Property Location and Description

The Penedono concession (“Penedono gold project” or the “Project”) covers a total area of some 52.2 km² and is located in north central Portugal, a two hour drive from the coastal city of Porto or a four hour drive time from Lisbon, the capital city. The concession is surrounded by and contiguous with the Armamar-Meda and Moimenta-Almendra concessions (Figure 1).

The project area is easily accessible year round by an extensive network of paved and gravel roads. Infrastructure and local resources, including proximity to the national electrical grid, major population centres, major highways and coastal port facilities, are excellent. The local population is supportive of resource development and new employment opportunities are welcome.

Much of the exploration work on the Penedono concession has been concentrated on the Santo Antonio area, located some 3 km NNW of the town of Penedono: site of “Roman workings” and an historic underground gold mine. The Penedono project is comprised primarily of the Santo Antonio area, but it also encompasses adjacent gold prospects including Turgueira, Marofa, Ferronha, Paredes-Dacotim, Bouções, and Sirigo Dama: all located within the Penedono concession (Figures 1 and 2).

Fig. 1: Location map of northern concessions: the Penedono concession is contiguous with surrounding Armamar-Meda and Moimenta-Almendra concessions. Note location of major gold and tungsten targets in the area.

Ownership

On May 7, 2007, Colt executed a Definitive Agreement with Rio Narcea Gold Mines S.A. Sucursal em Portugal (“Rio Narcea”) whereby Rio Narcea assigned to Colt all of the rights, benefits and obligations of Rio Narcea under an exploration contract dated October 29, 2004 between the Direcção Geral de Energia e Geologia (DGEG), a branch of the Government of Portugal, and Rio Narcea concerning the Penedono Project exploration licenses. Colt issued to Rio Narcea 200,000 common shares. Rio Narcea retains a 1% Net Smelter Royalty (NSR) up to a maximum of US$1 million.

Colt renegotiated the exploration contract of the Penedono concession with the DGEG and on September 17, 2009 signed an Addendum to the original contract granting an extension of a further three years, starting on October 29, 2009. The area of the Concession will have to be reduced by 50% on October 29, 2011

In order to maintain the contract in good standing, Colt must carry out specified exploration programs, incur specified minimal annual exploration expenditures, and must also pay an annual license fee to the Government of Portugal. The Government of Portugal retains a right to either 10% of net mining income or a 1% to 4% Net Smelter Return (NSR).

Fig. 2: Penedono concession geology map and location of main gold targets areas: 
Note widespread gold-bearing quartz vein clusters over 16 km wide area.

Geological Setting

The Penedono concession area is largely underlain by a NW-SE trending granitic intrusive complex of Hercynian age (~300 – 320 Ma) (Figure 2). Intrusive rocks consist of “S-type” two-mica granites with associated pegmatite, aplo-pegmatite and “I-type” (biotite rich) granites. In the region, S-type granites are considered syn-collisional, while I -type granites are considered post-collisional.

North of the concession, granites intrude a Precambrian to Lower Cambrian turbidite sequence that was overthrust onto the granites. The turbidite sequence is composed of in order of relative abundance shales, siltstones and silty shales, greywacke, quartzites, conglomerates, and carbonates.

Roof pendants of a chloritic schist complex (Beiras Schist) up to 7 km² in area along with aplo-pegmatite masses up to 2.9 km² in area occur locally within the granitic complex (Figure 2).

A crustal scale series of NE trending fault structures crosscut all lithologies and appear to have played a role in localizing mineralization in the region (Gruenwald, 2010).

Mineralization

The concession hosts several areas of intrusion-hosted gold and/or tungsten vein mineralization that may be indicative of an overall large hydrothermal system (Gruenwald, 2010). Several clusters of auriferous quartz-sulphide veins occur within a broad WNW trending, 16 km wide belt within the granitic complex (Figure 2). All major vein clusters appear to be hosted by two-mica, “S-type” granites. However, a genetic relationship between gold mineralization and post-tectonic, “I-type” magmatism and associated structural activity is supported (Lang, 2000). The principal mineralized areas or vein clusters include Santo Antonio, Marofa, Turgueira, Ferronha and Paredes-Dacotim.

