP geophysics have been recommended to define drill targets.