24th Jan 2005 07:00
Minco PLC24 January 2005 Minco plc Minco plc acquires gold and silver mining property in Mexico LONDON: Jan 24th 2005: AIM listed precious metals explorer and developer Mincoplc (Code: MIO) today announces that it has signed an agreement for theacquisition of a 50% interest in Minera Sisa SA de CV (Sisa). Sisa's principalassets are high grade gold and silver mining properties in the Sierra MadreMountains, 170 kilometres from Durango in Mexico. The agreement gives Minco a50% interest for US$2.4 million and a commitment to invest a further US$2.0million into the exploration and development of the property. It also givesMinco immediate control of the board of Sisa. Strategic Location The Sisa mining concessions cover an area of some 450 hectares and are locatedwithin the famous Sierra Madre Gold and Silver Belt of central Mexico, which hasrecorded production of over 40 million ounces of gold and one billion ounces ofsilver. Epithermal-style mineralization is found over an extensive area of 7 by3 kilometres and has a known vertical extent of more than 600 metres down dip.There are 6 known zones of mineralization on the Sisa property, associated withENE and NNW trending quartz vein systems containing bonanza grade silver andgold values. No systematic modern exploration work has ever been carried out. Long History of Small Underground Mining Small scale underground mines have been operated on the Sisa property for over100 years. Since 1967, a small family owned mine has operated at intervalsproducing gold, silver and copper. The property also contains the Zambranenamine, which produced gold and silver during the 18th century. From 1908 to 1914,the Santa Cruz Mining Company operated a mine on the property until the MexicanRevolution curtailed operations. Existing Small Underground Mine Access to the current underground mine is via a 220 metre deep near-verticalshaft accessing 17 levels. The mine is equipped with a 100 tonne a day processplant and trackless mining equipment, together with office, warehouse, dormitoryand canteen facilities. The mine is not currently in production and studies toassess the economics of reopening it and potentially expanding output will beundertaken. Substantial Inferred Resources An independent assessment of the property, carried out in 2002, indicated aresource potential of 10 million tonnes at average grades of 480 grammes pertonne of silver and 4.2 grammes per tonne gold, and with copper creditsequivalent to over 12 grammes per tonne gold. Within this resource are zonesshowing grades in excess of 1,000 grammes per tonne silver and 30 grammes pertonne gold. Resource tonnages and grade estimates cannot currently be classifiedto JORC standards and may change when classified to these standards. The Acquisition Agreement The remaining 50% interest in Sisa will continue to be held by the Salas family,which has been involved with the property since 1967. Following Minco'sinvestment of US$2.0 million in exploration and development of the property,further funding will be provided by the partners on a pro rata basis to theirshareholding. In the event one party elects not to, or fails to, contribute its pro rata shareof funding, the interest of the other party will increase by 1% for everyUS$160,000 contributed. Upon achieving 60% ownership in Sisa, Minco will issue1,000,000 shares in Minco and make a cash payment of US$100,000 to the othershareholder. Subsequently, for each US$240,000 invested in the project, 1% ofadditional equity in Sisa will be issued to the investing party. If Minco's interest increases to 70% a further payment of US$150,000 cash and1,000,000 Minco shares will be made. Likewise at 80% interest - US$200,000 cashplus 1,000,000 Minco shares; 90% interest - US$250,000 cash plus 1,000,000 Mincoshares; and 100% interest - US$250,000 cash plus 1,000,000 Minco shares. Thecontract is conditional, inter alia, upon the transfer of certain propertiesfrom the joint venture partners into Minera Sisa. Matthew Dorman, CEO, stated "We have been evaluating a number of possible acquisitions in Mexico to add toour portfolio of precious metal projects but the potential to develop a majorore body at the Minera Sisa properties is well ahead of anything else we haveseen. Only small scale mining has been undertaken on the Sisa properties sincethe 1914 Mexican Revolution with no systematic exploration, using moderntechniques, carried out. Our initial field studies already show that the areahas excellent potential to host a large scale open pit operation in addition tothe bonanza grade vein systems. Sisa now has three immediate objectives; carryout programmes to qualify the resources, regional exploration programmes lookingfor major open pit deposits, and studies for the rehabilitation and expansion ofthe underground mine. Minco's technical personnel are already active on site.Our £4.5 million funding in December will allow us to develop Sisa rapidly whileenabling us to complete the bankable feasibility study at the Laguna Silvertailings project during the second quarter." For further information Matthew Dorman; CEO, Minco Tel: +44 (0) 207 947 3237 Email: [email protected] Roger Turner; Chairman, Minco, Tel +44 (0) 1273 495 500 E-mail: [email protected] Laurence Read / Leesa Peters, ConduitPR Tel:+44 (0) 207 936 9095 / +44 (0) 7979 955 923 MINCO is a precious metals development and exploration company traded on the AIMmarket in London. Code: MIO. www.minco.ie This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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