Gold mineralization on the Penedono concession occurs as:

• En echelon, NE trending, steeply dipping quartz-sulphide veins (Santo Antonio);
• Quartz-sulphide “greisen” zones often associated with quartz-sulphide veining (Santo Antonio, Turgueira, Marofa); and,
• Sheeted to stockwork fracture and microvein systems (Ferronha, Marofa, Sirigo Dama).

Significant variations in the width of individual veins can be observed both within and between vein clusters. Individual veins can vary from tight fractures, to centimetre size, to widths of up to 3 m. In the major vein clusters, individual veins are subparallel and are spaced from tens of metres to greater than 100 m apart. Many of the veins are bounded by envelopes of greisen alteration. The extent of greisen development ranges from completely absent to envelopes several metres in width, but is typically a few tens of centimetres in width.

For most vein systems the principal sulphide is arsenopyrite. The greatest volume of arsenopyrite-rich material is localized along one or both of the contacts between a core of early, massive quartz and enclosing granite. Higher gold grades are always associated with arsenopyrite‐rich material. Conversely, not all arsenopyrite‐rich material is indicative of high gold grades. The gold content in zones of greisen alteration is very irregular. In most cases, greisen alteration carries very little gold, but locally gold grades can be very high, such as at Turgueira. In the latter case, high gold grades can be visually related to the presence of disseminated arsenopyrite (Lang, 2000).

Exploration History

The concession area, in particular the area surrounding the Santo Antonio historic mine, was first exploited for gold in Roman times, circa 200 BC to 300 AD. Several quartz veins in the Santo Antonio area were worked from surface to depths of up to tens of metres by the Romans. Elsewhere on the concession, widespread small surface excavations attest to tungsten artisanal mining dating back to the 1940s and 1950s. Other areas of historic and more recent exploration in the Penedono concession include Marofa, Turgueira, and Ferronha.

From the 1930s to the 1950s, according to limited government records, investigations were carried out to assess the Santo Antonio vein system and Ferronha prospect. There are many old shafts, some with elaborate rock structures as head frame supports.

In the early 1950s, the Santo Antonio gold mine went into production and operated for up to seven years. Underground mining exploited several gold veins. No drilling was carried out prior to mining. Shafts and adits were driven and at least four underground levels were established on at least four of the thirteen known vein structures. The deepest level established is believed to be only 150 m below surface. Underground mining operations ceased in 1957. Because available records are incomplete, the extent of underground operations, the amount of tonnage mined, and quantity of gold produced is unknown. However, remaining tailings suggest that over 100,000 tonnes of ore was milled.

From the 1970s to 1990s, RTZ Corporation (now Rio Tinto) as well as a joint venture partnership, Portuguese company S.P.E. and the BRGM, carried out exploration in the general area. In 1995, a Portuguese company, Sociedade Mineira de Moimento Lda., acquired a concession in the area and formed a joint venture with Greystar Resources Ltd. The joint venture carried out trenching, rock sampling, and drilled seven holes targeting the Paredes-Dacotim area. In 1998, Greystar abandoned the concession.

Rio Narcea first applied for the Penedono concession in 1998. Rio Narcea reapplied for and was granted a reduced concession area in 2004. From 1998 to 2003, Rio Narcea conducted extensive exploration including stream, soil, rock and underground adit sampling; geological mapping, geophysics, trenching and drilling. Stream sediment sampling was conducted over most of the concession. Geophysical exploration, consisting of Induced Polarization (7 km) and VLF-EM (53.2 km) surveys, was conducted over selected areas of the concession.

Rio Narcea carried out grid based soil sampling totalling some 22 km² focused on several areas with clusters of mineralized quartz veining: some 6,158 samples were collected (Figure 3). Areas covered by soil grids include Santo Antonio and Marofa, Turgueira and Boucoes, Paredes-Dacotim, Ferronha, and Sendim. Sampling was carried out with stations at 25 m spacing and lines at 100 m to 200 m spacing.

Trenching totalling some 8,187 m was completed on several areas including Santo Antonio, Turgueira and Marofa. The largest amount of mechanical trenching was carried out at Santo Antonio.

