Pico Machay Project

Pico Machay, 1800 hectares in 5 mining claims.

Absolut Resources has acquired the option to earn 75 % of the Pico Machay Project from Monterrico Metals, an AIMS based company, by purchasing 100 % of Calipuy Resources. Calipuy Resources was a private Peruvian based company run by 3 Australian Expatriate Geologists who have extensive experience and contacts in Peru and other South American Countries.

Huancavelica province Peru. Approximately 450 kms south east of Lima. 13 degrees south, 75 degrees 20 minutes west.


Location Map (PDF)	Drill Hole Location Map All Locations	Pico Dome Zone of Gold Mineralization

DRILL SECTIONS
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Section 477575	Section 477600	Section 477650	Section 477775	Section 477800
Section 477900	Section 477925	Section 477950	Section 478000	Section 478050
Section 478075	Section 478100	Section 478125	Section 478150	Section 478175
Section 478200	Section 478250	Section 478300	Section 478350

GEOPHYSICS
Pico Drill Section 477800		Pico Resistivity Plan

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Nine hours by drive from Lima.

The Pico Machay Project is a high sulphidation gold system, located in South Central Peru within the Calipuy volcanics. It forms part of a series of deposit types, which are abundant in Peru and Chile and are amongst the most sought after gold projects in the world. A relatively recent recognition of the potential of these projects has most major gold companies exploring for them. They form a class of deposits, which are some of the largest low cost producers in the world.

To date 4 major high sulphidation gold deposits have been discovered in Peru. They have all been discovered or developed in the last 10 years. They include Yanacocha, 50 million ounces of gold in reserves and production costs at US $ 100 per ounce, Pierina with production costs of US $50 per ounce and the recent discoveries of Alto Chicama (7.0 million Oz Au) by Barrick and Rescatada by Anglo Gold (1.5 million Oz Au). All of these deposits occur within the Miocene Tertiary volcanics, except Alto Chicama, which occurs on the Tertiary unconformity. The oxide nature, easy cheap processing, and large size enables them to have large production at costs generally less than US $ 100 per ounce Au. The Liam deposit recently discovered by South Western Resources and optioned to Newmont is also a high sulphidation system.

Queenstake located the property in 1996 by the use of identifying clay alteration on TM satellite images. The project was acquired by Queenstake, then joint ventured to Newcrest Mining of Australia, who completed most of the previous work. To date a rudimentary geological map, rock chip sampling and the drilling of 8 drill holes, for 1848 meters, has been completed. Best results included a silica rich ridge, which measures 250 meters by 100 meters and averages 1.01 g/t Au from surface rock chip sampling. A drill hole beneath this ridge intersected 62 meters @ 0.8 g/t Au at a depth of approximately 50 meters. It should be noted that Yanacocha operated by Newmont Mining averages 1.0 g/t Au and produces approximately 3.0 million Oz of gold per year at under US $ 100 per ounce.

Overall the area sampled by rock chip sampling measures 1.0 kms by 1.4 kms. The average grade from sampling over this entire area is 0.43 g/t Au. Much of this area is covered by shallow cover and post mineral young volcanics. This area remains largely untested by drilling.

Following Newcrest's exit from Peru in 1998, the property option was purchased from Newcrest by Gietennes Exploration. Gietennes purchased all of Newcrest's properties in Peru. Thereafter, it was returned to Queenstake.

Monterrico Metals purchased all of Queenstake's properties in Peru in 2001, when Queenstake exited Peru. Due to Monterrico’s focus on the Rio Blanco Porphyry Copper project in northern Peru they decided to farm out all of their gold properties in early 2002. Calipuy Resources optioned the property from Monterrico Metals and subsequently was purchased by Absolut Resources.

The Pico Machay high sulphidation alteration system is hosted within lower Miocene volcaniclastics of the Castrovirrenya Group, which is equivalent to the Upper Calipuy of northern Peru in age and composition (NB. Both Yanacocha and Pierina are hosted within the felsic volcanics of the Upper Calipuy).

Several felsic volcanic units, which have the potential to host significant alteration and mineralization, occur within the stratigraphy at Pico Machay and are up to 100 meters thick. These felsic units occur within the 300m thick host volcaniclastics which have been altered varyingly to residual silica, silica alunite and silica kaolinite. The residual silica units form porous horizons within the greater volcanic package. The thickness of these porous felsic units indicates, that there is considerable potential to discover large zones of mineralization at Pico Machay.

The volcaniclastics are sandwiched between andesitic flows. The andesitic flows are extremely hard and impermeable and play host to mineralization along narrow structures and breccias. Seven hundred meters north east of the main zone of vuggy silica occurs in a zone of highly altered andesitic volcanics.

Regionally the volcanics strike northwest and dip at 25 degrees to the southwest. Within the zone of mineralization, bedding had been rotated to 80 degrees and the dip has steepened to about 50 degrees to the south.

Topographically the mineralized horizons outcrop on a main east-west trending ridge at the centre of the property. The residual silica units outcrop on the main ridge over a strike length of about 1km. Over the remainder of the approximately 2km strike length of the mineralization and alteration, residual silica is found as subcrop and scree on the south dipping slope of the main east-west ridge.

A drill program carried out by Newcrest in 1996 – 97 consisted of 8 holes, which were collared on the north side of the main ridge and angled to the south. Newcrest’s drill holes were collared in the silica alunite / silica kaolinite alteration located between the residual silica units, were drilled sub parallel to bedding and failed to intersect the residual silica units. Hole No.1 which was drilled underneath the main residual silica outcrop still managed to intersect 62m @ 0.8 g/t Au. This drill hole failed to test the main felsic volcanic unit, which hosts the vuggy silica and dips to the south.

Pico Machay has excellent size potential. Disseminated mineralization can be found over a strike length of 2km, a thickness of 300m and a down dip extension of somewhere between 300 to 400m.

Detailed Geology of Main Zone (206K)

Mineralization consists of disseminated low grade gold occurring within a high sulphidation package of quartz alunite. The mineralization has both a structural control and stratigraphic control. From mapping by Dan Noone it is evident that a porous rhyolite unit abutting the north east trending structure hosts mineralization. This unit dips beneath shallow volcanic cover to the south of the main outcropping zone of vuggy silica.

Independent Technical Report (PDF 4.6Mb)