Figure 1. Location of New World’s Projects in the USA, including the new Tererro Cu-Au-Zn Project in New Mexico.

Figure 2. Geology of the Company’s Tererro Cu-Au-Zn Project and surrounds, New Mexico, USA.

Figure 3. Long Section illustrating the mineralisation intersected in drilling at the Jones Hill Deposit, within the Company’s Tererro Cu-Au-Zn Project in New Mexico, USA. (Mineralised intervals are down-hole thicknesses and may differ from true thicknesses).

Photos showing previous activity at the Jones Hill Deposit.

Figure 4. Cross-Section 433890E illustrating mineralisation at the Jones Hill Deposit.

Figure 5. Cross-Section 433980E illustrating mineralisation at the Jones Hill Deposit.

Figure 6. Location of historical drill-hole collars on geology and contours of topography at the Jones Hill Deposit.

On 9 April 2019 New World Cobalt Limited announced it had acquired the Tererro Cu-Au-Zn VMS Project in New Mexico, USA (“Tererro VMS Project”). This acquisition provides the Company a substantial new long-term growth opportunity in a Tier-1 jurisdiction, as the project includes both a near-term development opportunity in the high-grade, gold-rich Jones Hill VMS Deposit as well as outstanding potential to discover and develop additional adjacent deposits as part of a larger VMS mining camp.

Location and Access

The Tererro VMS Project is located approximately 120km north-east of the city of Albuquerque in northern New Mexico (see Figure 1). An interstate highway and a national railway line both pass approximately 20km to the south of the Project. A sealed road provides access from the interstate highway to within approximately 5km of the Deposit, from which an extensive network of unsealed tracks provide excellent access to the Jones Hill Deposit and the greater Tererro VMS Project area.

The Company has entered into agreements providing it with the right to acquire a 100% interest in 20 Federal mining claims covering 400 acres in New Mexico, USA.

The Company has also staked new Federal mining claims covering 4,300 acres that encompass multiple under-explored VMS prospects immediately along strike from the Jones Hill Deposit (100% NWC; see Figure 2).

Geology and Mineralisation

The Jones Hill Deposit is a middle-Proterozoic-aged volcanogenic massive sulphide (“VMS”) deposit. It is hosted by a metamorphosed volcano-sedimentary sequence whose exposure in the district is generally limited to the lower parts of drainages that have eroded through the younger, overlying Palaeozoic sediments to expose the older, underlying Proterozoic host rocks (see Figure 2).

The Jones Hill Deposit is located 8km south-west of the historical Pecos Mine, another VMS deposit (see Figure 2). Between 1927 and 1939 approximately 2 million tonnes of ore was mined from the Pecos Deposit at average grades of 13.1% Zn, 4.0% Pb, 0.78% Cu, 116 g/t Ag and 3.63 g/t Au.

Mining operations ceased in 1939 due to problems managing water coupled with bad ground conditions.

Mineralisation at the Jones Hill Deposit comes to surface and comprises:

  1. A steeply dipping up-thrown fault block containing hydrothermally altered, talc-chlorite-chalcopyrite schist up to 80 metres thick (estimated true thickness); and
  2. A lower fault block of copper-zinc rich massive sulphides that is up to 26 metres thick (estimated true thickness; see Figure 3).

Jones Hill Deposit – History

The Jones Hill Deposit was worked from three adits and a shaft during the 1930s and 1940s. No historical production figures are available, but production appears to have been limited.

In 1970, two prospectors, Carlson and Rector, secured the claims over the deposit.

In 1974, Conoco Inc. secured the rights to Carlson and Rector’s claims as they assembled an extensive land package which extended from the Jones Hill Deposit to the Pecos Mine.

Between 1977 and 1981, Conoco drilled 39 diamond core holes that led to the discovery of the Jones Hill Deposit. This drilling program revealed that mineralisation had considerable depth extent, extending to greater than 800m below surface.

Thick sequences of high-grade mineralisation were intersected in multiple holes, with better results including:

  • 94.8m @ 5.24 g/t Au, 0.83% Cu, 0.32% Pb, 0.68% Zn and 24.3 g/t Ag from 203.9m (J25), including:
    • 5.5m @ 13.10 g/t Au, 1.37% Cu, 0.64% Zn and 24.6 g/t Ag from 210.3m;
    • 30.6m @ 7.73 g/t Au, 1.13% Cu, 0.47% Pb, 0.72% Zn and 32.7 g/t Ag from 249.8m; and
    • 8.0m @ 8.73 g/t Au, 1.90% Cu, 0.26% Pb, 0.58% Zn and 43.9 g/t Ag from 286.5m
  • 33.2m @ 2.34 g/t Au, 2.76% Cu, 0.09% Pb, 6.01% Zn and 22.5 g/t Ag from 185.0m (J9)
  • 48.6m @ 2.88 g/t Au, 1.00% Cu, 0.48% Pb, 0.49% Zn and 36.6 g/t Ag from 130.0m (J7), including:
    • 19.1m @ 3.52 g/t Au, 1.57% Cu, 0.63% Pb, 0.65% Zn and 48.7 g/t Ag from 145.8m
  • 63.4m @ 3.05 g/t Au, 0.40% Cu, 0.21% Pb, 0.18% Zn and 17.2 g/t Ag from 284.4m (J27), including:
    • 10.8m @ 5.41 g/t Au, 0.27% Cu, 0.57% Pb and 42.3 g/t Ag from 337.0m
  • 36.0m @ 3.69 g/t Au, 1.33% Cu, 0.43% Pb, 0.24% Zn and 36.9 g/t Ag from 152.7m (J10), including:
    • 24.4m @ 4.34 g/t Au, 1.61% Cu, 0.56% Pb, 0.28% Zn and 48.7 g/t Ag from 152.7m
  • 27.6m @ 2.50 g/t Au, 1.15% Cu, 0.06% Pb, 5.84% Zn and 10.7 g/t Ag from 649.2m (J19)
  • 40.3m @ 0.99 g/t Au, 1.15% Cu, 0.14% Pb, 1.88% Zn and 12.6 g/t Ag from 708.4m (J34), including:
    • 19.5m @ 1.42 g/t Au, 1.81% Cu, 1.75% Zn and 12.3 g/t Ag from 716.6m
  • 42.1m @ 1.86 g/t Au, 0.71% Cu, 0.17% Pb, 1.26% Zn and 15.6 g/t Ag from 250.5m (J17), including:
    • 19.8m @ 3.12 g/t Au, 0.49% Cu, 0.31% Pb, 0.57% Zn and 20.2 g/t Ag from 250.5m; and
    • 19.2m @ 0.77 g/t Au, 0.96% Cu, 2.06% Zn and 12.0 g/t Ag from 271.9m
  • 26.9m @ 3.21 g/t Au, 0.48% Cu, 0.22% Pb, 0.69% Zn and 16.1 g/t Ag from 303.8m (J25)
  • 8.3m @ 7.07 g/t Au, 1.20% Cu, 0.81% Pb, 0.45% Zn and 56.2 g/t Ag from 158.6m (J2); and
  • 7.8m @ 4.88 g/t Au, 2.11% Cu, 0.47% Pb, 0.59% Zn and 35.6 g/t Ag from 100.6m (J1)

In 1981/82, Conoco was subject to a takeover offer, and sold its interests to Santa Fe Pacific Mining Inc. (“SFPM”).

In 1983 and 1984, SFPM drilled 18 diamond core holes from surface and nine underground holes. Further very encouraging results were returned, including:

  • 34.4m @ 3.11 g/t Au, 1.18% Cu, 0.62% Pb, 0.30% Zn and 48.1 g/t Ag from 170.1m (J52), including:
    • 2.4m @ 5.96 g/t Au, 2.51% Cu, 0.74% Pb, 0.22% Zn and 76.0 g/t Ag from 170.1m;
    • 1.8m @ 4.97 g/t Au, 1.92% Cu, 1.02% Pb, 0.12% Zn and 73.8 g/t Ag from 181.1m;
    • 3.4m @ 4.72 g/t Au, 2.81% Cu, 0.75% Pb, 0.29% Zn and 81.9 g/t Ag from 185.3m; and
    • 3.0m @ 4.99 g/t Au, 1.51% Cu, 0.76% Pb, 0.32% Zn and 56.2 g/t Ag Au from 198.4m
  • 14.2m @ 6.87 g/t Au, 1.72% Cu, 0.23% Pb, 0.89% Zn and 24.1 g/t Ag from 73.3m (J43), including:
    • 1.8m @ 9.89 g/t Au, 6.12% Cu, 0.56% Zn and 39.3 g/t Ag from 76.5m; and
    • 3.2m @ 14.02 g/t Au, 1.45% Cu, 0.56% Pb, 2.73% Zn and 44.5 g/t Ag from 82.1m
  • 19.5m @ 2.26 g/t Au, 1.50% Cu, 0.26% Pb, 2.42% Zn and 27.3 g/t Ag from 145.1m (J53) and
  • 14.9m @ 2.63 g/t Au, 0.93% Cu, 0.44% Pb, 0.30 % Zn and 32.5 g/t Ag from 124.4m (also in J53)
  • 8.8m @ 4.94 g/t Au, 1.24% Cu, 0.83% Pb, 0.21% Zn and 67.1 g/t Ag from 171.0m (J55); and
  • 10.7m @ 5.39 g/t Au, 0.27% Cu, 0.24% Pb, 0.06% Zn and 20.9 g/t Ag from 147.8m (also in J55)

Since 1984 only one (effective) diamond core hole has been completed at the project, in 1993. Negligible work has been undertaken since then.