Since 1996, ten separate drilling campaigns were completed on different areas of the concession: a total of 6,875 m in 61 drill holes. Between 2001 and 2003, Rio Narcea drilled eleven holes, a total of 2,271 m, mostly in the Santo Antonio, Ferronha, Turgueira, and the Paredes-Dacotim areas. In 2005, in a joint venture with Canadian company C2C Inc., Rio Narcea drilled an additional eight holes, a total of 1,080 m, at Santo Antonio, Paredes‐Dacotim, and Turgueira.

Fig. 3: Penedono concession: Rio Narcea soil geochemistry grids and Au anomalies over geology map.

Colt Resources Inc.: Exploration Work

Colt has drilled 40 diamond drill holes for a total of 3157 m: 34 holes in the area of Santo Antonio and 6 holes on the area of Marofa.

In 2007, Colt drilled 12 diamond drill holes, a total of 1,355 m, on Veins 4 and 5 at Santo Antonio (Figure 4). Results indicate these veins have at least 260 m in strike length and over 110 m in vertical extent.

Fig. 4: Santo Antonio Area: Vein and drill hole location map. En echelon vein system numbered 1 to 13 from east to west. Note vestiges of Santo Antonio historic mine buildings located along road and at top right corner.

In 2008, Colt drilled two of the westernmost known veins of the Santo Antonio vein system: veins 11 and 13, which had not been previously drilled. Gold and locally tungsten mineralization was encountered not only in quartz veins but also in greisen-altered granite. The extent of greisen development is substantially wider than that observed in veins further east. Mineralized zones were intersected at depths of up to 100 m below surface. 

In 2009 Colt conducted general prospecting, carried out detailed excavator and hand trenching, and completed six drill holes in the Marofa area.

In 2009 and 2010, Colt completed 14 closely spaced diamond drill holes on Veins 11 and 13. 

Five veins within the Santo Antonio vein cluster have not been drill tested. Strike extensions of many veins have also not been drill tested: these extensions have been interpreted from soil survey results, but have not been fully delineated.

Exploration Results

Soil Sampling: Gold-in-Soil Anomalies

Rio Narcea covered several mineralized quartz vein clusters with soil sampling grids (Figure 3). Results indicate that soil sampling, even in areas of poor soil development, is an effective method of evaluating areas for gold potential. Soil sample gold results ranged up to 7371 ppb Au; arsenic results, up to 27,100 ppm As. Although several samples with high gold values also have high arsenic values, gold and arsenic display a poor to weak correlation coefficient of 0.43.

Soil sampling grid coverage over the Santo Antonio and Marofa areas was extensive, ~ 9.7 km². Combined, these two areas display the largest gold-in-soil anomaly (Figure 3). This anomaly is generally NE trending, roughly 1 km wide by 5 km long, and the SW end of the anomaly, located in the Marofa South area, remains open. Stream sediment gold anomalies extend for some 5 km NE of the Santo Antonio soil grid: these stream sediment anomalies remain to be validated by soil sampling.

Below is a brief summary of data per separate soil grid: number of samples, maximum value, grid size.

• Santo Antonio and Marofa areas: n = 2030 maximum = 3375 ppb Au grid size: ~ 9.7 km²
• Turgueira and Boucoes areas: n = 1921 maximum = 7371 ppb Au grid size: ~ 4.4 km²
• Paredes-Dacotim area: n = 1439 maximum = 1539 ppb Au grid size: ~ 6.2 km²
• Sendim areas: n = 645 maximum = 231 ppb Au grid size: ~ 1.3 km²
• Ferronha area: n = 123 maximum = 2616 ppb Au grid size: ~ 0.5 km²

Except for the Sendim area, all other areas display very high maximum soil Au values: 1539 ppb to 3295 ppb Au. The single highest maximum value, 7371 ppb Au, comes from an isolated soil sample at Boucoes.

The number of soil samples per grid with values greater than 500 ppb and 1000 ppb Au, respectively, are as follows: 72 and 16, Santo Antonio and Marofa (n = 2030) ; 19 and 4, Turgueira and Boucoes (n = 1921) ; 10 and 3, Ferronha area (n = 123) ; 2 and 2, Paredes-Dacotim area (n = 1439) .

