Geology

The Lelia sisters mine prospects are five previously exploited claims and an alluvium 100% covering over 12,000 acres located along the crest of the western mountain range of the province of Salta at elevations above 4,000 meters.

The geology of the region consists of a metamorphic basement that has been intruded by trondhjemitic intrusives. Differentiation of this magma produced a fluid that generated zoned pegmatite bodies along the crest of the magma chamber. The pegmatites are emplaced in both the basement and intrusive rocks. Reportedly there is zonation in mineralogy and textures both across the individual pegmatite bodies and vertically. Replacement of original mineralogy and textures in the pegmatites can be observed locally. Some of these replacements are relatively rich in microlite and minerals of the tantalite/columbite solid solution series of minerals.

Erosion of the pegmatiteís by alluvial and glacial processes generated placer deposits containing tantalum bearing minerals.

Tantalum concentrates were produced in the 1940's from the alluvial and hard rock resources of this region. Reportedly 10 tons of tantalum concentrates were produced. Galliski reports that another attempt was made to mine these deposits at a latter date and was not successful.

Previous work by Senior Geologist Galliski demonstrates that much of the tantalite/columbite series present at El Quemado has tantalum content below 60%. Only Lelia, Lelia I, Lelia II, Lelia III, Lelia IV, El Penon and Sta Elena were found to have specimens of these mineral with a Ta2O5 content above 60%.

Five shipments of tantalum concentrates were reported to have been made from the district. The tantalum contents of those shipments varied between 63.9% and 78.8% Ta2O5.

Galliski commented on the abundance of columbite and tantalite at each of the pegmatites. At four pegmatites (Lelia, Lelia II, Lelia IV, Elvirita ìaî, El Penon, Sta Elena C. and Tres Tetas) he commented that columbite was common. He does not put percentile limits on what he considers a common mineral or on his restricted and rare classifications. In a similar manner he describes the abundance of tantalite in the pegmatites and comments that tantalite is common in the Lelia pegmatite. It is listed as a restricted component at both El Penon and Sta Elena C. Microlite is another tantalum containing mineral which might contain more than 60% Ta2O5. Microlite is also listed as a common constituent of the Leila pegmatite.

The only assays are from samples collected by AMA resources, Senior Geologist Horacio Garkus in mid-2001. None of the samples assayed were acquired from pegmatiteís known, from Galliskiís work, to have higher concentrations of tantalum bearing minerals. One sample from Garkusí work, taken from Tres Tetas, contains 0.037% Ta2O5. This grade is approximately equivalent to the grade of the open pitable Blue River Carbonate deposit which has received approval from market analysts.

Samples from an alluvial deposit that contained approximate 2.1 pounds of Ta2O5 was a selected sample collected as a panned heavy mineral concentrate contained 0.03 pounds of Ta2O5. At current prices a pound of Tantalum is selling for $34.00 per pound to $99.00 per pound according to purity. Based on this sampling the Tantalum values would be in the range of $6,800 to $16,000 per ton.

Approximately thirty pegmatites are known to exist in the region. Ten pegmatites are known to have lengths in excess of 100 meters. With two exceptions the longer pegmatiteís have widths that average between four and eight meters. Unless these pegmatiteís have ore grades very much greater than is suggested by Galliski, these require exploitation by underground mining to produce significant tonnage. The total tonnage of pegmatite that might be expected from these deposits, if subjected to underground mining, is approximately 750,000 tones.

Two of the pegmatiteís, Agua Calientes (270 m long and 25 m wide) and Santa Elena Central (200 m long and 30 m wide) are much wider and could be open pit targets containing jointly as much as 5.9 million tones of pegmatite.

Assuming a 0.029% average grade, equivalent to that existing at SoG Greenbushes Mine, these open pit targets could contain approximately 4.5 million pounds of Ta2O5. This number of pounds could provide approximately 24 years production at 200,000 pounds per annum, placing this operation among the larger secondary producers in the world. This rate of production would require an 1100 tone per day operation or a 2200 tone per day seasonal operation. Using this estimate of available Ta2O5 in the open pit able pegmatiteís at El Quemado, one can look at the potential in situ value of the mineralization as if it has the same grade as Greenbushes.

The work by Galliski suggests that the tantalum is unevenly distributed in any one pegmatite. The strong mineral zoning he reported suggests that tantalum mineralogy will vary between pegmatite zones and those concentrations will be widely variable within pegmatite zones or replacement facies.

Sampling of the coarse-grained mineralization characteristic of the pegmatites will require very large samples in order to reduce sample variance to acceptable levels. One is not likely to achieve this level of sampling precision without considerable expenditure on equipment, personnel, transportation and assaying.

The characteristics, suggest large potential with regards to total cubic meters available for mining. It also suggests operating costs of this operation might be low given the devalued Argentine Peso.

A number of diverse sources of tantalum minerals may have contributed to a placer in the river down stream from the pegmatites, and it is likely that more pegmatites were eroded in the past and that some of the pegmatites now exposed are eroded below the level where higher-grade tantalum mineralization might be expected. Further, hydrothermal alteration of the trodhjemites may have produced relatively large volumes of weakly mineralized intrusive. The erosion by glacial and alluvial processes is likely to have comminuted this material and moved it down the drainages for some distance below the pegmatites.

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