The majority of the Company’s large land position in Argentina is located in the province of Santa Cruz. This province encompasses the Jurassic-aged, Deseado Massif geologic region which is home to large number of precious metal mines and prospects, including those of the Company.

Santa Cruz Province

The Company considers Santa Cruz to be a mining­-friendly province that supports active mining and petroleum industries. The volcanic plateau of the Deseado Massif of Santa Cruz is six million hectares in area and hosts several mines, including Cerro Negro, Cerro Vanguardia, Cerro Moro, Manantial Espejo and San Jose Huevos Verdes. As a consequence, Santa Cruz benefits from existing infrastructure and a workforce that understands exploration and mining. In addition, these projects are predominantly low sulfidation, epithermal style gold­ and silver deposits and their brecciated equivalent. This geological trait is the main target for exploration in this region.

Patagonia holds a number of projects in Santa Cruz. Among those are four of the Company’s five principal operations and/or advanced-stage projects: Capo-Oeste in the El Tranquilo block of concessions, Lomada de Leiva (“Lomada”) in the La Paloma block, La Manchuria and La Josefina. The Company is concentrating its exploration and development efforts on three main blocks:

  • The El Tranquilo block hosts the Cap-­Oeste gold and silver project (or “Capo”), as well as the Monte Leon, La Marciana, Don Pancho, Breccia Valentina, Vetas Norte, Felix and Laguna prospects, together with the Estancia La Bajada acquisition.
    • Capo commenced commercial gold production in 2016 via heap leaching of surface mined material. A total of 1,429,013 tonnes of mined material, grading 2.34 g/t Au and 75,28g/t Ag, has been placed on the fully-lined heap leach facility. Approximately 80,000 ounces of gold equivalent have been recovered by leaching from Capo since inception. During peak production, Capo achieved approximately 3,580 recovered gold ounces equivalent per month. The Company continues to recover approximately 500 gold ounces equivalent a month from pregnant leach solution at the Capo.
  • The La Paloma property block hosts the Lomada de Leiva gold mine (“Lomada”) and the Estancia El Rincon acquisition.
    • The Lomada gold deposit, located south-southeast of the community of Perito Moreno. in the western part of the Deseado Massif, is a classic, low-sulfidation epithermal mineral system. Precious metal mineralization at Lomada is hosted in a NNE-striking, steeply ESE-dipping structure (the “Main Breccia”). Production at Lomada commenced in 2013 via heap leaching of surface mined material. A total of 1,914,400 tonnes of mined material, grading 1.97 g/t Au, have been placed on the fully-lined heap leach facility. Approximately 121,100 ounces of gold have been mined and 98,100 ounces recovered by leaching from Lomada since inception. During this period, mining occurred from a portion of the Main Breccia spanning more than 150 meters vertically and 600 meters on strike. During peak production, Lomada achieved approximately 3,900 recovered gold ounces per month and continues today from residual solution processing. The most recent technical report on Lomada, was prepared to JORC standards in 2007.
  • The La Manchuria property block hosts the Manchuria gold and silver project (“Manchuria”).

In addition to these three, main property blocks in Santa Cruz, Patagonia Gold controls the Martha Mill and Property and has around 20 other mining properties in the highly-prospective Deseado Massif (see map in this section).

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