Although the Santo Antonio and Marofa grids have the highest number of elevated soil Au values, the Ferronha grid exhibits the highest percentage of soil gold values with greater than 500 ppb Au. The vein cluster system in the Ferronha to Sirgio-Dama areas is roughly 1 km wide by 4 km long. Yet this area is covered by a very small soil grid, ~ 0.5 km² (n=123) (Figure 3). The soil anomaly at Ferronha remains open both to the NE and SW.

Santo Antonio historic mine area

The Santo Antonio area, site of “Roman workings” and an historic underground gold mine, is located some 3 km NW of the village of Penedono. The vein system at Santo Antonio, which outcrops over an area of 1.2 km by 1 km, is comprised of at least thirteen, NE trending, steeply dipping, en echelon quartz-sulphide veins that range in width from tight fracture veinlets up to 3 m wide. The surface strike length of known veins varies from 100 m to 700 m long. The thirteen known veins have a combined strike length of some 5,000 m: possible strike length extensions of these veins, interpreted from soil survey results, total another 3,700 m.

Rio Narcea and Colt have drilled less than 12% of the potential 8,700 m strike length of the Santo Antonio vein system down to less than 150 m depth. Veins remain open at depth and along strike. Five of the thirteen known veins have not been drilled. Underground work on Veins 1,2,3, and 6 suggests that potential vein lengths exceed strike length as observed at surface (Gruenwald, 2010).

Adit sampling by Rio Narcea of veins 1, 2 and 3 yielded grades ranging from 0.20 to 16.22 g/t Au (vein 1); 0.06 to 24.87 g/t Au (vein 2); and 0.08 to 67.69 g/t Au (vein 3). Average composite grade highlights range from 4.49 g/t Au to 15.83 g/t Au across average widths of 0.65 m to 1.68 m. Best results include an adit section in vein 3 some 128 m long with an average grade of 15.83 g/t Au over an average width of 1.68 m (Table 1).

Table 1: Santo Antonio Area: Significant gold results from underground sampling on veins 1, 2 and 3.

Vein	Avg. Au (g/t)	Avg. Width (m)	Over Length (m)
1	4.49	1.67	77.65
1	6.26	1.52	47.50
2	5.75	0.79	220.20
3	15.83	1.68	128.50
3	13.93	0.65	36.10

In 2005, Rio Narcea drilled five holes at Santo Antonio: one single hole tested Veins 1, 2, and 3; four holes tested Veins 4, 5 and 6. Drill result highlights include 2.10 m at 3.18 g/t Au (Vein 1); 1.60 m at 7.78 g/t Au; 0.76 m at 14.17 g/t Au (Vein 5); and, 1.57 m at 9.05 g/t Au (Vein 5).

In 2007, Colt completed 1,355 m of diamond drilling in 12 drill holes focusing on Veins 4 and 5 at Santo Antonio. For Veins 4 and 5, significant gold results range from 1.29 to 9.60 g/t Au over core intercepts of 0.53 to 1.53 m (Table 2). A newly located vein system oriented at 45° to Vein 4 was encountered at depths of 80 m. Notable core intercepts include 1.21 g/t Au over 17.0 m, 1.14 g/t Au over 9.96 m, and 8.24 g/t Au over 1.37 m. Narrower but higher grade core intercepts include 46.00 g/t Au over 0.18 m, 30.00 g/t Au over 0.37 m, and 11.10 g/t Au over 0.23 m (Table 2).

Table 2: Significant gold assay results from drilling by Colt on Santo Antonio veins in 2007.

Hole No.	Intersected Zone	From (m)	To (m)	Interval (m)	Au (g/t)*
PPE-07-03	Vein 5	66.89	68.74	1.85	3.90
	Includes:	67.89	68.74	0.85	8.30
PPE-07-05	Vein 5 zone	68.72	69.29	0.57	6.50
		73.88	75.21	1.33	2.80
PPE-07-06		20.36	20.85	0.49	1.30
	Vein 4	102.25	103.25	1.00	4.78
PPE-07-07	Vein 4	49.43	50.43	1.00	5.90
PPE-07-08	Vein 5	49.80	50.80	1.00	1.29
	Vein 5 zone	53.80	57.80	4.00	2.52
	includes:	53.80	55.60	1.80	4.62
	includes:	54.80	55.60	0.80	8.96
PPE-07-09	Vein 4	88.06	89.85	1.79	1.86
	includes:	88.06	88.85	0.79	3.92
	Vein 5	136.85	138.38	1.53	4.80
	includes:	136.85	137.38	0.53	9.60
PPE-07-10	News vein system	35.95	45.91	9.96	1.14
	includes:	41.73	41.91	0.18	46.00
		66.00	83.00	17.00	1.21
	includes:	71.93	72.50	0.57	8.40
	includes	76.28	76.51	0.23	11.10
PPE-07-11	New vein system	112.28	113.28	1.00	3.02
PPE-07-12	Possible new vein	19.43	20.80	1.37	8.24
	includes:	19.43	19.80	0.37	30.00
	Vein 5	75.65	76.75	1.10	1.24

