Previous owner Breakwater Resources Ltd. was acquired by Nyrstar N.V. in a friendly, $663 million all-cash take over in August 2011. Previous mapping and sampling identified anomalous Cu-Zn VMS style mineralization and alteration on the property. Several untested airborne input geophysical anomalies within the favorable felsic volcanic rocks are coincident with anomalous base metal values that have been returned in surface sampling. Chip sample results elsewhere in the region returned values up to 1.56% Cu, 17.2 g/t Ag over 14 meters.
The Project lies to the northwest of and borders the La Calavera and Cobre Grande copper-gold porphyry-skarn projects in east-central Oaxaca. It also lies to the north of the WNW-ESE San José structural zone defined by Gold Resource Corporation The Project is hosted by caldera-related Tertiary volcanic rocks (e.g. El Aguila model) crosscut by hydrothermal veining inferred to be related to late- stage granitic magmatism locally exposed as dikes and underlying the adjacent ‘Nueve Puntos’ mountain.
The 2006 Drill program by Megastar, which consisted of five diamond drill holes for a total of 1,545.7 metres, resulted in discovery of significant intersection of a massive Sulfide environment. Drilling tested coincident Magnetic, DeepEM conductors and favorable geology. Dr. Mathieu PichÃ¨, Ph. D, Geo. an independent qualified person, completed the core logging and sampling as well as the assessment report. All EM conductors are explained; while no economic Au, Ag, Cu or Zn mineralization was found in the assayed samples, local anomalous values correspond to the geochemical alteration. Geochemical data was used by Dr. PichÃ¨ to characterize the rock types as well as their alteration type and intensity.
The whole rock analyses show Na2O depletion in the footwall. Several samples have strong K2O enrichment within the hanging wall, which is typically seen associated with many Abitibi VMS Deposits. In addition, DDH MAR-06-01 crossed a significant zone of sericitized rhyolite, also considered a key element in VMS exploration. The company has therefore added a total of 17 claims to the east of this hole where the strong sericite alteration potentially intensifies. Dr. PichÃ¨ states that The Ralleau Property rocks could therefore have been affected by carbonate, K feldspar and sericite minerals dominated alterations. Such alterations affecting intermediate to felsic calc-alkaline volcanic rocks is found in the host rocks of the Selbaie VMS to epithermal base metals deposit of Quebec, northwestern portion of the Abitibi Greenstone Belt (PichÃ¨, in press.). It is also a major feature of Mattabi type VMS deposits (Morton and Franklin, 1987).
From 2006 to 2010, the Company has completed the following exploration work in a number of successive programs:
75km of linecut grid
Ground magnetic and deep EM surveys
1,545.7 meters (5 holes) of diamond drilling
Trenching and channel sampling
1,457 line km of helicopter-borne VTEM Survey spaced at 75meter intervals and which identified a total of forty nine (49) anomalies of which eight (8) were classified as Priority One
Preliminary ground-proofing of VTEM anomalies together with minor mapping and prospecting
The Ralleau Property comprises 59 contiguous mineral claims covering 3,323.85 hectares.
On February 28, 2011 the Company announced receipt of NI 43-101 compliant technical report summarizing the results of work to date on the Ralleau Project from MRB & Associates of Val-d'Or, Quebec. MRB's report recommends a two-phase $1.75M exploration program consisting of further target delineation and definition, followed by diamond drilling. The Company is assessing its options and the property and seeking joint venture opportunities.
On July 10, 2015 the Company received a NI 43-101 compliant technical report summarizing the results of the 2014/2015-field work program on the Ralleau Property from Roger Moar, B.Sc., OGQ (No 733). Mr. Moar was retained to conduct a geological mapping and a lithogeochemical sampling program on the Ralleau property.
The NI 43-101 technical report recommends further, 3 - Phase, $388,765 work program as follows:
Phase I ($45,580) - To extend the lithogeochemical and mapping program over the eastern portion of the Ralleau property covering an area approximately 8 km2. It is also recommended to include immobile incompatible elements (Zr, Y, Nb and REE (Rare Earth Elements) in the analytical data in order to establish geochemical affinities and define precursor volcanic rock type. These elements are generally considered immobile during hydrothermal alteration and metamorphism. The objective of Phase I will be to delineate prospective alteration zones associated with electromagnetic anomalies outlined by the helicopter-borne VTEM survey.
Phase II ($66,220) - Based on positive results generated from the Phase I, a Pulse-EM survey is recommended as follow-up to the lithogeochemical sampling program.
Phase III ($276,965) - The third phase of the proposed exploration program is conditional on positive results generated from Phase II. It comprises a 1 500 m diamond-drilling program to test high-priority targets delineated by the Pulse-EM survey.
On April 5, 2017, the Company entered into an option agreement with Deeprock Minerals Inc. (“optionee”) on the Company’s wholly-owned Ralleau Property. Under the terms of the option agreement, the optionee will be deemed to have exercised its option to acquire a 50% interest in the property by cash payments of $100,000, issuance of 750,000 common shares, and incurring Exploration Expenditures of $250,000.
On September 11, 2017, the optionee changed its share capital structure by 1:2 forward split. Consequently, the 750,000 common shares to be issued to the Company will be prorated proportionally, aligning with the split.
On March 15, 2018, the Company and the optionee amended the terms of the option agreement for the Ralleau Property. Under the amended agreement, the Company will receive 1,700,000 post-split (850,000 pre-split) common shares instead of 1,500,000 post-split (750,000 pre-split) common shares.
On June 30, 2018, the Company and the optionee entered the second amendment agreement to amend the terms of the option agreement for the Ralleau Property. Under the second amended agreement, the Company will receive 600,000 post-split common shares, which is due on the earlier of August 31, 2018 and the date the optionee’s common shares are listed and begin trading on the Canadian Securities Exchange (“exchange listing date”). Moreover, the total exploration expenditure of $25,000 is due on or before October 31, 2018 in lieu of June 15, 2018 under the first amended agreement.
As a result of the amendments, the optionee is required to fulfill the following terms:
a) Cash payment of $100,000 and issuance of 1,700,000 post-split common shares as follows:
i. $5,000 (paid) on or before the execution of this agreement;
ii. $5,000 and 600,000 post-split (300,000 pre-split) common shares on or before the exchange listing date;
iii. $5,000 (paid) and 200,000 post-split (100,000 pre-split) common shares (issued 200,000 shares on April 9, 2018 at a fair value of $0.0375 per share) on or before the first anniversary date of this agreement;
iv. $10,000 and 400,000 (200,000 pre-split) common shares on or before the second anniversary date of this agreement; v. $75,000 and 500,000 (250,000 pre-split) common shares on or before the third anniversary date of this agreement.
(b) Exploration expenditures of $250,000 on the Property as follows:
i. $40,000 on or before May 30, 2017 (incurred);
ii. $15,000 on or before July 31, 2017 (incurred);
iii. $25,000 on or before October 31, 2018;
iv. $50,000 on or before the second anniversary date of this agreement;
v. $120,000 on or before the third anniversary date of this agreement.
An emerging resource company engaged in the acquisition, exploration and development of mineral properties. Megastar owns gold and base metal properties in Mexico and Quebec.