Northern Portugal

Commodity: Gold

Location, Tenure and Ownership

The Marrancos Gold Project is located in northwestern Portugal, approximately 20 km north of the city of Braga. The Project is located approximately 55 km north of Medgold's Valongo licence and 85 km from the Boticas licence, and covers a total area of 39 square km.

Medgold has the option from Lusorecursos, a private Portuguese company, to earn an initial 70% interest in the Marrancos Project by making a cash payment of €25,000 and incurring exploration expenditures of €150,000 on or before 12 months following the agreement date. Upon acquiring the 70% interest in the property, Medgold shall elect to either form a 70:30 joint venture with Lusorecursos or be granted a second option to earn an additional 30% interest. Medgold may exercise the second option, to earn a 100% interest in the Project, by making a cash payment of €20,000 to Lusorecursos and incurring exploration expenditures of €150,000 within the following 12 months. Upon acquiring the 100% interest in the Project, Medgold shall grant to Lusorecursos a 1% NSR royalty on production from the property, and Medgold will have the right at any time to purchase the royalty by making a cash payment to Lusorecursos of US$1.0 million.

Target Type

The Marrancos Project targets orogenic-style gold mineralization, focussing on major regional structures. These structures and their subsidiary features are capable of focussing large quantities of hydrothermal fluids. Three targets have been defined within the Project area, controlled by a northeast trending shear corridor, with quartz vein and tension gashes mineralized with pyrite and arsenopyrite.

Project History

During early 20th century, the Marrancos area was explored for tin and tungsten and later for gold. In 1954 a mining concession for arsenic, gold and silver was issued by the Portuguese state to Jaime Macedo de Oliveira, and referred to as the Mina de Cova dos Mouros concession. In the same period, Serviço de Fomento Mineiro (SFM), a public entity, also explored for gold in the area, with the goal of raising the State's level of knowledge of the national geologic and mining potential. This work included geologic mapping, stream sediment and soil geochemical surveys, geophysics, trenching, and culminated in 8 diamond drill holes, with a best result of 5.82 m @ 5.14 g / t Au, from 70.50 m. The reader is cautioned that these are historical results and that a Qualified Person has not completed the work necessary to verify them.

Marrancos Geology

The Marrancos Project area is located between the Galicia-Tras-os-Montes and the Central Iberian Geotectonic Zones, and is crossed by two late-Variscan brittle-ductile structures: the NW-SE trending Vigo-Régua Shear located near the western limit of the licence, and the NE-SW Portela das Cabras-Carbalinho shear, thought to be the main structure controlling mineralization.
Gold mineralization within the Marrancos Project area occurs in silica-vein structures, or associated with silica in aplite-pegmatites. These structures may occur in different geologic contexts: in late- to post-tectonic biotitic granites (e.g. at Grovelas), in two-mica syn-tectonic granite (e.g. Godinhaços), or hosted in metasedimentary rocks, close to the granite contact (e.g. Marrancos).

Medgold due diligence exploration work

The Project currently features three reasonably well-defined prospects, with the best being the Marrancos prospect. Mineralization at the prospect is controlled by a 15 m wide, northeast-trending structure, which outcrops and is mineralized over a strike length of 600 m.

Medgold's recent due diligence work has confirmed the presence of the 15 m wide shear corridor, but perhaps more importantly, has also identified the presence of sigmoidal quartz veins, up to 50 cm in thickness, cross-cutting the main shear corridor. Their orientation is northwest-trending and perpendicular to the northeast-trending shear -- yet are parallel to the historical trenches and drilling. Our recent due diligence sampling has identified four rock-chip results of 35.90 g/t Au, 8.63 g/t Au, 4.19 g/t Au and 4.75 g/t Au. Two of these were from float, but the two others were sampled from outcropping northwest-trending sigmoidal quartz veins, indicating that previous exploration have either missed or overlooked this orientation of veining as a potential host for mineralization.

Exploration work over the coming months will focus heavily on the detailed analysis of the vein-structure relationship and the principal controls on the distribution of the high-grade sigmoidal veins. If the work identifies suitable drill targets, Medgold aims to drill-test this zone in the Fall, immediately following the completion of the Centerra-funded drilling program at Boticas Gold Project.