*Assay results greater than 5 g/t Au in bold.

In 2008 and 2010, Colt drilled Veins 11 and 13. Drilling results show several very encouraging high grade gold values over core intercepts greater than 1.4 m (Figure 5 and Table 3). These include in vein 11: 18.37 g/t Au over 1.54 m and 14.59 g/t Au over 3.15 m; and in vein 13: 13.35 g/t Au over 1.41 m, 15.31 g/t Au over 1.80 m and 39.67 g/t Au over 2.23 m. Narrower but higher grade core intercepts include 180.57 g/t Au over 0.38 m in vein 11; and, 87.04 g/t Au over 1.00 m in vein 13.

Fig. 5: Santo Antonio Area: Detail map of Colt drilling on veins 11 and 13; and, table of significant drill gold results (Au g/t / drill interval m).

Table 3: Significant gold assay results from drilling by Colt on Santo Antonio veins 11 and 13 in 2008 and 2010.

Hole No.	Intersected Zone	From (m)	To (m)	Interval (m)	Au (g/t)
PPE-08-01	Vein 13	64.94	66.35	1.41	13.35
	Includes:	64.94	65.50	0.56	26.56
PPE-08-02	Vein 13	56.30	58.53	2.23	39.67
	includes:	57.06	58.06	1.00	87.04
PPE-08-03	Vein 11	55.05	61.79	6.74	8.34
	includes:	55.05	58.20	3.15	14.59
	includes:	56.05	56.92	0.87	34.40
PPE-08-04	Vein 11	39.16	47.30	8.14	5.89
	includes:	39.16	40.70	1.54	18.37
PPE-10-01	Vein 11	29.40	32.50	3.10	46.50
	includes:	30.33	30.71	0.38	180.57
PPE-10-04	Vein 13	64.75	64.83	0.08	75.64
PPE-10-07	Vein 13	49.20	51.00	1.80	15.31
	includes:	49.50	50.25	0.75	35.34

*Assay results greater than 5 g/t Au in bold.

Tailings in the vicinity of the Santo Antonio historic mine represent a potentially economic resource. In April 2009, Colt collected six samples, totalling 500 kg, from the largest Santo Antonio mine tailings and sent these for analysis. Results indicate an average grade of 1.36 g/t Au (Colt, internal reports).

Turgueira area

The Turgueira target, a broad NE trending greisen alteration system, is located 10 km WNW of the village of Penedono (Figures 2 and 3). Soil sampling by Rio Narcea revealed a weak to moderate gold and arsenic signature extending for over 2 km. Rock sampling from old pits, trenches, adits, and rock dumps outlined a well developed trend of greisen alteration containing a higher grade section of gold mineralization.

Trench sampling yielded several wide, low grade intervals including Trench1: 51.7 m at 0.50 g/t Au; Trench 2: 51 m at 1.01 g/t Au; and, Trench 3: 52.2 m at 0.64 g/t Au.

Drilling indicated a continuation of the erratic greisen alteration and gold-arsenopyrite mineralization continuing to depth with the better grades seemingly confined to a 15 to 20 m wide zone within a larger greisen envelope. Rio Narcea hole PTU-06 drilled beneath Trench 1 and 2 and an old adit returned 1.23 g/t Au over 26.4 m. Hole PTU-04 returned 0.79 g/t over 30.3 m.

Marofa area

The Marofa North and Marofa South areas are situated less than 1 km W and SW, respectively, of the Santo Antonio area (Figure 2). Soil surveys by Rio Narcea over these areas define a large, strong gold-in-soil anomaly. Soil anomaly peaks seem to trend NE and appear to be a continuation of the NE trending soil anomalies related to veining as seen at Santo Antonio.

