~~> TF Draft Pick TRGD's news drought is over. lol
Definitive Agreement Signed to Acquire the Lluvia De Oro Gold Property
Dec 1, 2006 9:00:00 AM
TORONTO, Dec. 1 /CNW Telbec/ - Columbia Metals Corporation Limited (TSX-V - COL "Columbia") and Tara Gold Resources Corp. (Other OTC: TRGD.PK, Frankfurt: T8N "Tara Gold") are pleased to announce the following:
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(i) Columbia has entered into a definitive agreement ("Agreement") with
Tara Gold to acquire all mining, surface and water rights and all
assets of the Lluvia de Oro gold property, more particularly set
out below (the "Lluvia Property") from Tara Gold, the optionee and
Atotonilco Contrucciones, S.A. de C.V. of Mexico (the "Vendor");
(ii) Columbia has paid Tara Gold US$150,000 upon signing of the initial
letter of intent and made additional payments of US$837,500 and
agrees to make further payments of US$3,500,000 by December 1,
2008;
(iii) Subject to regulatory approval, Columbia will also issue
1,000,000 common shares of Columbia to Tara Gold;
(iv) Columbia will acquire all interests in and to the Lluvia Property
upon making the final payment to Tara Gold; and
(v) Tara Gold will receive a 20% net cash flow interest ("NCF") in the
Lluvia Property, however Columbia will have a right to purchase all
of Tara Gold's NCF interest in the Lluvia Property for a period of
24 months from the date of approval of this transaction by the TSX
Venture Exchange, for a payment of US$250,000 for each 1% for a
total of US$5,000,000 for all of Tara Gold's NCF interest in the
Lluvia Property.
The Lluvia Property is located in Sonora, Mexico, and is comprised of the
following four mineral claims:
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No Lot Number Title File Surface
Number
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I Lluvia de Oro 192050 321.1/4-746 5.5317 Hectares
II Lluvia de Oro, No 2 195124 321.1/4-581 100 Hectares
III Sahuara, I "A" 201469 4/1.3/1161 479 Hectares
IV Sahuara, I Dos 210805 4/1.3/1301 4.4684 Hectares
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No Type of Location Sub-Agency
Concession
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I Exploitation Magdalena, Sonora Hermosillo, Sonora
II Exploitation Magdalena, Sonora Hermosillo, Sonora
III Exploitation Magdalena, Sonora Hermosillo, Sonora
IV Exploitation Magdalena, Sonora Hermosillo, Sonora
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Upon completion of the acquisition of the Lluvia Property, Columbia will
control the contiguous mineral rights to some 60 square kilometres in the
immediate vicinity of the deposit.
Mine History
Located in the state of Sonora, in northern Mexico, Lluvia de Oro was
designed as a large tonnage, low-grade gold operation. The property currently
includes one open pit, two heap leach pads and a gold recovery plant. Under
Great Lakes Minerals Inc. the facility entered into production in May 1996,
and was later operated by Santa Cruz Gold Inc. ("Santa Cruz") and finally by
Compania Minera Lluvia de Oro S.A. de C.V.
The mine had an anticipated average production rate of 25,000 ounces per
year from an initial reserve of 4.6 million tonnes grading 0.82g Au/t or
121,000 ounces. Santa Cruz had projected that the life-of-mine cash costs for
the Lluvia de Oro Gold Mine would be in the range of US$235 per ounce.
Mining & Exploration
During 1997, 1.65 million tonnes of ore, with an average grade of
0.75g Au/t were mined and placed on the pad at an average cash cost of US$3.76
per tonne. As a result of El Nino, the project area received twice the average
annual rainfall. Production for 1997 was 20,688 ounces versus the projected
25,000 ounces. Cash costs averaged US$299 per ounce, which was US$79 higher
than the projected US$220 per ounce. The cash cost overrun was not only due to
the shortfall in production but also due to increased mining (an extra
320,000 tonnes of ore were placed on the heap in an attempt to offset the
negative impact of the excess rains). Operating costs per tonne were
effectively reduced since start-up, when the crushing circuit was eliminated
and the mine transformed into a run-of-mine operation.
Santa Cruz completed a drilling program in the 2nd quarter 1997
successfully expanding the existing proven reserves* by more than 60%. This
6,100metre drill program was successful in adding 2.1 million tonnes grading
0.81g Au/t or 54,400 oz. Additional lower grading material, which may be mined
and leached later in the mine life, added another 9,500 oz for a total of
64,000 oz. These reserves were defined along 300 metres of strike from the
limit of the current open-pit.
The new reserves* increased the proven reserves* to 4.7million tonnes
grading 0.81g Au/t, representing an increase of 64%. In addition to adding
mine life to the operation, the reserves discovered in 1997 allowed for an
increase in production scheduled for 1998 to approximately 28,000 ounces.
Drilling delineated an additional higher-grade resource* of approximately
4.5 million tonnes grading 0.95g Au/t along the same structure. Highlights
from the drill program include three holes, all of which ended in "ore" and
appear to have intersected a deeper, higher grading zone. These holes include:
hole L188, located approximately 60 metres on strike from the pit limits,
which intersected 15.2 metres grading 2.3g Au/t;
hole L194, on the next section, intersected 19.8 metres grading 1.8g Au/t;
and
hole L202, approximately 200 metres from the current pit along strike,
intersected 7.6 metres grading 3.8g Au/t.
