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Technical Report Summary of El Pato ReportThe El Pato Gold Property is located in the Department of Chiquimula, southeastern Republic of Guatemala. The property comprises the Special Mineral Interest License of El Pato, Number 0051, which was granted on January 7, 2000 by the Guatemala Direción General de Minería to Compañía Mineria el Cóndor, Sociedad Anónima (“CMEC”), a wholly owned subsidiary of Grand Cayman-based El Condor Resources. Python Oil and Gas Corp., of Vancouver, Canada, has entered into an agreement to purchase a 100% interest in the El Pato Property, subject certain royalties. These royalties include a 2.5% Net Smelter Return (“NSR”) payable to the Republic of Guatemala, and a 0.5% NSR payable to the Department of Chiquimula. The El Pato Property is located 5 kilometers (“km”) west the town of Chiquimula, the closest commercial center to the property, and approximately 110 km east of Guatemala City. Access on the property is via a series of paved and gravel roads from Chiquimula. A 20 person camp in the west central part of the property serves as a base for exploration activities. The El Pato Property lies in a tectonically active region between the Motagua and Jocotán Faults, which mark the suture zone between the colliding North American and Caribbean Plates. The property is underlain by the multi-phase Chiquimula Pluton, which was emplaced into Santa Rosa Group sedimentary strata. Unconformably overlying intrusive rocks of the Chiquimula Pluton are basalt flows and pyroclastic strata. Gold, with lesser silver mineralization on the El Pato Property lies within eight known zones of quartz-sulphide veining, stockworks and silicification hosted within dioritic to granitic phases of the Chiquimula Pluton. These zones, which are at varying stages of exploration, include the El Cerrito trend and the Agua Zarca, Hill 69, Mauricio, El Campimento, T-76, Tacó and Tacó Sur zones. The zones lie within a broad northeast trending arsenic in soil anomaly which measures 4 by 2 km and is open to the east. Past workers have interpreted an epithermal model for mineralization, however at this stage an intrusive related origin cannot be discounted. Two diamond drill campaigns, focusing primarily on the El Cerrito trend and Agua Zarca zone and totaling 5,833 meters in 65 holes, have been conducted by previous operators. Other work on the property includes excavation and sampling of 218 trenches, grid based soil surveys and rock and stream sediment sampling. Previous operators have estimated resources for both the El Cerrito Trend and Agua Zarca zone. These resource estimates were not calculated using recognized guidelines and the authors of this report have been unable to review work related to these estimations; as such they are not considered material to the current report. There is excellent potential on the El Pato Property to expand known zones of mineralization and to identify new zones, including high-grade precious metal veins amenable to underground mining and near surface, lower-grade mineralization amenable to mining by open pit methods. Given this potential, a staged, two-phase CDN$ 667,500 exploration program is recommended. The first phase includes compilation of historic property data in a GIS format, followed by detailed mapping to provide critical geological controls to mineralization, in conjunction with outcrop and trench sampling. The second phase program includes mechanical trenching and diamond drilling in key target areas. |
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