Limited prospecting and mapping by Colt identified six locations of gold-bearing float and outcrop with granite-hosted, north trending fracture veinlets and thin quartz veins (Figure 3). Displaying highly variable density, these veins are typically bordered by thin greisen envelopes. Arsenopyrite locally comprises up to 50% of veins. 

“There are abundant examples of N-S veins, which are typically narrow (millimetre-to centimetre-scale), with a regular decimetre-scale spacing between the veins, and a centimetre-scale greisen envelope around each vein. There is the same evidence for left lateral movement seen at Santo Antonio, i.e. striated vein walls, steps on vein walls, sygmoidal arsenopyrite veins, and foliation in granite at vein margins.” (Goodman 2010)

All 31 widespread rock samples, collected by Colt from areas of greisen alteration and arsenopyrite bearing narrow veins, contained gold values with assays ranging from 0.15 g/t Au to 96.00 g/t Au.

Follow-up detailed excavator and hand trenching over a limited area at Marofa, returned low‐grade gold intervals: the widest interval, 14.50 m at 0.27 g/t Au; the highest grade trench sample, 1.82 g/t Au across 0.70 m. Drilling of six holes in the same area revealed mineralized fractures and veinlets. The highest grade drill intercept was 3.70 g/t Au over 2.10 m.

The extensive kilometre size gold‐in‐soil anomaly at Marofa remains unexplained and largely untested.

Ferronha area

In the vicinity of Ferronha to Sirgio Dama, located 2 km south of the town of Penedono, Rio Narcea carried out reconnaissance mapping and rock sampling over an area 3 km by 5 km. Detailed mapping and soil sampling was carried out over a small grid, ~ 0.5 km², which covers an area of minor historic mine workings.

Rio Narcea outlined abundant clusters of NE, and to a lesser extent NW, trending fractures within granitic units (Figure 2). Fractures are closely spaced, commonly occurring at densities of the 3 to 8 fractures per metre. Locally, these fractures have associated sheeted veins with quartz and arsenopyrite.

Rio Narcea mapped old working including shafts on three quartz veins in a 400 m x 500 m area. Detailed mapping in this area outlined three en echelon ENE trending dextral shear zones some 10 to 20 m wide. Sampling across shear zones returned results up to 0.89 g/t Au over 8 m. Of grab and rock dump samples collected in the area, six samples returned results ranging from 15.69 to 151.54 g/t Au. Sampling across shear zones returned results up to 0.89 g/t Au over 8 m. A selected grab sample collected from the more ENE striking veins by Rio Narcea was reported to contain 134 g/t Au.

In 2005, one hole (PFE-01) was drilled to a depth of 265.9 m to target veining near a 1940s era shaft. It intersected five areas of weakly mineralized quartz veins: mineralized zones range from 1.95 to 7.00 m in drill width. Assays ranged from 0.44 g/t Au over 2.0 m to 0.80 g/t Au over 5.5 m, including 2.68 g/t Au over 1.0 m. Although gold results from this hole were low, it is clear it did not intersect semi-massive arsenopyrite mineralization found in grab samples from rock dumps beside nearby historical workings.

As indicated earlier, the Ferronha area has a strong gold-in-soil anomaly covering a very small ~ 0.5 km² soil grid. Soil sampling over fracture and quartz vein clusters showed strong, 100 m to150 m wide gold- arsenic anomalies ranging up to 2616 ppb Au and 3970 ppm As. Stream sediment sampling by the S.P.E. – BRGM consortium in the early 1980s outlined an elongate NE trending 2.7 km x 5.7 km arsenic anomaly that covers the Ferronha and Sigio Dama areas.

The gold-in-soil anomaly at Ferronha remains open both to the NE and SW.

Paredes-Dacotim area

The Paredes-Dacotim target is located 9 km NW of the village of Penedono (Figures 2 and 3). Rio Narcea completed a geochemical survey covering 6.2 km². Rio Narcea and Greystar completed 23 trenches and 12 drill holes.