A deeper drilling program comprised of six holes was completed in the 3rd
quarter 1997. Four of the six holes intersected good values including hole
L239 which intersected 30metres grading 1.5g Au/t, hole L240 which intersected
14metres grading 1.62g Au/t, hole L241 which intersected 39 metres grading
2.29g Au/t and hole L242 which intersected 18 metres grading 1.33g Au/t.
Cautionary Note: The tonnages, grades, assays, drill intercepts,
production figures and other technical data are taken from historical records
prior to the implementation of NI 43-101. While the data is believed to have
been acquired, processed and disclosed by persons believed to be technically
competent it is unverifiable at present. The data source for the Lluvia de Oro
is largely the 1997 Annual Report of Santa Cruz Gold Inc.
* The terms reserve and resource are as reported by Santa Cruz and do
not necessarily conform to NI 43-101 standards.
A qualified person as defined under NI 43-101 has not done sufficient work
to classify the historical estimate as current mineral resources or mineral
reserves. Columbia is not treating the historical estimates as current mineral
resources or mineral reserves as defined in NI 43-101 and the historical
estimate should not be relied upon.
Update on National Policy 43-101 Compliant Geological Report on the
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Lluvia Property
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The Company is currently in the process of conducting due diligence on the
Lluvia de Oro gold mine and our engineering team is reviewing options for
re-initiating mining, production, rinsing the leach pad and heap leach
processing. Columbia has completed a National Instrument 43-101 qualifying
report on the Lluvia Property by Rodney Blakestad, J.D., C.P.G, Qualified
Person and has submitted the report for acceptance by regulatory authorities
before filing the report on SEDAR.
Rodney Blakestad, J.D., C.P.G, Qualified Person reports the resources at
Lluvia:
"Exploration and Resource Status
Exploration of the Lluvia de Oro mine area is in an advanced stage with
264 exploration and resource definition drill holes comprising more than
26,000 meters of drilling. Work to date has identified two envelopes of
gold-silver-copper mineralization comprising the Upper and Lower Zones.
Mineral resources for the two zones are defined in a series of grade-tonnage
tables for a variety of gold cutoff grades. The Measured and Indicated
resources for the Upper Zone are shown in Table 1.1, while the Inferred
Resources for the Upper Zone are shown in Table 1.2. The resources are
reported for a cutoff grade of 0.4 g/t Au. The Measured and Indicated
resources at the 0.4 g Au/t for the Lower Zone are shown in Table 1.3, while
the Inferred Resources for the Lower Zone are shown in Table 1.4.
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Cutoff UPPER ZONE MEASURED UPPER ZONE INDICATED
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g Au/t Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
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0.40 263,000 0.693 5,860 2,130,000 0.632 43,280
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Cutoff UPPER ZONE M + I
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g Au/t Tonnes g Au/t Oz. Au
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0.40 2,390,000 0.639 49,101
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Table 1.1: Measured and Indicated Resources - Upper Zone.
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Cutoff UPPER ZONE INFERRED
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g Au/t Tonnes g Au/t Oz. Au
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0.40 3410000 0.588 64,465
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Table 1.2: Inferred Resources - Upper Zone.
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Cutoff LOWER ZONE MEASURED LOWER ZONE INDICATED
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g Au/t Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
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0.40 25,000 1.328 1,067 480,000 1.17 18,056
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Cutoff LOWER ZONE M + I
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g Au/t Tonnes g Au/t Oz. Au
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0.40 636,000 1.025 20,959
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Table 1.3: Measured and Indicated Resources - Lower Zone.
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Cutoff LOWER ZONE INFERRED
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g Au/t Tonnes g Au/t Oz. Au
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0.40 5760000 0.716 132,595
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Table 1.4: Inferred Resources - Lower Zone.
A resource analysis of the existing leach pad indicates that 30,100 ounces
of gold remain in 2,921,000 tonnes of rock materials placed on the pad between
1996 and 1998. Mineral Resource calculations show that an Indicated Resource
of 10,926 ounces of gold are contained in 640,000 tonnes within 7.0 meters of
the surface of the northeast end of the leach pad, as set forth in Table 1.5.
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LEACH PAD - NE END LEACH PAD INDICATED TOTAL M + I
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Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
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0 0 0 640,000 0.531 10,926 640,000 0.531 10,926
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LEACH PAD INFERRED
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Tonnes g Au/t Oz. Au
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725,600 0.378 8,818
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Table 1.5: Summary table of Mineral Resources for the Lluvia de Oro leach
pad."
This press release was prepared by J. E. Steers, Q.P.P. Eng. VP
Exploration, Columbia Metals Corporation Limited.
Forward-Looking Statements: Except for statements of historical fact, all
statements in this new release - including without limiting, statements
regarding future plans, objectives and payments are forward-looking statements
that involve various risks and uncertainties.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
>>
----------------------------------------------
Columbia Metals Corporation Limited: Carl Di Placido
President
(416) 364-6799; Tara Gold Resources Corp.: Francis R. Biscan Jr.
President
(630) 462-2079; Renmark Financial Communications Inc.: Barbara Komorowski
bkomorowski@renmarkfinancial.com; Fabrizio Franco
ffranco@renmarkfinancial.com
(514) 939-3989
Fax : (514) 939-3717; www.renmarkfinancial.com
GodBless-ND
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