TORONTO (miningweekly.com) – Canadian gold producer Centerra Gold has started an exploration campaign at TSX-V-listed Millrock Resources’ Los Chinos and Los Cuarentas gold projects in Sonora State, Mexico.

The two companies had on March 30 announced an option-to-joint-venture agreement under which  Centerra could earn a 70% interest by completing $5-million in exploration expenditures over a five-year period at Los Chinos, and $2-million at Los Cuarentas.

According to Millrock, a comprehensive programme of geological mapping, soil sampling and rock sampling with parallel magnetic and gradient induced polarisation (IP) geophysical surveys were being conducted at at Los Chinos. Early soil sample results had shown that the El Camino zone was of a greater extent than initially indicated by previous work.

Anomalous gold, lead and arsenic had been detected over an area measuring 700 m long and up to 500 m wide.

Millrock advised that resistivity highs from the IP survey seem to correlate with anomalous soil results. Mineralised quartz veins were also exposed at surface.

The partners had applied for permits to carry out trenching and drilling and they expected imminent approvals.

The Los Chinos property is located about 50 km south of the San Francisco gold mine, which is operated by Timmins Gold. The Los Chinos property is in a very similar geological setting as the San Francisco mine and is prospective for mesothermal, orogenic gold deposits. Three zones of mineralisation had so far been delineated by Millrock, El Camino, La Tinaja and Albercas.

Meanwhile, Millrock's Los Cuarentas property was located immediately southwest of Yamana Gold’s Mercedes gold mine. A stream sediment sampling programme had been started, with the main focus of current exploration being at an area showing alteration typical of the upper levels of an epithermal mineralising system, Millrock advised.

While a shadow of uncertainty had been growing over its flagship Kumtor mine, Centerra had been geographically diversifying its portfolio, with development projects located in Mongolia, Turkey and Canada. Centerra, which in 2015 produced 536 921 oz of gold, had on Tuesday handed a notice of international arbitration to the Kyrgyzstan government, where Kumtor is located, relating to several outstanding environmental and legal issues.