Gold mineralization is associated with several subparallel NE trending clusters of gold-bearing veins and shear structures within highly altered granite over an area of 0.7 km by 1 km. Significant trench results include several high grade gold values ranging from 5.22 g/t Au to 23.70 g/t Au over widths of 0.10 m to 1.00 m. Trench highlights include: T18- 11.6 m at 2.18 g/t Au; Dacotim pit- 7.4 m at 5.82 g/t Au.

Notable drill results from the Dacotim pit include 3.4 m at 2.96 g/t Au, 3.0 m at 1.04 g/t Au, and 1.0 m at 6.17 g/t Au. 

Boucoes area

Located 1.5 km west of the Turgueira target, Bounces is a nearly N-S trending band of greisen alteration some 10 to 25 m wide and 300 m long that remains open to the north. The granite-hosted greisen zone contains several narrow, centimetre-scale, quartz sulphide veins trending NNW to N.

Results from grab, channel, and trenching by Rio Narcea show several high grade narrow veins including: 0.30 m at 17.13 g/t Au; 0.68 m at 19.7 g/t Au; 0.35 m at 27.71 g/t Au; 0.20 m at 30.05 g/t Au; and 0.20 m at 37.18 g/t Au.

Trench interval highlights include: PBOT1- 1.68 m at 8.29 g/t Au; and, PBOT2- 1.00 m at 7.33 g/t Au.

Geological Model and Gold Deposit Styles

Reduced Intrusion-Related Gold Systems

The style of gold mineralization present in the concession has many similarities to deposits of Intrusion-Related Gold Systems, such as in the Tintina Gold Belt in Alaska and Yukon. According to Lang (2000), some of the key features that suggest such a relation include the following:

• Multiphase intrusions of I-type and S-type emplaced during or shortly after thrust faulting.
• A metal assemblage of Au, Bi, Te, As and W, with lesser Sb, Sn, Mo and base metals.
• Correlation of Au with As and Bi; temporal separation from W-Mo; low base metals.
• Zones of sheeted veining, although here they are probably not within the causative intrusion.
• Greisen alteration in narrow envelopes around veins, separated by essentially unaltered rock.
• Mineralized miarolitic cavities within I-type intrusions.
• Potentially mineralized pegmatites that may grade laterally into quartz veins.

Hart (2007) described reduced intrusion-related gold systems (RIRGS) as follows:

• “These gold systems have only been recognized as a new deposit class since 1999 and, as such, are in a juvenile state of understanding with still rapidly evolving data collection, interpretation, and nomenclature.” ... “(The) RIRGS model was adopted in the late 1990s to classify many Au deposits and districts throughout interior Alaska and Yukon, and assembled into the vast Tintina Gold Province.”
• “Intrusion-hosted, sheeted-vein styles of mineralization typically occur in all associated RIRGS plutons to some degree, but the classification can include skarns, replacements, disseminations, veins, and stockworks that may develop within, beyond, or above the pluton’s thermal aureole.”
• The most diagnostic deposit style within the RIRGS classification is intrusion-hosted, sheeted arrays of thin, low-sulphide quartz veins with a Au-Bi-Te-W signature, which preferentially form in the brittle carapace at the top of small plutons, where they form bulk-tonnage, low-grade Au deposits characterized by a Au-Bi-Te-W metal assemblage, such as the Fort Knox and Dublin Gulch deposits.
• “The dominant structural control on RIRGS is weak extension that forms arrays of parallel fractures in the brittle carapace that are filled with thin (0.1–5 cm), auriferous, low-sulphide quartz veins that form extensive, intrusion-hosted sheeted arrays.”
• “The grades and tonnages of deposits classified as RIRGS are wide-ranging due to the variation of deposit styles within the classification.” (Figure 6)

Fig. 6: Grade and tonnages of deposits considered to be RIRGS, with emphasis on the intrusion-hosted mineralization style. Other deposit types and controversial deposits are shown for comparison. Open symbols are used for deposits that are controversial. BCC = Brewery Creek Classic zone, CC = Clear Creek. (After Hart, 2007)

Recognized and Conceptual Gold Deposit Styles

Several different recognized and conceptual gold deposit styles occur or possibly occur on the Penedono concession. These are listed below and summarized schematically in Figure 7 (Lang, 2000).

