Canadian Gold Hunter

A little over a year ago, junior explorer Canadian Gold Hunter Corp. (TSX: CGH) signed a letter of intent with Almaden Minerals Ltd. (AMEX: AUU, TSX: AMM) to acquire a 70% interest in the Caballo Blanco gold property in Veracruz State, Mexico.

The Caballo Blanco (White Horse) property is located on the Gulf of Mexico roughly 60 kilometers north of the port city of Veracruz. The project consists of seven mineral concessions totaling over 15,000 hectares, roughly 10 kilometers wide by 15 kilometers long.

Infrastructure surrounding the area is excellent. The property is accessible by the Pan American Highway Main power grids and and a natural gas line also crosses the project area.

Caballo Blanco is a large, high-sulphidation epithermal gold system. High-sulphidation deposits are a result of fluids that have been channeled directly from a hot magma. These fluids interact with groundwater and form strong acids which rot and dissolved the surrounding rock leaving behind silica, often in a sponge-like formation known as vuggy silica. Gold and sometimes copper-rich brines that also ascend from the magma then deposit their metals within the spongy vuggy silica bodies.

Examples of major high-sulfidation gold deposits are the Yanacocha mine in Peru, which contains 13.4 million ounces of gold in 377.2 million tonnes grading 1.1 g/t gold and the Veladero mine in Argentina, which contains 11.4 million ounces of gold in 337 million tonnes grading 1.1 g/t gold.

Low-sulphidation epithermal gold systems have been well developed in Mexico. High-sulphidation gold deposits, however, have not. This is due in large to the fact that high-sulphidation systems tend to occur as large bulk-tonnage deposits, which require advanced technology to discover and mine, whereas the high-grade narrow veins typical of low-sulphidation deposits were more easily explored during Mexico’s early mining history.

In the last decade, however, two significant high-sulphidation systems have been identified in Mexico and are currently in production. In 2007, the high-sulphidation Mulatos mine, owned by Alamos Gold Inc. (TSX: AGI), produced over 100,000 ounces of gold and the high-sulphidation El Sauzal mine, owned by Goldcorp Inc. (NYSE: GG, TSX: G), yielded over 300,000 ounces.

Canadian Gold Hunter and Almaden Minerals hope to develop the Caballo Blanco project into a similar operation.

Caballo Blanco covers three large areas of mineralization known as the Northern Zone, the Highway Zone and the Central Grid Zone.

Prior to Canadian Gold Hunter’s earn-in option, drilling in the Northern Zone intersected 108 meters grading 1.14 g/t gold in drill hole CB-05-03, 92.7 meters grading 1.0 g/t gold in CB-06-01 and 76 meters grading 1.70 g/t gold in CB-06-03. The Central Grid Zone is a gold-rich porphyry target, in which drill hole CB-04-01 intersected 56 meters grading 0.84 g/t gold and 0.34% copper.

In November 2007, Canadian Gold Hunter initiated a modest 5,000 meter drill program to follow up previous testing of the three areas of mineralization. Since that time the company has reported assay results on 11 holes. The results from these holes can be seen below…

Initial drilling has been widely spaced and focused on the Cerro la Paila target area of the Northern Zone high-sulphidation gold system, which covers an area of some 20 square kilometers.

Two core rigs continue to drill the Cerro la Paila gold zone, which is targeted by a strong resistivity anomaly 800 to 900 meters in length and up to 450 meters wide. Detailed in-fill drilling will be undertaken after the full length of the Cerro la Paila gold zone has been explored by widely spaced holes.

Based on the drill results that have been published so far, it looks like there’s a decent chance for Caballo Blanco to develop into a significant bulk-tonne grade gold project. We will continue to follow the Caballo Blanco story further in Gold World as the project advances.

Until next time,

Luke Burgess
www.GoldWorld.com