OMI's wholly owned Chilean subsidiary. Fortune Valley Resources Inc., signed an earn-in agreement in September 2009, on the Anillo Project, with Chilean state entity, Corporación Nacional del Cobre de Chile (“CODELCO”), giving OMI the right to earn-in to a 65% interest in the Project in return for completing i) US$3 million of staged exploration expenditures before September, 2013 (since completed), and ii) the completion of a feasibility report by September 2015. OMI has spent US$4.3 million to date.

In November 2014, OMI announced the execution of a no cost extension of its farm-in contract at its Anillo Project with Codelco until January 2020 with a further option to extend for an additional 2 years to 2022. The September 2015 deadline has now been extended with Codelco until January 2020, which may also be extended a further 2 years to January 2022 with a discovery and the definition of a mineral resource by 2020.

In November 2014, OMI announced the execution of a non-binding letter of intent with Chile to Asset Chile Exploración Minera Fondo de Inversión Privado to option up to a 40% share in its interest in Anillo by Asset Chile spending up to approximately US$3.5 million in three phases with the intention of making a discovery and delineating a resource at Anillo.

Anillo is located within the north-south trending epithermal Au-Ag deposits of Paleocene age in the Central Depression of the northern of Chile.

The property is located in the Antofagasta Region, within the Central Depression of the north of Chile and at an average altitude of 1,900 meters above sea level. The El Peñon mine operated by Yamana Gold Inc. is located 15 km to the southwest. A paved road leading to Antofagasta to the northwest is located 20 km north, which connects Antofagsta to the Escondida mine to east. The 2004 El Peñon measured, indicated and inferred mineral resource was 8.4 Mt at 14 g/t Au and 234 g/t Ag (7), including the bonanza grade Quebrada Colorada vein, representing more than half of the gold resource reported for the belt. 

HISTORY

Historical work on the property includes surface mapping, geophysics, drilling and trenching by Utah Minerals, BHP Billiton, Normandy Mining and Codelco. Drilling by Utah Minerals intersected several encouraging zones of anomalous gold mineralization. Historic data highlights several precious metal anomalies related to vein zones, some of which support the presence of epithermal Au-Ag mineralization similar to that encountered nearby at the El Peñon mine.

GEOLOGY

The Anillo property is a consolidated block of more than 30,000 ha (approximately 22 x 14 km), being earned into by OMI under agreement with Codelco, which the objective to discover a high grade epithermal Low Sulphidation gold-silver vein system similar to Yamana’s neighboring El Peñon mine. Evidence of middle Eocene porphyry and High Sulphidation style mineralization appears to be present at the property based on historic exploration by Codelco and work completed by OMI to date. Work completed in FY 2014 has allowed OMI to gain better insight into the areas of greatest potential and generate higher geophysical and geochemical data density supporting a further targeted exploration drilling program. This work includes a detailed structural study focused on the El Peñon – Anillo - Veta Victoria corridor as well as other structural patterns to the east. CSAMT (Controlled Source Audio-Frequency Magneto Tellurics geophysical technique) has proved to be a valuable tool for this type of mineralization in the area, showing good correlation (demonstrated by historical drilling values) between specific resistive patterns and potentially mineralized structures and will also be used in planning future drilling efforts.

The Paleocene epithermal Au-Ag belt at the north of Chile (Warren et al., 2007)

Geology of the area is dominated by a Paleocene volcanic sequence including tuff and flows of andesitic and dacitic composition, which are cut by late Paleocene to early Eocene dacitic to rhyolitic domes and porphyry dioritic stock and dikes. These rocks represent a basin-fill episode associated to an extensional-transtensional tectonic environment. North-northeast to north-south fault systems at the west (Dominador) and east (Cerro Paisaje) are located at the border of the basin where put in contact the volcanic sequence with older volcanic, sedimentary and intrusive rocks. The north-south to northeast the El Peñon vein set is in the central part of the tectonic basin.

EXPLORATION

OMI’s exploration work at Anillo began on 2010 and includes:

  • a review of the regional geology background
  • 1,478 stream-sediments samples including quality controls
  • 1:10,000 scale geological mapping covering the whole property
  • 5.6 km line in 59 trenches
  • 2,735 rocks samples in trenches including quality controls
  • 684 surface rocks samples associated to field mapping including quality controls
  • seven blocks of ground magnetics
  • 25 km line of CSMAT in 12 sections
  • 10,173 m of RC drilling in 35 holes of 60-600 m depth
  • Structural interpretation (N Oliver)
  • Lithogeochemistry on the existing rock sampling data set (N Oliver)

CURRENT EFFORTS

Future work is focussed on finding intercepts, grades and continuity of mineralization that may constitute an economic resource for the Company.