• High-grade Au vein deposits (e.g. Santo Antonio),
• Large tonnage intrusion-hosted Au deposits (sheeted vein clusters : e.g. Ferronha, Turgueira, and Marofa),
• Metasedimentary-intrusive contact Au mineralization (conceptual)
• Intrusion-hosted disseminated Au deposits (conceptual), and,
• Lateral transitions of pegmatites into veins (conceptual).

 
Fig. 7: Schematic representation of recognized and potential gold targets in the central part of the Penedono concession (after Lang, 2000).

Conclusions and Recommendations

“... the Penedono concession has excellent potential to host Au deposits of economic tonnage and grade that can be classified and conceptualized within existing models for intrusion-related gold systems.” (Lang 2000)

“The Penedono concession offers excellent potential for the discovery of gold ± tungsten deposits. Colt’s exploration programs have methodically tested and delineated gold mineralized zones in the Santo Antonio and Marofa areas. ... Santo Antonio, Turguiera and several other gold mineralized zones and geochemical anomalies have yet to be fully explored.” (Gruenwald, 2010)

The 2010 Technical Report (NI43-101) on the Penedono concession (Gruenwald, 2010) includes the following conclusions:

• Geochemical surveys are effective exploration tools. 
• Soil sampling delineated distinct and locally extensive gold-in-soil anomalies in several areas.
• Soil surveys reveal a strong correlation with “in situ” gold mineralization.
• Arsenic is often but not always a good indicator or “pathfinder” for gold.
• There remain a number of untested geochemical anomalies and areas of prospective greisen alteration.
• Santo Antonio drilling successfully tested quartz vein systems from 50 to over 150 metres below surface. There are several veins and areas between veins that have received little exploration.
• (At Santo Antonio,) Veins 11 and 13 have yielded some of the highest gold grades reported in drilling and offer additional exploration potential. 
• At Marofa, work to date has identified granite-hosted gold mineralization associated with narrow quartz veinlets and fractures. Although the density of the mineralization was insufficient for bulk tonnage deposits there remain other areas worthy of follow-up for such deposits. 
• The Turgueira auriferous greisen system was trenched and only lightly drilled by Rio Narcea. Given the extensive greisen development and zones of disseminated auriferous arsenopyrite and local tungsten, this is a target worthy of further work. 
• The Paredes-Dacotim and Ferronha areas have yielded localized high-grade gold mineralization. The latter has received very minor drilling.

Recommendations for further work (Gruenwald, 2010) are as follows:

“Santo Antonio – Continued exploration drilling is warranted in two primary areas (not in priority order):

• Drilling on Veins 11 and 13 both along strike and to depth. 
• Drilling on untested Veins 8-10 and 12.
• Drilling the 300 m gap between Veins 3 and 4 to test high-grade veins and NE striking veins. 
• Area of low topography, greisen soil and gold soil anomaly between Santo Antonio and Marofa.
• Trenching and possible drilling on Marofa target MF6.

Turgueira:

• Soil sampling and prospecting to further delineate greisen alteration and Au-W mineralization.
• Trenching and drilling gold ± tungsten greisen and gold-in-soil soil anomalies.

Marofa:

• Prospecting, rock sampling.
• Trenching and drilling untested exploration targets

Ferronha:

• Prospecting and detailed rock sampling to define targets within large soil geochem anomaly.
• Trenching and drilling of select(ed) targets.”

References

Colt Resources Inc., Internal reports.

Goodman, Sally, 2010 Penedono Gold Project Structural Study: internal report prepared by SRK Consulting for Colt Resources Inc.

Gruenwald, W., 2010, Technical Report (NI 43-101) on the Penedono Gold Concession, Northern Portugal

Hart, C.J.R., 2007, Reduced intrusion-related gold systems, in Goodfellow, W.D., ed., Mineral deposits of Canada: A Synthesis of Major Deposit Types, District Metallogeny, the Evolution of Geological Provinces, and Exploration Methods: Geological Association of Canada, Mineral Deposits Division, Special Publication No. 5, p. 95-112.

Lang, James R., 2000, Regional Evaluation of Gold Prospects in Oscos Belt, Asturias, Spain and the Penedono Concession, Northern Portugal. Report prepared for Rio Narcea Gold Mines Ltd.

Rio Narcea Gold Mines S.A., Compiled internal reports.