Mexican mine being acquired
Morgain Minerals Inc MGM
Shares issued 20,800,636 Apr 3 close $1.30
Mon 6 Apr 98 News Release
Mr Raymond Mongeau reports
The company has signed an option agreement with Ruben Rodriguez of Mexico
City, Mexico for the acquisition of a 100% interest in the San Francisco
silver-base-metal mine. The agreement calls for cash payments totaling
$230,000 over 27 months and a 3% nsr which the company has the option to
purchase for US$2.0 million.
The mine, formerly known as the Sierra Prieta, operated as a gold mine at a
rate of 500 tons per day at the turn of the century, closing in 1912 at the
time of the Mexican revolution. The mine has never re-opened.
Willard D. Pye, a registered consulting geologist in Arizona, reports in a
qualifying report dated November 13 1972 that he investigated the
base-metal-precious-metal mineralization exposed along a 730m (2400 ft)
long adit at the 245m (800 ft) depth level. On this level an internal
vertical three compartment shaft exists 360m (1180 ft) from the portal. The
shaft was sunk 90m (300 ft) to the 360m depth level. At the 305m (1000 ft)
depth level drifting along the mineralized shear was completed for a strike
distance of 215m (700 ft). Mr Pye reports results of underground chip
sampling across the mineralized zone in the shaft areas with the higher
grade sections reporting as follows:
Width Au Ag Pb Zn Mb Value
ft oz/t oz/t % % % US$
ton
11.0 0.011 14.6 14.2 8.3 0.76 317
7.0 0.026 1.2 8.5 8.6 0.78 212
19.0 0.027 9.2 6.1 12.6 0.75 291
9.0 0.019 10.2 5.5 5.9 0.17 172
Mr Pye reports that a block of ore in the proven and probable categories
totalling 225,000 tons with a value of $85/ton based on 1972 metal prices
exists between the 800 foot (245m) and the 1050 foot (305m) levels. He
states it is probable that the total ore reserve present may be several
times the fairly assured figure of 225,000 tons found in the restrictive
shaft area.
Preliminary metallurgical testing was conducted by the consulting mining
engineering firm of LJ Manning and Associates in 1967 on the oxide ore
which ties above the 335m (1100 ft) depth level. Tests done on the lead,
silver and molybdenum reported good recoveries. Testing was not done on the
zinc or gold.
Industries Penoles SA de CV, a large Mexican mining company reported in
1980 the following reserves and grades between the 245m (800 ft) and the
305m (1000 ft) depth levels:
Proven and Probable 123,750 tons
Possible 508,750 tons
Geological 487,500 tons
--------------
1,120,000 tons
Au Ag Pb Zn Mb Value
g/t g/t % % % US$
ton
0.3 211.0 3.95 8.17 0.19 167
CIA Fresnillo SA de CV, a large Mexican exploration company, drilled a
number of widely spaced drill holes (60-100 metres apart) in 1986 between
the 245 and 305m depth levels for a strike distance of 1200m (4000 ft) and
reported an estimated 1.0 million tons grading 2.0 g/t Au (0.07 oz/t) and
70.0 g/t Ag (2.5 oz/t) over a 2.84m (9.3 ft) width. No assays were reported
for lead, zinc or molybdenum. Vein sampling on surface as well as along the
245m (800 ft) adit indicates that three higher grade lenses exist with the
following results:
Length Width Range Au Ag
m m g/t g/t
200 4.4-5.6 2.3-4.1 0.08-0.14 27- 64
125 0.8-2.6 1.6- 8.4 3.4- 86
130 1.2-7.5 3.3- 9.7 4.5-9.0
Mr Pye states that about 1/3 of the mineralization above the 245m (800 ft)
depth level was mined only for its gold and silver prior to 1907. The
remaining 2/3 of the mineralization above this level or about 2.0 million
tons, will need to be sampled and assayed for its precious and base-metal
content. An estimated 1.0 million tons of tailings exist on the property.
An underground exploration program consisting of sampling all of the
workings for the purpose of outlining sufficient tonnage of high grade ore
in the proven and probable categories to justify production at a rate of
between 200 to 500 tons per day has been commenced.
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