The principal features of the alteration system are the Ventana-Cotetoro and Hualtaco breccias, which are large bodies of pyritic, clay-altered and silicified breccia and the Cruz gold-silver bearing epithermal quartz vein system which has an apparent strike length of at least 3 km.
The property is rimmed by tuff and is underlain by porphyritic Porculla Volcanics, probably flows.  The central porphyritic complex hosts numerous extensive zones of silicification and clay alteration.  These are tabular to irregular in plan; with core zones of fine-grained, pyritic hydrothermal explosion breccia flanked by clay-altered, blocky breccia with patchy stockwork - controlled silicification.  More than 20 such breccia zones have been located on the property to date. The breccia bodies, two of which are nearly 1 km2 in area, have core zones, interpreted to be conduits or ‘flues’ for hydrothermal fluids, consisting of angular silicified fragments in an aphanitic silica-pyrite matrix.  These conduits appear to be breccia pipes within larger bodies of clay-altered, coarser textured breccia with variably silicified matrix and fragments.  All the breccia bodies on the property are considered to be the products of explosive, cyclical hydrothermal eruptions and belong to the phreatic-hydromagmatic class as defined by Sillitoe (1985).  No sinter has been found on the property, indicating that the present erosional surface is everywhere lower than the paleosurface existing at the time of the breccia formation.
The Cruz quartz vein/stockwork system contains individual quartz veins up to 6.5 m wide, although most of the exposures in the system consists of narrower quartz veins forming sheeted zones over widths up to several tens of metres.  The vein system is generally poorly exposed, and only the zones with thick, resistant individual veins form strong outcrops.  The individual veins are formed of milky white to greyish-white quartz, with and without iron oxides.  Typical open-space filling epithermal textures, including drusy cavities and colloform banding, are characteristic of the individual veins. A previous exploration program conducted from April to August 1996 consisted of reconnaissance geological mapping, prospecting, and rock, soil, and stream sediment geochemical sampling.  The work identified widespread erratically distributed gold and arsenic anomalies in the breccia bodies, and consistent gold values in the Cruz vein system.  The highest gold grade obtained from the breccia was 1.26g/t Au, but most anomalous samples are in the 20-60 ppb range.  Arsenic ranges up to 1,638 ppm, but most anomalous sample values are in the range of 40-100 ppm.  Gold in stream sediments ranges up to 56 ppb; multiple anomalies occur in the two major streams draining the property.

Chip samples from natural vein outcrops of the Cruz vein system returned consistent gold values in the 1.0-2.0g/t range across widths up to 8.0m.  The best assay received from the initial sampling was 3.82 g/t gold with 12.0 g/t silver across 5.0m.  Near the southeast end of the exposed section of the vein system, a series of samples of veinlet stockworks and altered volcanic wallrocks returned gold values of 52 ppb to 610 ppb, indicating a zone up to 130m wide in the hangingwall of the main vein containing anomalous gold.  The vein system is generally not well exposed so little information from the vein hangingwall and footwall was obtained during the initial exploration work. A more detailed program, consisting of detailed geological mapping, hand trenching and trench sampling, and diamond drilling was conducted between August 1996 and June 1997.  This was focused on the Cruz vein system; 91 trenches and eighteen drill holes totaling 1860.1m were completed.  The trench and drill results confirm that the Cruz vein system is a classic epithermal gold-silver deposit.

Gold assays from the Cruz vein drill program include 6.0m of 2.31 g/t from hole CB-01, 6.0m of 2.96 g/t, including 1.75m of 7.45 g/t from CB-03, 1.5m of 22.68 g/t from CB-05, 9.5m of 8.09 g/t, including 1.5m of 35.84 g/t from CB-17, 10.8 m of 2.4 g/t from CB-21, and 1.2m of 6.95 g/t from CB-22.  The vein intersections contain virtually no sulfides.  The vein system is open to the NS, SE and to depth.

The Ventana-Cotetoro breccia zones, which outcrop along a northwesterly trend 2 km NE of the Cruz vein system, contain scattered anomalous gold and arsenic values in bodies of rock that have been intensely altered by large volumes of hydrothermal fluids.  The fluid conduits are likely to have subvertical geometry and should be directly associated with the surface exposures of silica-pyrite on the Cerro Ventana and Cerro Cotetoro.  Epithermal models developed by Buchanan (1981), Berger and Eimon (1982), and others predict that precious metals will occur within a vertically restricted interval below hydrothermal breccias and argillized, silicified rocks close to or at the paleosurface.  The proposed model for Cueva Blanca that incorporates the Cruz vein system, the Ventana-Cotetoro breccias, and the classic epithermal work by Buchanan et al, and predictions that sheeted or stockwork vein systems, breccias and silicified wallrock zones containing precious metals may be present at depth in the Ventana-Cotetoro breccia systems.

Recommendations for further work at Cueva Blanca would include wide-ranging prospecting and rock geochemical sampling, detailed geological and alteration mapping, petrographic and mineralogical studies, and geophysical surveys including magnetic, gradient and dipole-dipole IP, and resistivity.  The reconnaissance work will focus on the Hualtaco breccias, SE extension of the Cruz vein system, and the Ventana Cotetoro breccia zone NW of Cerro Cotetoro.  The detailed geological and geophysical studies will initially be conducted on the large Ventana-Cotetoro breccia zones but will including other targets if the results of the reconnaissance work so warrant.  A Phase II program of diamond drilling will test targets defined by the first phase work.