Three Claims Encompass potential Down Dip and Strike Extensions of High Grade Mineralization
VANCOUVER, Sept. 8 /CNW/ - Capstone Mining Corp. (CS: TSX) today announced that it and its wholly owned subsidiary, Capstone Gold SA de CV, have entered into a definitive agreement with Golden Minerals Company (AUM:TSX) of Golden Colorado whereby Capstone Gold will acquire three mineral claims immediately adjacent to its Cozamin Mine in Zacatecas State, Mexico. These three claims encompass potential down dip and strike extensions of the mineral resources and mineral reserves in the principal San Roberto area of the mine, as well as the down dip extension of the San Rafael area. The mineral resources and mineral reserves for each of the San Roberto and San Rafael areas are detailed in a news release dated June 1, 2009.
"The acquisition of these three mineral claims immediately adjacent to the Cozamin Mine provides some immediate opportunities for the discovery and definition of additional mineral resources and mineral reserves," said Stephen P. Quin, President & COO of Capstone. "Given the proximity to some of the best mineralization in the San Roberto deposit and the development currently in process in that area, we will begin evaluating this potential shortly. The potential of these claims to host down dip extensions of the San Rafael and the San Roberto mineral resources is an added bonus that we will look to evaluate going forward."
Mineral Claims Acquired
The three mineral claims acquired (San Francisco, Santa Rita and La Esperanza) lie within Capstone Gold's current mineral holdings at the Cozamin Mine and immediately north of the current mining areas. Because the principal Mala Noche vein, which hosts all of the currently known mineral resources and mineral reserves, dips north, the Mala Noche vein crosses on to these claims below the current mineral resources and reserves. Sections identifying the location of these claims relative to the existing mineralization can be accessed on Capstone's website at http://capstonemining.com/s/CozaminPhotos.asp.
Capstone Gold has drilled down to the boundary of the San Francisco and Santa Rita in the San Roberto area of the Cozamin mine which hosts the majority of the mineral resources and all of the mineral reserves contained in the June 1, 2009 news release. There is potential for continued down dip extensions of the San Roberto mineralization on to these two claims. However, the principal near term potential for mineral resource and mineral reserve additions lies on the La Esperanza claim, which lies immediately east and on strike of the highest grade and widest copper-silver mineralization in the San Roberto area and immediately down dip of the zinc-silver rich San Rafael mineral resources.
Development of the wide, high grade areas (typically 20m to as much as 35m wide and grading better than 2.5% copper) in San Roberto is currently in process and this acquisition will allow current development to be extended along strike into the La Esperanza claim to determine its potential to host immediate mineral resource and mineral reserve extensions. In addition, the San Rafael area was drilled in 2008 evaluating this area for potential down dip extensions of zinc-silver rich mineralization in the historic San Rafael shaft area, which drilling successfully outlined the mineral resource outlined in the June 1, 2009 news release. However, the most encouraging aspect of this was that the mineralization at San Rafael appears to be transitioning to higher copper grades at approximately the same elevation as occurs in the San Roberto area. As a result, there may be potential for the discovery of copper-rich extensions down dip of the current San Rafael mineral resources, eventually extending on to the La Esperanza claim. In order to test this latter potential, development of a drift is currently in progress to (a) evaluate the higher copper grade portion of the current San Rafael mineral resource and (b) provide drill platforms for the evaluation of down dip extensions to the San Rafael mineral resource.
The three mineral claims are being acquired from Minera Largo S de RL de CV, a wholly owned subsidiary of Golden Minerals Company (AUM: TSX). The purchase price comprises (a) an upfront payment of US$1.0 million (paid) and (b) future cash payments of a net smelter return of 1.5% on the first one million tonnes of production from the acquired claims and (c) cash payments equivalent to a 3.0% net smelter return on production in excess of one million tonnes from the acquired claims. The net smelter return on production in excess of one million tonnes also escalates by 0.5% for each US$0.50 increment in copper price above US$3.00 per pound of copper.
Completion of Transaction
Definitive agreements have been executed and the initial cash payment of US$1.0 million paid. Transfer of the title to the acquired claims will be completed shortly.
Capstone Gold will likely begin evaluating the potential of the La Esperanza claim to host extensions of the wide, high grade San Roberto mineralization in the latter part of 2009 by extending the development currently in process in the area, while the potential for down dip extensions of the San Rafael mineralization will likely commence in early 2010, on completion of the development currently in progress in the San Rafael area.
The TSX does not accept any responsibility for the adequacy or accuracy of this press release.
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 and reviewed by Stephen P. Quin, P. Geo., President & COO for Capstone Mining Corp., Bob Barnes, P.Eng. Vice President, Operations - Mexico with Capstone Mining Corp. and Hugh Willson, P.Geo. Vice President, Exploration (Mexico) with Capstone Mining Corp.
This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (the "Company") does not intend, and does not assume any obligation, to update these forward-looking statements.
Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
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