The Lajitas Project is strategically located on the Maricunga belt where more than 60 million ounces of gold have been identified at important gold deposits, including the Maricunga gold mine (Kinross), the La Coipa mine (Kinross) and the Cerro Casale deposit (Kinross/Barrick). The Lajitas Project is also proximal to Kinross' Marte-Lobo Mine as well as stellar exploration projects like Andina Mineral's Volcan Project and Exeter Resource's Caspiche Project. Andina reported the Volcan deposit contains 9.8M oz Au (measured and indicated categories) and 768,000 oz Au (inferred category) in September 2009. Deposits in the Maricunga district are predominantly porphyry gold stockwork systems (+/- copper) and are contained within advanced argillic alteration zones that locally host high-sulphidation epithermal gold deposits.
Alteration and mineralization at Lajitas measure approximately 2 kilometres square and Capella's Lajitas deposit model is similar to that seen at the Volcan and Caspiche projects. Gold mineralization at Lajitas occurs in both the quartz stockwork contained within the porphyry and in zones of argillic alteration associated with the intrusive. Capella's deposit model for Lajitas clearly depicts an association between argillic alteration and gold mineralization.
Exploration work completed by Capella on the Lajitas property includes a compilation of historical data, diamond drilling (2008), Reverse Circulation ("RC") drilling (2006, 2009/2010), Ground Magnetic and Induced Polarization ("IP") surveys (2006,2007), road cut sampling (2008,2009 and 2010), a detailed remote sensing analysis (2007) and 3D modeling.
In 2006, Capella drilled seven verification RC drill holes (1709m) in the area of the historic resource estimation. Intersections of particular note from the RC drilling include 192 metres @ 0.72 g/t gold (LJ06007), 116 metres @ 0.88 g/t gold (LJ06001r) and 92 metres @ 0.95 g/t gold (LJ06002r).
The 2006 drill program identified a significant area of gold mineralization on the northwest corner of the geophysical anomaly with mineralization open to the north, south, west and east.
In 2008 Capella completed a 1364 metre, four hole diamond drill program to test the 2 kilometre-diameter geophysical anomaly. This diamond drilling tested the IP chargeability anomaly across the mapped intrusive and the surrounding resistivity lows interpreted as zones of alteration. Hole LJ-08011 was drilled at an angle into the IP anomaly and intersected oxidized andesitic volcano-clastic and dacitic intrusive rocks altered with iron oxides, clay and silica. The intersection reported a zone of continuous gold mineralization of 261 meters grading 0.91 g/t gold between 90 meters and 351 meters down the hole. Contained within the intersection is 104.7 meters grading 1.59 g/t gold. Anomalous copper mineralization was intersected throughout hole LJ-08011 with the best interval grading 0.15% copper over 33 meters.
In 2008-2009 company geologists completed mapping and sampling of new road cuts on the Lajitas property. Four new gold zones were identified by the program with the most significant measuring 350 meters in length and defined by gold values ranging from 0.1 to 0.35 g/t gold. The company plans to continue road extension to more fully define the newly discovered gold zones.
Capella completed a 2009-2010 RC drilling program and extensive road building campaign at Lajitas. The drill program targeted the new gold zones discovered during the 2008-2009 exploration season while the extensive road building campaign provided outcrop exposure that will be used in an effort to define structures/trends and to establish correlation with geophysical data. Drilling results include 318 meters grading 0.68 g/t gold including 140 meters at 1.02 g/t gold (LJ10015r).
Previous exploration on the Lajitas property includes 1700 metres of bulldozer trenching and 14 reverse circulation drill holes (2574 metres) completed in 1996 by Minera Santa Fe Pacific Chile Ldta. ("MSFPC"). Trenching identified a 50 to 70 metre wide mineralized zone grading 0.8 g/t gold and five of the drill holes were mineralized with intervals up to 50 metres wide averaging up to 1.32 g/t gold. Subsequently in 1997 MSFPC estimated an "indicated" mineral resource estimate of 348,000 ounces of gold.
Vetting of this resource by Capella in 2006 determined a significant resource to be definitively present in terms of tenor but overstated in apparent tonnage. Notwithstanding the downgrading, the gold resource continues to be significant as it proves ore forming processes were active in a substantial way on the Lajitas property. The Lajitas resource could become economically viable through either the addition of more tonnage and/or higher grades, or potentially through new discovery on the property. Subsequent geophysical work points towards highly encouraging targets.