Cascadero's 50% owned Argentine subsidiary Salta Exploraciones S.A. (Salta), signed a 4,200 metre drill contract to further explore two of three closely spaced Cu-Mo-Au porphyry prospects in the Pancho Arias Mineral District, Salta province, northwestern Argentina. The contract is unique in attempt to mitigate Company risk with respect to standby charges, productivity issues and other discretionary service fees. The Contractor supplies the drill, drill crews, camp infrastructure, catering service, fuel, water, core boxes and other services related to the drilling operation. Road building, pad construction and managing local labour are also included as Contractor obligations. The Company is responsible for Community Relations, food supply to the catering service and permitting. The contract spirit attempts to arrive at a mutually agreeable all-in charge per metre. The order of scheduled drilling is:
Pancho Arias is a Cu-Mo deposit and is the most northerly of the three Pancho Arias Mineral District porphyry prospects. In the 1970s, Pancho was subject to a widely spaced 10-core hole program in mineralized outcrop over an area of 1,000 metres east west by 1,400 metres north south. Nine of the ten core holes encountered copper-moly mineralization from surface to total depth and each ended in mineralization. The tenth and last drill hole encountered copper from surface to total depth and ended in mineralization. The drill holes were not assayed for gold. Property investigations occurred in the 1990s by several workers, which included geological mapping, historic data analyses, re-assay of available drill pulps and surface outcrop geochemistry. No drilling was initiated. In 2011, Salta acquired the exclusive right to purchase a 100% interest in the 300 hectare property, including 100% of the NSR.
Salta has completed IP/Res/Mag geophysics, geological with alteration mapping and property-scale outcrop geochemistry. The outcrop geochemistry and alteration studies clearly identify mineral and alteration assemblages characteristic of known Cu-Mo-Au porphyry systems. Copper, moly and gold values are present in anomalous-to-elevated values in rock outcrop samples in an area 1,600 metres east west by 2,100 metres north south. The geochemical anomaly is coincident with an underlying chargeability and resistivity anomaly. About 60% of the 4,200 metre drill program is allocated to six core holes on Pancho Arias porphyry.
The first 2012 Pancho drill hole is positioned at the site of the 1973 core hole (P4-73), which is a 128-metre vertical BQ core hole that encountered a ~50-metre interval of supergene copper (chalcocite) and primary molybdenite within a broader envelop of Cu-Mo mineralization. From this location, Salta plans a 400-metre core hole dipping at -50o at a 40o azimuth to test a highly prospective area of alteration and leaching proximal to the potassic core, which is also an area of high-moly values in outcrop. This area is expected to host good grades of copper and molybdenum. Drill holes PA-12-02 through PA-12-06 are designed to provide deeper and broader tests in areas proximal to zones of known Cu-Mo mineralization with Au values in surface outcrops.
The assay and alteration data from this 6-hole program, when complied with the historic data, may form the basis of a preliminary Pancho mineralized resource.
Incahuasi is the most southerly of the three Pancho Arias porphyries and is about 13 kms southwest of Pancho Arias. The showing is located in an east west trending valley and the target porphyry body is overlain by a veneer of unconsolidated sediments.The outcrops in the Incahuasi pediment area display mineralization and alteration assemblages characteristic of mineralized porphyry systems. There are several areas of copper, gold, silver and molybdenum mineralized quartz veins and stockwork that surround the pediment. These veins and stockwork may represent leakage from a buried Cu-Mo-Au porphyry system. The property is 100% owned by Salta and consists of two claim blocks aggregating 4,984 hectares acquired by staking between 2005 and 2008.
In late 2010, an IP/Res/Mag survey was conducted on the Incahuasi prospect. The ground magnetic data define a large, broad magnetic-low measuring over 3,000 metres in diameter. This magnetic-low is associated with the strong linear chargeability anomaly with proximal resistivities that supports the presence of a large hydrothermal alteration system that conforms to an east west trending local fault system.
In 2011, Salta completed an Mobile Metal Ion (MMI) geochemical program in the pediment in the area of the geophysical anomaly. The main commodity element response is a multi-metal and multi-sample response that is both focused and low-to-high contrast. This anomaly occurs in one main area of the sampling grid, a northeast zone of Cu-Ag-Au with long axis dimensions greater than 750 metres. This MMI anomaly remains open to the northeast, which is part of the 3,600 metre IP/Res/Mag geophysical anomaly, which is also open to the east and west.
The copper-gold-silver MMI anomaly is closely associated and overlaps a lead-zinc MMI anomaly. This pattern is interpreted as bedrock-hosted metal zonation, which is a pattern expected from metal deposition in an evolving hydrothermal system. The magnitude of the commodity element response is generally low-to-moderate contrast, which is consistent with disseminated-style, bulk minable mineralization. About 40% of the 4,200 metre drill program is allocated to Incahuasi for four-to-six core holes. This is the first drilling conducted at Incahuasi.
Las Burras is the third porphyry showing in the district. It is located between Pancho Arias and Incahuasi on the same regional north trending fault that intersects a north west trending local fault.The property is 100% owned by Salta and consists of two claim blocks aggregating 4,693 hectares, which were acquired by staking between 2005 and 2008.
In May, 2011, Salta drilled an east to west cross section consisting of four core holes at about 200-metre spacing to test the northern part of the large-scale Las Burras coincident IP/Res/Mag geophysical and MMI geochemical anomaly. Each of the four drill holes encountered Cu-Mo-Au mineralization in granodiorite from surface to total depth. The Las Burras discovery hole is LB11-03, which is located in the central part of the cross section. It assayed 0.42% copper, 0.02% moly and 0.10 g/t gold from surface to 120 metres, followed by lower values Cu-Mo-Au mineralization to 300 metres. All holes ended in mineralization.
The infrastructure of the Pancho Arias Mineral District is excellent. It has a railway that connects it to the Pacific Ocean Port of Antofagasta, a nearby high-tension power line, road access by National Highway 51 networked with local improved gravel roads and surface fresh water. The three porphyries are closely spaced, The three showings are closely spaced and are believed to have a common Middle Miocene magmatic origin as they are within a larger metamorphic envelop. Each has potential to host a mid-to-large tonnage Cu-Mo-Au deposit.
The proximity of the showings, the combined potential tonnage, the potential for good grades and the excellent infrastructure provides exceptional discovery leverage to the Company.
Chief Executive Officer