GMV Minerals Inc. Acquires 100% Leasehold Interest in Mexican Hat Gold Property, Arizona
The Mexican Hat Property consists of 40 unpatented mining claims located in the SW ¾ of Section, township 19 South, Range 25 East, Turquoise Mining District, Cochise County, Arizona. Norman held its leasehold interest in the Mexican Hat Property pursuant to a mining property lease (“Lease”) entered into with Hernandez in December, 2002.
In consideration for acquisition of Norman’s interest in the Lease, the Company made a Cdn.$40,000 cash payment to Norman. In addition, Norman is to receive (i) 500,000 common share purchase warrants, with each warrant (a “Warrant”) entitling the holder thereof to purchase one common share in the capital of GMV (a “Share”) at an exercise price of Cdn.$0.10 per Share for a period of 24 months from the date of issuance, and (ii) 500,000 Warrants, with each Warrant entitling the holder thereof to purchase one Share at an exercise price of Cdn.$0.05 per Share for a period of 24 months from the date of issuance.
The Mexican Hat Property is subject to a 3% net smelter returns royalty (the “NSR Royalty”) in favour of Hernandez created pursuant to the terms of the Lease. The NSR Royalty is subject to a buy-back right pursuant to which 1.5% of the NSR Royalty can be purchased by the lessee in consideration of US$1,500,000.
Pursuant to the terms of the Lease, the Company will be required to make advance royalty payments to Hernandez in the amount of US$4,500, payable quarterly. In addition, the Company will be required to do and record sufficient assessment work, make annual filings, and pay taxes, fees and rents as required to maintain the Mexican Hat Property in good standing.
The Mexican Hat Property hosts a historic estimate of 5,234,000 tonnes grading 0.926 grams per tonne using a 0.345 gpt (0.01 ounce per ton) cut-off reported by M. Gray (1990) for Placer Dome US Inc. The resource was based upon indicator kriging of 82,134 meters of drilling in 120 RC holes and 17 diamond drill holes. This historic estimate is not reported in current classifications as Measured, Indicated or Inferred Resources however Proven, Probable, and Possible Reserves (not equivalent to NI 43-101 Proven, Probable, and Possible Reserves) are estimated from this data using a 45 degree pit, a 0.345 gpt cut-off and a 90% recovery resulting in a 183 meter deep pit and a 5:1 strip ratio, to yield 3,720,000 tonnes grading 0.960 grams per tonne containing 103,320 ounces of gold. No top-cut is reported. Roughly 50% more mineralization was believed to fall within this conceptual pit in sparsely drilled areas between mineralized domains (Gray, 1990). Subsequent work by others supports this assertion, however no additional resource work has been completed.
The structurally-controlled deposit defined by Gray (1990), hosted within volcanic tuffs and flows is exposed over an area of 300 meters by 300 meters, dominated by steep northeast-striking fractures and related breccias. Gold occurs in free-grains concentrated in intensely microfractured and brecciated zones up to 21 meters wide within the broader area. Work by subsequent operators has confirmed this trend, with additional drilling and surface sampling. The deposit is open along strike and to depth (below 274 meters).
Metallurgical studies reported by Gray (1990) show gold recoveries ranging between 82.8 and 97.4% in standard bottle roll testing.
The resources and reserves reported above are historical estimates, reported for completeness and are not NI 43-101 compliant mineral resources or reserves estimates. They have been calculated in industry standard form current as of the time reported (1990) and there are no concerns as to the sampling, assaying or resource methodology. GMV is not treating the historical estimate as current mineral resources or mineral reserves. No blanks were reported, but duplicate and repeat samples (10%) are acceptable for this level of work. Visibly unaltered or visibly unmineralized rock can yield very elevated gold grades and as such provides an opportunity to expand mineralization into areas that had not been sampled. Further work is needed to confirm the grade, distribution and metallurgy of the mineralization to determine and define a NI 43-101 compliant mineral resources estimate. The outcropping nature and near surface disposition of the resource combined with the local topography presents an opportunity for much of this work to be completed quickly and cheaply using a combination of trenching and drilling. The Historic Estimates reported here are not to be considered NI 43-101 Resources or Reserves.
Dr. D.R. Webb, B.A.Sc. (Engineering), M.Sc. Ph.D., P.Geol. is a qualified person within the meaning of NI 43-101, is independent of all parties to the Lease Assignment Agreement and is responsible for the technical details of this release. Dr. Webb has visited the property but has not completed sufficient work to determine an NI 43-101 Reserve or Resource. Dr. Webb has not completed sufficient work to verify the historic data, some of which cannot be verified as drill samples have been lost or disposed of.
Forward Looking Information
This press release contains forward-looking statements including with regard to planned exploration and metallurgical work Forward-looking information is subject to known and unknown risks and uncertainties, and depends on assumptions and other factors, all of which may cause actual results or events to differ materially from those anticipated in such forward-looking information. Undue reliance should not be placed on them. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way passed upon the merits of the transaction and has neither approved nor disproved the contents of this press release.
For further information please contact:
GMV Minerals Inc.
Tel: (604) 899-0106