Geology of the El Peñon-Anillo area according to Arancibia et al. (2006)

The structural interpretation of Nick Oliver shows six domains and confirms that the northeast portion of the property is of main interest for Low Sulphidation Au-Ag mineralization. This domain includes the Yamana’s new Pampa Augusta Victoria discovery and the initial La Lengua, Dominador, Normandy, Anillito Oeste and Anillito Este targets advanced by OMI. 

Structural interpretation of the Anillo Project (N Oliver)

Alteration Summary

Fairly widespread silica-rich caprocks with associated clay and gossans (pale orange), dominate Domain 4 and the edges of Domain 6. There appears to be an outward zonation from the central altered more mafic intrusions (badly weathered) into an advanced argillic zone (red) and then a phyllic zone (yellow). This alteration zonation is at least partly influenced by the topography, with the most silicarich rocks at the greatest elevations, flanked by the intense clay alteration. Some of the clay alteration likely overprints earlier phyllic alteration so it is difficult to tell if this zonation is significant. Phyllic alteration is apparently absent in Domain 5, even though the kaolinite-alunite-pyrophyllite signal assictaed with the El Peñon veins is more subdued than within Domain 4. This could reflect a stronger epithermal association in Domain 5 at El Peñon, with possible porphyry alteration being predominant in Domains 3, 4 and 6.

Targets

Map of preliminary targets based on structural interpretation and alteration assemblages (N. Oliver)

Recent exploration activities at Anillo demonstrate the presence of gold and silver values associated with epithermal High Sulphidation ledges. The lithogeochemistry completed by N. Oliver indicates that the central zone of the property, within the structural domain 5, is most likely to host this type of precious metal mineralization. The Principal Component analysis was inconclusive regarding the potential for Low Sulphidation veins at Anillo central, but did support that the northeast portion of the Project is the more obvious extension to explore for El Peñon and Pampa Augusta Victoria style mineralized Au-Ag veins.

Ground Magnetics and CSAMT surveys

The definition of drill targets at Anillo combines geological mapping, trenching, surface rock sampling, geophysics and modeling. RC drilling recorded several sections of 1 - 4m of 0.1 to 0.55 g/t Au, two sections of 1m of 1.1 g/t Au and 4 g/t Au, 2m of 100 g/t Ag and 1m of 490 g/t Ag. These results are indicative of a fertile latent epithermal Au-Ag system and coincide with the stated objectives for follow-up exploration work focused on the delineation of an ore body in the Project area. Silver values, specifically, appear to correlate well with low sulphidation type veins, like those seen in Yamana’s neighboring Pampa Augusta Victoria and El Peñon.

CSAMT SURVEY AND DRILLING VALIDATION

Geophysical contractor Zonge completed a CSAMT survey during February-March 2013, with the primary goal of pinpointing the location of resistive domains, mainly interpreted as silica/quarzt-bearing structures, which are thought to potentially host economic gold-silver mineralization. This method has been a highly valuable technique in highlighting veins at El Peñon and in the discovery of other epithermal vein systems worldwide.

A total of 25 line kilometers of CSAMT in 12 sections were completed at Anillo, which showed several subvertical and high-angle resistive structures. Those spatially close to rock sampling with Au-Ag values and anomalies were selected to drill test during the last 3,000 m RC drilling campaign in May-June 2013. The large majority of these identified targets still remain undrilled.

A drilling intercept of 1 m at 490 g/t Ag recorded in hole AN13-03RC is contained in a subvertical resistive structure, which correlates well with a 6km long north-south set of lineaments interpreted by N. Oliver and a medium intensity Low Sulphidation anomaly delivered from a principal component analysis run. 

CSAMT Line 3 and 1 m of 490 g/t Ag intercept in AN13-004RC drilling

A drilling intercept of 5m at0.314 g/t Au including 1 m of 1.1 g/t Au in the AN13-010RC drilling is associated to a quartz vuggy ledge, supporting the thinking that this type of system is potentially mineralized at Anillo and thus opens a new frontier for follow-up exploration. At Line 7 of the CSAMT survey, a resistive anomaly with a zoned pattern replicates the traditional epithermal High Sulphidation geologic model well. Similar resistivity configurations in the remainder of the CSAMT lines are under consideration for further exploration.

CSAMT Line 7 and 5m of 0.314 g/t Auintercept in AN13-004RC drilling

Au-Ag values seen in historic drilling compare closely to the CSAMT resistive domains and support further exploration work. A good example of this is the AN11-008RC drilling at CSAMT Line 2 (shown below).

CSAMT Line 2 and AN11-008RC drilling intercepts