Two other properties maintained by the Company, include the Machacala Property in Peru, and the Barry-Souart Property in Quebec, Canada. Although the recorded costs for these properties were written off in 2006, the Company continues to seek joint venture partners to continue the exploration and development of each property. At present, the Company does not plan any further investment in either of these properties.
Gold Hawk's Machacala property covers an area of 5,306 hectares and lies 42 km due east of the coastal city of Trujillo in northern Peru. Elevations vary from 3,300 to 3,700 meters above sea level. The property is accessible by road year round and infrastructure on site includes housing for exploration crews and water rights from a nearby lake. The town of Carabamba, located 12 km from the property has housing, schools, a hospital, telephone services and is on the national power grid.
Gold Hawk originally acquired this property in 1996 through a renewable lease. In 2007 the Company renewed its lease agreement on the Machacala Property, whereby it is assigned the mineral exploration and exploitation rights in certain mining concessions located in Peru. These rights and concessions are subject to a lessor royalty of 30% of the after tax profits from production, but the Company has an option to purchase the royalty and the mineral rights for US$800,000. The lease and purchase option term are for five years, expiring in 2012.
Mining activities at Machacala date back to 1960. However, most of the mining occurred between 1979 and 1991 when 230,000 tonnes of silver-gold ore grading an average of 6 g/t gold and 340 g/t silver were milled. Production ceased in 1991 due to low silver prices.
The Machacala deposit is a typical low sulphidation epithermal deposit. Hydrothermal fluids, probably originating from a granodiorite intrusive, have circulated through the numerous fault systems in the area to produce a large number of quartz veins, and stockworks that are mineralized with silver, gold, copper, traces of other base metal minerals and pyrite. The veins are sub-vertical and vary in width from 1 meter to 4.5 meters while stockworks can reach widths of up to 40 meters. The veins are sub-parallel and strike in a northwest direction. A total of 12 veins have been mapped and worked on to various degrees, while many other secondary veins are known to exist on the property.
On the basis of the exploration work carried out prior to 2004, a inferred mineral resource of 635,000 tonnes averaging 7.63 g/t gold and 216.6 g/t silver has been estimated in four of the ore shoots. These four ore shoots are included within an overall estimated inferred mineral resource of 1,560,000 tonnes. In addition, approximately 200,000 tonnes of tailings which grade 1.26 g/t gold and 74 g/t silver from previous mining operations remain on site and could be recycled if a new plant is built.
In 2004, Gold Hawk drilled eight diamond drill holes totaling 1,746 meters and completed 357 meters of cross cutting and drifting along the Casa de Fuerza vein where previous drilling and mining had indicated the presence of a high grade ore. Samples taken at 1.1 meter intervals over a 59 meter section of the vein averaged 3.07 g/t gold and 13.5 g/t silver over a true width of 1.05 meters. These grades and width were lower than that encountered in diamond drill hole GH-2 (11.32 g/t gold and 26.3 g/t silver over a true width of 2.1 meters) which was drilled in 2000 and is located 45 meters above the drift.
Six of the eight diamond drill holes of the 2004 exploration program were drilled to test the lateral and down dip extensions of the Casa de Fuerza and the Planta veins over an area measuring 500 meters in strike length and 200 meters in vertical extent. Only one diamond drill hole, GH-2, had previously been drilled on this block of ground. Two of the holes missed the vein due to faulting and the vein flattening in dip more than expected. Two holes cut the vein where projected but the gold and silver values were negligible. Hole MA-00-04 located 100 meters SE of hole GH-2, returned 44 g/t gold and 395 g/t silver over 1.0 meter.
Two drill holes also tested the lateral and down dip extensions of the Fragua vein where hole GH-4, drilled previously, averaged 13.95 g/t gold and 164 g/t silver over 3.2 meters and hole GH-3 averaged 4.73 g/t gold and 298.1 g/t silver over 3.1 meters. Diamond drill holes MA-04-07 and 08 cut the Fragua vein where expected and respectively returned 0.94 g/t gold and 122 g/t silver over 3.1 meters and 10.3 g/t gold and 459 g/t silver over 0.5 meters. The exploration work underground and the drilling completed in 2004 greatly contributed to the understanding of the grade, thickness and overall geometry of the Casa de Fuerza, the Planta and the Fragua veins.
Although the results of the 2004 exploration program indicated that the potential of the Casa de Fuerza and La Plata veins are less than previously estimated, the Fragua vein and other targets such as the Caridad system and IP anomalies to the north and the northwestern extension of the Casa de Fuerza vein all remain open for future exploration
The Barry-Souart project is wholly owned and is located in the highly prospective Urban-Barry belt approximately 90 km. east of Quevillon in northwestern Quebec. The property consists of a total of 40 mining claims covering an area of 640 hectares.
In 2004, Gold Hawk completed a 12 hole, 2000 meter diamond drill program on the property.
The best results were:
- Hole LB-04-10 - 11.8 g/t over 6.5 meters.
- Hole LB-04-12 - 5.0 g/t over 1.1 meters.
- Hole LB-04-01 - 1.6 g/t over 1.5 meters.
- Hole LB-04-09 - 2.7 g/t over 1.0 meter.
The drilling campaign successfully proved the continuity of the mineralized zones identified during the 1997-1998 drill program. The drilling also discovered several new zones, some of which corresponded with IP/Mag coincident anomalies. The main auriferous showing and associated new sheared zones represent important discoveries and require additional work to fully evaluate their extent and grade.
