MercoPress. South Atlantic News Agency

Canadian company impressed by first “gold values” prospecting in Uruguay

There is little gold or base metal exploration activity recorded in that area of Uruguay

The Canadian company B2Gold announced “impressive gold values” from a systematic mechanical trenching program in the south of Uruguay where in association with a local company (Weeping Apple S.A.) it has an option to survey ten claims totalling 34.200 hectares.

In a release the Canadian company said the Cebollati property consists of ten claims located in the Department of Lavalleja, 180 kilometres northeast of Montevideo in southern Uruguay. The claims comprise one exploration license totalling 163.06 ha, one prospecting license totalling 558.24 ha and eight prospecting applications totalling 33,478.77 ha. It has excellent paved road access approximately eight km from a highway in rolling farm country.

Under the terms of the option agreement, B2Gold will earn an 80% interest in the Cebollati property by paying US$1 million in stages by January 31, 2012 and funding all exploration work through feasibility. Additional obligations include the completion of a feasibility study, a per ounce gold payment and a Net Smelter Return for additional production.

Cebollati is described as “an exciting early-stage gold prospect located in an under-explored geologically favourable belt. Cebollati lies within the Dom Feliciano Fold and Thrust belt, a 250 km by 50 km north northeast trending belt of deformed Proterozoic sediments”. There is very little gold or base metal exploration activity or production recorded from this region in southern Uruguay.

Work to date on the Cebollati property consists of mapping, rock and soil geochemistry, airborne magnetics and ongoing trenching. The property is underlain by marbles, sericite schist and phylite which are intruded by late unmetamorphosed mafic dikes. Precious metal mineralization consists of replacement style mineralization within silicified and dolomotized metasediments and is associated with iron-oxides (hematite and jarosite) and copper oxides.

B2Gold is currently undertaking a systematic mechanical trenching program with the goal to outline the continuity and controls on the widespread surface gold-silver mineralization. Two trenches in the northern Windmill zone returned impressive gold values up to 2.03 grams per tonne (“g/t”) gold and 6.08 parts per million (“ppm”) silver over 108.6 metres (“m”) and 2.01 g/t gold and 2.77 ppm silver over 27.5 m. In addition two trenches completed in the southern zone 500 m to the south returned encouraging gold values including 1.02 g/t gold and 1.39 ppm silver over 24.0 m. Orientation of the mineralized zones is uncertain at this time and further trenching will outline controls and orientation.