Geologist Merrill McHenry Keeps His Eye on the Guerrero Gold Belt

Source: Brian Sylvester of The Gold Report  (10/29/12)

Merrill McHenryMillions of years ago, tectonic events created significant gold and silver mineralization in the Guerrero Gold Belt in Mexico. Today, two gold companies have reported 16 Moz of gold there, and other discoveries are sure to follow. In this exclusive Gold Report interview, Merrill McHenry, an independent analyst and geologist, explains the region's geology and its hot prospects.

The Gold Report: Merrill, speaking as a geologist, what makes the Guerrero Gold Belt in Mexico so highly prospective for gold and silver mineralization?

Merrill McHenry: Two words: plate tectonics. Two tectonic events in that area of sufficient scale to create an entire region filled with gold mineralization.

In more detailed terms, the Chortis plate, which was about the size of Colorado, impacted the western side of southern Mexico. The first event, about 140 million years ago, created "laramide" north-south extensional faults. That was followed, about 70 million years later, by a strike-slip to the southeast. As the strike-slip slipped and subducted under the southern portion—what is today Guerrero State—it rotated many of those north-south transitional faults and shear zones into roughly 40-degree and other angles, creating a chimney effect, which brought the mineralization, in liquid form, much closer to the surface. In geological terms, this is called a metasomatic transfer. The strike-slip also created various low-angle extensional faulting allowing laterally displaced mineralization and improving strike-length potential.

TGR: How does the creation and mineralization of the Guerrero Gold Belt compare to the Carlin Trend in Nevada?

MMcH: Both had tectonic events that liquefied the subterranean minerals and resulted in events that could transport the minerals to the surface. The Carlin Trend, which is older, was formed underwater. On Carlin, hydrothermal channels were created and bubbled up for long periods. In the Guerrero Gold Belt, the minerals were liquefied and brought up as structurally controlled magmatic events along various intrusive zones.

"Two tectonic events in that area of sufficient scale to create an entire region filled with gold mineralization."

Typically, economic mineralization is highest along these intrusion zones. (The structural control is a key to creating and allowing for higher-grade mineralization.) These systems are most fully developed either at (e.g., El Limon-Guajes) or below (e.g., Los Filos-Bermejal) the contact of the local Mezcala formation (shales and sandstones) with the underlying Morelos formation (carbonates).

In addition, the strike-slip and subduction that created the Guerrero Gold Belt arguably covered a larger area. To date the Carlin Trend is roughly 40–60 kilometers (km) long; mineralization in the Guerrero Gold Belt has been found along a 60km-plus range.

Another difference is that the Carlin Trend has been mined and prospected for well over 100 years, with the first large mine—Carlin—opening nearly 50 years ago. The first major mine in the Guerrero Gold Belt went into production in 2008 and most of the exploration remains to be done. So far, two companies—Goldcorp Inc. (G:TSX; GG:NYSE) and Torex Gold Resources Inc. (TXG:TSX)—have reported 16 million ounces (Moz) of NI 43-101 gold resources in the Guerrero Gold Belt. I expect Newstrike Capital Inc.'s (NES:TSX.V) Ana Paula project will report near 3 Moz of NI-43-101-compliant in-pit gold mineralization, and roughly 4.5 Moz in global resources, mostly to be included in subsequent pits, by the end of 2012. Ana Paula has some breccia pipe areas of spectacular grade and width.

TGR: What can you tell us about the kind of precious metals deposits discovered in the Guerrero Gold Belt so far?

MMcH: Because it is a long, intrusion-hosted system, much of the gold mineralization is at or near the surface. You can find the intrusions—an orange-red oxidized ore (retrograded calc-silicate skarn)—at the surface. Gold mineralization in the district tends to be in the most oxidized alkaline significantly reduced iron and magnesium host rock that conversely hosts increasingly higher gold values.

Essentially, you want heavily magnetite/hematite (iron) initial fluid flows, but later during the retrograde (cooling) phase, you want the magnetite to precipitate out and become more oxidized Calc-alkaline potasically altered and biotite rich. That is where the highest gold mineralization occurs.

"So far, two companies have reported 16 Moz of NI 43-101 gold resources in the Guerrero Gold Belt."

Gold occurs either in chlorine complexes or in a variety of high-sulfidation complexes that are stable at lower temperatures, which tend to drop out at lower near-surface temperatures, usually because of some event that changes the oxidation state. Therefore, you can get multiple economic mineralization in the same hydrothermal system—higher temperatures and less fluid mixing at depth giving you gold, copper, and silver; and lower temps and magmatic/meteoric mixing as you move higher in the system, giving you gold with much less silver and copper.

TGR: Is there a company working on one of those polymetallic deposits?

MMcH: Torex is working on the Media Luna project, to the south of the Balsas River, where the mineralization tends to be deeper. To date, Media Luna is 300 to 600 meters deep and looks to be polymetallic, not predominantly a gold project.