Overview & Strategy
Patagonia Gold Plc is a mining company that seeks to grow shareholder value through exploration, development and production of gold and silver projects in the southern Patagonia region of Argentina. The Company’s principal business is to hold investments in mineral exploration companies involved in identifying, acquiring and developing technically and economically sound mineral projects, either on its own or with joint-venture partners. Management is based in Buenos Aires, London, and Toronto and the principal exploration office is located in Perito Moreno, Santa Cruz, Argentina.
The Company holds its principal properties, including the Cap-Oeste, COSE, Lomada de Leiva and La Manchuria gold and silver projects and related properties, through its 90%-owned Argentinean subsidiary, Patagonia Gold S.A. (“PGSA”). Patagonia Gold, indirectly through its subsidiaries or under option agreements, has mineral rights to over 220 properties in several provinces of Argentina and Chile being one of the largest landholders in the very prospective province of Santa Cruz. The Company has developed a portfolio of highly-prospective, grassroot and more advanced projects, with many that exhibit the potential to host high-grade, gold-silver vein systems. The Company is currently focused on growing its mineral resources and advancing them into production. The Company’s aim is to become a 200,000 ounce per annum gold equivalent producer by 2015.
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 Vanguardia, Mina Martha, Manantial Espejo, San Jose Huevos Verdes, as well as various advanced projects such as Cerro Negro and Cerro Moro. As a consequence, Santa Cruz benefits from existing infrastructure and a workforce that understands exploration and mining. In addition, these projects are predominantly low sulphidation, epithermal “bonanza” vein style gold-silver deposits and their brecciated equivalent. This geological trait is the main target for exploration in this region.
Patagonia holds a number of advanced exploration projects in Santa Cruz and is concentrating exploration efforts on three distinct property blocks including El Tranquilo, La Manchuria and La Paloma:
1. The El Tranquilo property block hosts the Cap-Oeste gold and silver project (“Cap-Oeste”), the Company’s flagship project and the Cap-Oeste South East project (“COSE”) as well as the Monte Leon, La Marciana, Don Pancho, Breccia Valentina, Vetas Norte, Felix and Laguna prospects, as well as the Estancia La Bajada acquisition;
2. The La Manchuria property block hosts the Manchuria Main Zone gold and silver project (“Manchuria”); and
3. The La Paloma property block hosts the Lomada de Leiva gold project (“Lomada”) as well as the Estancia El Rincon acquisition.
In addition to these three main property blocks, Patagonia has a further 20 exploration claims for approximately 133,000 hectares located in the highly-prospective Deseado Massif. Drill targets have also been successfully established on the Sarita and El Bagual properties.
In June 2006, the Government of Chubut introduced a provisional law banning mining and mineral exploration activities for a period of three years. The ban covered a specified area in the western sector of the Province where a number of PGSA’s exploration properties are located, including the historical Huemules gold mine and the advanced Crespo project.
During 2009, this mining restriction was extended for a further three years until the Government of Chubut determines when and how mining and mineral activities can restart.
PGSA has been working with both local and regional governments in Chubut, the Argentine (federal) mining chambers and associated stakeholders towards building trust and co-operation in an effort to lift the ban and to recommence mining activities in the Province.