Continuum to acquire 80% stake in deposits in Mexico
Continuum Resources Ltd CNU
Shares issued 12,095,318 Sep 8 close $0.33
Tue 9 Sept 2003 News Release
Mr. Lawrence Dick reports
CONTINUUM OPTIONS HISTORIC SAN JOSE AG-AU DEPOSIT AND OTHER EXPLORATION
LANDS IN THE TAVICHE EPITHERMAL AG-AU DISTRICT, OAXACA, SOUTHERN MEXICO
Continuum Resources has signed a binding letter of intent with Minerales de
Oaxaca, S.A. de C.V. (Mioxa), an arm's-length party, to acquire up to an
80-per-cent interest in the past-producing San Jose epithermal silver-gold
deposit, as well as other exploration concessions in the nearby Taviche
silver-gold district, all located in the state of Oaxaca, Mexico. Historic
production at the San Jose mine was from structurally hosted mineralization
which graded in the range of 400 to 600 grams per ton silver, and three to
five grams per ton of gold, although much higher grades occur. Limited
sampling carried out by Continuum on the lowest level of the San Jose mine
returned gold values ranging between 10.0 and 33.1 grams per ton of gold,
and between 1,790 and 5,940 grams per ton of silver (three samples).
Silver-gold mineralization at San Jose is open to depth, and along strike,
from historically mined sections. The nearby Taviche claims host several,
past-producing deposits, which similarly have depth, and on-strike,
potential. An aggressive exploration program is planned to identify new
silver-gold resources both at San Jose and Taviche, by exploring to depth,
and along strike from known mineralization.
Under the terms of the agreement, Continuum can earn an 80-per-cent
interest in both projects by making cash payments totalling $2.82-million
(U.S.) over a period of six years. A cash payment of $40,000 (U.S.) is due
on signing, with first and second anniversary payments being $100,000
(U.S.) and $200,000 (U.S.) respectively. Remaining cash payments are spread
over the subsequent four anniversaries of the option period. Additionally,
the agreement calls for the issuance of a total of 2.1 million shares of
Continuum to the vendor: 150,000 on signing; 150,000 after the first
anniversary; 200,000 after the second anniversary; and the balance over the
ensuing four-year period. Continuum has the right to terminate the option
at any time.
Continuum also commits to expend a minimum of $1-million (U.S.) in
exploration, consisting of minimum expenditures of $100,000 (U.S.) during
the first year, and $150,000 (U.S.) during the second year.
A 50,000-share finder's fee will be issued in relation to this agreement.
The property
Two groups of claims are included in the agreement: 702 hectares covering
the past-producing San Jose del Progreso low-sulphidation, epithermal Ag-Au
deposit (San Jose); and a second group comprising 479 hectares, which
covers a significant portion of the nearby Taviche Ag-Au district. The
Taviche district is located 43 kilometres south of the city of Oaxaca and
both Taviche and San Jose are accessible by paved highway.
The San Jose mine operated intermittently from the late 1800s until 1942.
More recently, small-scale production began in 1991 when the current owners
acquired the property. Mineralization occurs in at least two veins, the
Trinidad and Bonanza veins, and an intermediate zone of brecciation and
stockworking. The Trinidad vein averages approximately 2.5 metres wide, and
locally reaches approximately 10 metres in width, while the Bonanza vein
has a variable width of up to four metres. While the veins can be traced on
surface for approximately three kilometres within the boundaries of the San
Jose property, mining has occurred intermittently over a strike length of
1.4 kilometres and to a depth of only 130 metres below the surface.
Existing records at the site indicate that the vein-hosted ore graded up to
20 grams per ton gold, and up to four kilos per ton silver, although
average grades were lower, in the order of 400 to 600 grams per ton silver,
and three to five grams per ton gold. Three samples collected from the
Trinidad and Bonanza veins from the lowest level (130 metres depth) during
a recent inspection by Continuum, and analyzed by ALS Chemex, gave the
following results:
Sample Gold Silver
Vein type (g/t) (g/t)
Trinidad Chip 33.1 5940
Trinidad Grab 19.6 4410
Bonanza Grab 10.0 1790
During 2001, two drill holes were completed under the existing workings.
The first hole (OCW-1) intersected mineralization approximately 10 metres
below the lowest workings. The second hole was drilled vertically beneath
the first, and intersected a narrower interval of mineralization. Assays of
the core from both holes were carried out by ALS Chemex and are summarized
as follows:
From To Int Gold Silver
(m) (m) (m) (g/t) (g/t)
OCW-1
172.5 198.1 25.6 3.25 436
includes
172.5 184.9 12.4 5.66 730
OCW-2
189.2 195.7 6.5 3.31 540
The Taviche claim block is located approximately 14 kilometres east of the
San Jose mine. Numerous, past-producing Ag-Au mines, hosting mineralization
of a similar style to San Jose, consist of underground workings to variable
depths below surface. The claims cover approximately three kilometres of
structurally controlled quartz veins, averaging between one and 2.5 metres
wide, which host the past-producing deposits. The mineralization was mined
during the Colonial period, and no known, modern exploration has ever been
carried out.
Exploration plans
Continuum plans to explore both properties with the initial objective of
identifying additional resources along strike, and to depth, near existing
and previously mined bodies. An initial phase of data compilation will
accompany confirmatory resampling of the lowest level at San Jose and
accessible parts of the Taviche deposits. Diamond drilling, both from
surface and underground, is planned as a second phase of exploration once
geological controls on known mineralization are better understood.
Continuum has assessed additional advanced stage projects in Mexico and
will be expanding its focus to include further acquisitions in Mexico in
the near future.
The qualified person for this project, in accordance with National
Instrument 43-101, is Lawrence Dick, PhD, PGeo. Additional assistance in
the field, including sample collection, was provided by Chris Osterman,
PhD, registered professional geologist in the state of Arizona. |
