La Herradura is the largest operating gold mine in Mexico. It is jointly owned by Newmont Mining, the world's largest gold mining company, and by Industriales Peñoles. La Herradura presently contains over 3 million ounces of gold reserves, and during 2004, produced 150,000 ounces of gold at a cost of less than $145 per ounce. Seabridge Gold's Noche Buena deposit, located 12 miles northwest of the Colibri Project area, is currently undergoing advanced stages of a mine feasibility study. Capital Gold's El Chanate mine, located 20 miles to the southeast, started production in August, 2007. Meanwhile, Newmont and Peñoles have recently acquired large tracts of land to the east and north of the Colibri Property. In 2006, Peñoles drilled a fence of nine reverse-circulation holes along the eastern edge of the Colibri Property.
Current gold exploration on the Colibri Project targets down-dip projections of high grade quartz veins and associated hematite-silica breccia zones that cut Jurassic volcanic and sedimentary rocks (see drill core photos below). Scores of underground mine workings and prospect pits dating back to the Spanish occupation are focused on these veins. Geological mapping (see illustrations below) reveals that the veins were originally emplaced along steep NW and NE-trending fractures associated with the Late Jurassic megashear. Gold appears to have been mobilized and concentrated later during Laramide compression, when the veins were rotated and sheared along moderately-dipping reverse faults. A younger generation of Tertiary low-angle normal faults (detachment faults) intersects the reverse faults, resulting in dissemination of gold along shallow, undulating breccia zones. Two of these detachment faults were apparently imaged by an electrical geophysical survey (see illustrations below).
Reverse-circulation drill holes totaling 5600 m targeted gold-bearing quartz veins and associated reverse faults on the Colibri Project during 1994, 1998, and 2005. Four areas were drilled: San Francisco mine, Juarez mine, Nopal Zone, and Panteon Zone, with significant gold assays reported in Table 1 below. This work was followed up by 2152 m of diamond core drilling during 2006-07. Diamond drilling confirmed gold mineralization at San Francisco mine, and intersected a resistivity-chargeability anomaly within the Naranja Zone that corresponds to disseminated gold occurrence along a mapped detachment fault. Colibri's August 13, 2007 News Release, keyed to the maps and tables presented below, summarizes the history of drilling and pertinent gold results on the Colibri Project.