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CORPORATE FOCUS
as at May 20th, 1998
Falcon Ventures International Corp. is a mineral exploration company listed on the Vancouver Stock Exchange (trading symbol: FNV) with a corporate focus on the acquisition, exploration and development of gold, copper and other mineral properties.
On March 31, 1997, Falcon announced the signing of an agreement to acquire up to 100% of the shares of KK Tan International Inc. and KK Tan International (Shaanxi) Inc. (two Canadian companies doing business in China). This acquisition includes joint ventures with several government departments and agencies in the People's Republic of China. The agreements concern advanced stage "gold and base metals" mining exploration projects, producing mines, plus an operational smelter. Under the terms of a management contract, Falcon will have full operational control of all, and will be operator, of these projects. Falcon will provide funding and technical expertise in order to upgrade and maximise the efficiency of these opportunities. The first project is in the Fenyi gold oxide deposit. A major trenching and sampling program has been completed, and an independently prepared environmental and engineering study has been finalised on Fenyi. Drilling is currently underway to establish the extent of mineralization and metallurgical studies are in process to determine the most economically feasible method of gold extraction. The mining and business licences for the Fenyi project have been issued and Falcon intends having this property in production within 12 months. A 2000 metre reverse core diamond drill program, consisting of approximately 25 holes commenced in April 1998. The second project is the Weinan City Smelter which has the capacity to produce 15,000 tonnes of lead, 20,000 oz gold, and 122,000 oz of silver annually. Falcon expects to net US$1 million per annum over the 20 year life of the agreement. A favourable independent metallurgical and economic feasibility report on the Weinan City Smelter was prepared for Falcon by H.A. Simons Ltd. The third significant project announced to date is the South Shaanxi Project in central China. Falcon's due diligence exploration uncovered a zone of highly anomalous gold (averaging 3.5 gm/tonne or 0.1 oz/ton) which extends over 3 km in length and varies in width from 20m to over 100m. Previous work done by the Chinese in the western part of the property has identified and defined (by Chinese standards) a "reserve" of approximately 100,000 oz gold. Dr. David Bailey, Falcon's Director of Exploration, now thinks that the South Shaanxi project has the potential to contain a significant deposit amenable to vat or heap leaching. With this highly strategic move into China, Falcon is confident it will soon become a gold producer.
In 1994, Falcon acquired an option to earn a 51% working interest in the Queen of the Hills gold mine located near Salmon, Idaho. This mine has historical gold production of 75,000+ oz. of gold with an average ore grade of between 0.25 to 0.40 oz. Au per ton. The mine has about 6,000 feet of existing underground workings which are in good condition and permit immediate underground exploration and mining access As operator of the project, Falcon, in 1996, completed a Phase I reverse-circulation drilling program comprised of six holes totalling 3,250 feet. One hole returned 35 feet of 0.208 oz./ton Au, including five feet at 0.705 oz./ton Au, and ten feet of 0.496 oz./ton Au. Another hole intersected a wide auriferous quartz stockwork zone at depth to the east of the Queen of the Hills vein. Based on these favourable results further drilling is planned.
Management believes that by acquiring high-grade, low-cost gold producers, a substantial reserve can be established, leading to early cash flow and potential shareholder dividends which, based on the potential of Falcon's Chinese and North American interests, make its shares an attractive speculative acquisition.
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