PROPERTY:

GEOLOGY

Geophysical Survey 2003

In November and December 2003, Quaterra and Blackberry completed a geophysical survey consisting of 10 lines (6.6 km in length) of CSAMT and Controlled Source Induced Polarization (CSIP) for a total of 66 line-km. In addition, a Ground Magnetometer survey was completed consisting of 12 lines including the 10 lines surveyed with CSAMT for total of 76 line-km of magnetic surveying. The work was performed by Zonge Engineering and Research Organization of Tucson, Arizona (Job No. 0319). The CSAMT survey greatly extended coverage of the survey completed in 1995 and 1996 by Zonge Engineering on behalf of Kennecott. The survey identified several prospective anomalies, a number of which correspond to areas of known mineralization, but extend far beyond the limits of

previous drilling (Quaterra News Release February 3, 2004).

 

The CSAMT survey identified six conductive features, three of which correspond to the areas of known mineralization along the Santa Rita, San Gregorio and Majada veins. The rest were previously unknown. These conductive zones coincide with some of the IP anomalies. The anomalies are interpreted to represent mineralization, have a southwest-northeast trend extending for distances up to 3.5 km and spaced at intervals of approximately 1000 m from north to south across the Nieves property.

 

The survey also identified a large undrilled IP anomaly west of San Gregorio and several smaller untested anomalies in the adjacent areas.

Geophysical Survey 2010

Between May and August 2010, Quaterra and Blackberry conducted a geophysical survey performed by Zonge Engineering (Job No. 10094). The survey consists of 25 lines utilizing dipole-dipole or pole-dipole IPR (Induced Polarization and Resistivity) arrays, covering the Concordia-San Gregorio-Dolores vein system (14 lines); east extension of Santa Rita vein system (4 lines); the California vein system (4 lines); Manto-1 CSAMT target (1 line); and the El Rosario mercury occurrence (2 lines).


The results of the survey indicate the Concordia and San Gregorio are two separate veins and not fault offsets of the

same vein, and identified strong anomalies along strike to the east and west of both veins that have not been drilled. The San Gregorio vein appears to be the eastern extension of the Orion vein, which is generally unexplored and under-explored for a distance of over 2500 meters.

 

The results of the survey east of the historic mine at Santa Rita vein indicate a zone of anomalies extending eastward a distance of 1000 m. The results from the two lines surveyed at the El Rosario mercury occurrence identified narrow zones of weak IP anomalies.

This 2012 image shows the eastern region of the Nieves property. The 2012 proposed pit is outlined in dark red.

Image D

Known Eastern Vein Systems From 2012

43-101 Technical Report

Enlarged view of 2012 proposed pit. Red and blue dots show drilled holes.

Image E

2015 – 2016 Airborne and Land-Based Property-Wide Geophysical Survey

The results and conclusions from processing and modeling VTWMplus and IP data:

 

In February 2015 Geotech completed an airborne VTEMplus survey of the entire Nieves Silver Property consisting of a total of 1146 line-km at a 200 meter spacing between lines. The survey collected magnetic field and time domain electromagnetic field (TEM) data for processing and modeling.


The most notable feature to emerge from the survey was a large, ovoid magnetic low anomaly with dimensions of 1,900 meters by 1,000 meters, which is located at the western end of the central vein system (the Concordia-Gregorio) which includes the “drill indicated” Ag (silver) within the Concordia vein. This magnetic low lies midway between the Orion-Gregorio vein, where drill hole QTA 190 intercepted bonanza grade silver (54.5oz/ton), and the

Santa Rita vein system to the south, where gold has been mined from gold-silver veins as recently as 1980, which is thought to be the center and source of the extensive mineralization previously encountered on the property. The most likely cause of the magnetic low anomaly is an intrusive rock, breccia or hydrothermal alteration, or combination thereof.

 

Two zones of increased (higher) magnetite located north and south of the low may be hornfels or magnetite-bearing skarns peripheral to the intrusion or breccia which need to be tested for gold.


A magnetic field low within a mining district is often of interest, but unless there is a sulfide system closely associated with the low it remains little more than a curiosity until it is drilled or surveyed. The best geophysical indicator of a hidden metallic sulfide zone is

Ground confirmation of the discovery using airborne geophysics of Nieves western vein system located 10 kilometers to the west of the three known major eastern vein systems. Pictured: Dr. Tom Patton on the right. June 2016.

a properly configured inverse polarization (IP) survey. The IP method is very sensitive and very accurate. This method has evolved to the point that geophysicists no 

longer talk in terms of “anomalous IP zones”, but rather in terms of sulfide zones.

same vein, and identified strong anomalies along strike to the east and west of both veins that have not been drilled. The San Gregorio vein appears to be the eastern extension of the Orion vein, which is generally unexplored and under-explored for a distance of over 2500 meters.

 

Three 8,000 ft. northwest-southeast lines of induced polarization were subsequently run over the magnetic low anomaly depict a strong chargeability anomaly coincident with the massive observed magnetic low anomaly beginning at depth on all three lines. This means the anomaly is caused by the presence of sulfide minerals, which could be entirely pyrite or more likely a combination of pyrite and other sulfide carrying values in gold and silver. It is probable that the mineralization in the known

vein systems, including the 110 million ounce silver resource found in the Concordia Vein System, is peripheral leakage from a concealed mineralized system at depth recognizable only by coincident magnetic low and IP high anomalies.

 

The 2015-2016 Geophysical Survey found: that the three known major braided vein systems, the California, Concordia, and Santa Rita extend 8km west, 10km east to west; 3 untested veins located south and southeast of the vein swarm known as the Santa Rita; and two interesting magnetic lows near the west edge of the survey, located 9-10km west of the Central Vein System at Nieves, the Concordia. There is limited past exploration in this area. Though the source of the magnetic features is unknown, it was considered important enough to stake an additional claim of 1873.4 hectares (4,460 acres) to protect the property for future exploration work. These anomalies will be tested to determine if the magnetic lows contain sulfides and silver mineralization – more importantly if they identify the intrusive source of Nieves silver resource.