Cross sections illustrating the mineralisation that has been delineated at the Jones Hill Deposit to date are presented as Figures 4 and 5; with the location of previous diamond core drilling illustrated in Figure 6.

Historic Mineral Resource Estimate

In 1981, Conoco calculated a Mineral Resource estimate based on the 39 diamond core holes (22,129 m) it had drilled to that time. The resource estimate comprised:

Table 1. Historic (1981) Mineral Resource estimate for the Jones Hill Deposit.

Zone

Tonnes

Au (g/t)

Cu %

Pb %

Zn %

Ag (g/t)

Upper

3,649,666

2.74

0.81

0.33

0.62

27.1

Lower

2,134,642

0.62

1.39

0.08

2.89

11.7

Total

5,784,307

1.96

1.02

0.24

1.46

21.4

For further details on the historic mineral resource estimate, refer to the Company’s ASX announcement of 9 April 2019.

Refer further below for details on the Company’s proposed work programs, which will include activities aimed at generating a mineral resource estimate for the Jones Hill Deposit in accordance with the JORC Code (2012).

Forward Work Plans

The Company intends taking a two-pronged approach to advancing the Tererro VMS Project, targeting:

  1. Rapid completion of work programs at the Jones Hill Deposit so that mine development can be advanced as quickly as practicable; and
  2. Aggressively exploring for the extensions of the Jones Hill Deposit and additional mineralisation at adjacent prospects, as discovery of any additional mineralisation is likely to enhance the economics of developing a mining operation at the Jones Hill Deposit.

Forward Plans – Advancing Development of the Jones Hill Deposit

Commodity prices, particularly those for gold and copper, have increased considerably since the most recent work was undertaken at the Jones Hill Deposit (1977-1993: from US$350-380/oz to US$1292/oz for gold today; and from US$0.65-US$0.75/lb to US$2.93/lb for copper today).  The Company believes this has had a significant positive impact on the economics of developing a mining operation at the Jones Hill Deposit. So the Company intends undertaking additional work in the near-term to help assess the potential project economics and to advance the development of the Jones Hill Deposit.

To do so, confirmatory and in-fill drilling will be required so that a JORC compliant Mineral Resource estimate can be completed and used as the basis of mine design work. Further metallurgical testwork and initial geotechnical work will also be undertaken.

Considerable baseline environmental data have been collected previously. The Company intends supplementing historical data by acquiring additional hydrological, cultural, flora and fauna data, so these can be incorporated into a mine permit application.

Forward Plans – Exploration
Globally, VMS deposits typically occur in clusters. The presence of the historical Pecos Mine together with the Jones Hill Deposit, only 8km away, confirms this is also the case at the Tererro VMS Project.

The Company has deliberately staked new claims so that it now holds a 100% interest in 4,300 acres that incorporate multiple under-explored VMS prospects immediately along strike from the Jones Hill Deposit (see Figure 2). Initial exploration targets include:

  • The Macho Prospect – where previous explorers delineated two massive sulphide targets. Only six shallow holes have been completed previously, with assay results including 3.5m @ 0.33% Cu, 0.68% Pb, 3.81% Zn and 9.9 g/t Ag. Following reviews, previous operators concluded that most of the previous holes were collared in the footwall of a massive sulphide feeder pipe and drilled away from the desired target;
  • The 9359 Hill Prospect – where a strong IP anomaly coincides with copper and zinc soil anomalies which are of higher tenor, and more extensive than soil geochemistry anomalies at Jones Hill (extending over >1,000m of strike); and
  • The Dalton Prospect – where multiple historical workings are evident in a vent-facies sequence of rhyolites that are highly prospective for VMS mineralisation. Highest grades of outcropping mineralisation are within the 290m-long Lisa Marie horizon, where a 2.1m rock chip sample averaged 5.1% Cu, 37.3 g/t Ag and 0.25 g/t Au.

The Company intends implementing exploration programs in the near term to:

  1. Delineate extensions to the Jones Hill Deposit; and
  2. Expand the Mineral Resource base by discovering additional mineralisation at adjacent prospects.

The discovery of additional resources will likely enhance the economics of developing a mining operation at the Project. The Company’s ultimate objective is to develop a centrally located processing facility that is fed by ore from multiple deposits, laying the foundations for the development of a significant new VMS camp.

During the 1980s, ground geophysical surveys (magnetics, electromagnetics (“EM”) and Induced Polarisation (“IP”)) were very useful in identifying and delineating the location and possible extents of mineralisation at the Jones Hill Deposit. EM and IP techniques have improved markedly since the 1980s – with both higher resolution and better depth penetration achievable today.

As a first step, the Company intends undertaking geophysical surveys of the Jones Hill area and immediate surrounds utilising CSAMT in the coming months, prior to commencing its maiden drilling program.