Mercator Gold plc: Update on Evaluation of Copper Flat Project, New Mexico, USA
Mercator Gold plc: Update on Evaluation of Copper Flat Project, New Mexico, USA
Mercator Gold Plc
Patrick Harford, Managing DirectorPatrick Harford, Managing Director
Tel:
+1 646 239 9087Tel:
+1 646 239 9087
+44 (0) 20 7929 1010+44 (0) 20 7929 1010
Email:Email:info@mercatorgold.com
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MERCATOR GOLD plc
(“Mercator Gold”, “Mercator” or “the
Company”)
AIM: MCR
US OTC: MTGDY
Mercator Gold plc is pleased to provide an update on its evaluation of the Copper Flat project, located in New Mexico, USA. Mercator holds an exclusive option over the Copper Flat project.
Highlights
- Two drill rigs mobilised to site; drilling to commence following receipt of minimum impact drilling permit from New Mexico Energy, Minerals and Natural Resources Department.
- Assaying of historic drill core and pulp residues underway; results so far show good conformity with historic drill results used for estimation of the project’s historic reserve of 45.5 million metric tonnes grading 0.45% Cu, 0.015% Mo, 0.15g/t Au and 2.25g/t Ag (cut-off grade 0.23% Cu).
- Assay results include 1.25% Cu, 0.01oz/t (0.31g/t) Au, 0.024% Mo and 0.13oz/t (4.04g/t) Ag over a 109.5 metre intercept and 0.64% Cu, 0.005oz/t (0.155g/t) Au, 0.017% Mo and 0.074oz/t (2.30g/t) Ag over a 246.6 metre intercept.
- SRK Consulting is directing work at Copper Flat in advance of the preparation of a Preliminary Economic Assessment of the project.
Update
The work programme being undertaken by Mercator at Copper Flat is designed to culminate in the completion of a Preliminary Economic Assessment (“PEA”) of the project by SRK Consulting (“SRK”).
SRK, along with Pincock, Allen & Holt (“PAH”) completed substantial work on the Copper Flat project from 1994 to 1999 on behalf of Alta Gold. During this period: a draft Environmental Impact Study (“EIS”); a formal Plan of Operations as directed by the Federal Bureau of Land Management and the New Mexico Energy, Minerals and Natural Resources Department; and formal audits of the historical reserve to satisfy Securities & Exchange Commission (“SEC”) requirements were completed.
Six HQ-sized drill-holes totalling approximately 6,000 feet are planned by Mercator at Copper Flat. These holes have been sited in relation to the planned open pit to provide data for grade control and more specific geotechnical confirmation and additionally evaluate the opportunity for resource expansion. Two drill rigs have been mobilised to site and drilling will commence on receipt of a minimum impact drilling permit from the New Mexico Energy, Minerals and Natural Resources Department. Refurbishment of the site office and core storage building is 80% complete. Electrical power has been restored and equipment and supplies for the planned drill programme have been delivered.
An important element of the work programme being carried out by Mercator at Copper Flat is the verification of data generated during historic drilling programmes. Mercator has identified and located a large amount of drill core and pulp residues from these programmes. Duplicate sample pulps from the reserve drilling programme carried out from 1975 to 1979 by Quintana Minerals are being recovered and inventoried. The pulps from ten selected holes (750 pulps) have been sent to be assayed for Cu, Mo, Au and Ag.
Assay results for two drill-holes (H75-08 and H75-17) have been received and are summarised in the tables below. These drill-holes are located in the central part of the historic reserve of 45.5 million metric tonnes grading 0.45% Cu, 0.015% Mo, 0.15g/t Au and 2.25g/t Ag (cut-off grade 0.23% Cu) that was mined by Quintana for 3.5 months in 1982. The two holes are approximately 260 feet (80 metres) apart.
The first Quintana drill-hole submitted by Mercator for check assaying was H75-08, an NX-sized, vertical drill-hole. The original core was split with half going to assay. Later Quintana assayed the second half of the core for comparison. The results were sufficiently divergent that Quintana changed its sample preparation procedure and consumed the entire core for assay.
Mercator took the pulps from the two halves of drill-hole H75-08 and submitted them to Skyline Labs of Tucson, Arizona, USA to be assayed for Cu, Mo, Au and Ag. Assay results for these two sets of pulps are labelled H75-08A and H75-08B in the table below.
Drill-hole H75-08 averaged 0.63% Cu and 0.02% Mo over 809 feet (246.6 metres) according to the Quintana assays. The Skyline results for the entire drill-hole match Quintana’s within 2%. According to the Quintana results, there is a continuous 609-foot (185.7 metres) interval (21’ to 630’) grading 0.82% Cu and 0.02% Mo. Skyline’s results for the same interval averaged 0.815% Cu and 0.021% Mo, a difference of less than 3%. Within this 690-foot interval there was a high grade, continuous, 359-foot (109.5 metres) interval reported as 1.27% Cu and 0.029% Mo by Quintana. Skyline’s results for the same 359-foot interval were 1.245% Cu and 0.026% Mo. The difference in copper grade between the assays of Quintana and Skyline of less than 3% is exceptionally low for grades of over 1% Cu.
Drill-hole H75-17 averaged 0.33% Cu and 0.017% Mo for the entire drill-hole (802 feet or 243.8 metres) according to the Quintana assays. Skyline’s results for the same interval are 0.36% Cu and 0.014% Mo. In this case, the difference in copper grade between the Quintana and Skyline assays is an acceptable 10%. There is a continuous 407-foot (124.1 metres) interval (13’ to 420’) of 0.39% Cu and 0.019% Mo according to the Quintana results. The Skyline results gave 0.43% Cu and 0.017% Mo over the same interval. Again, the difference in copper grade between the Quintana and Skyline assay results is acceptable at less than 10%.
Assay results for the additional eight holes are pending. The initial results indicate exceptional reproducibility of the Cu and Mo grades and intercept thicknesses used in the PAH ore reserve audit of 1998.
| HOLE # | INTERCEPT | ELEMENT | RESULTS | |||||||
| feet | Quintana | NMCC* | NMCC* | |||||||
| 1975 | Skyline 75-08A | Skyline 75-08B | ||||||||
| H75-08 | 809’ (entire Hole) | Cu | 0.63% | 0.64% | 0.63% | |||||
| 246.6 metres | Mo | 0.02% | 0.017% | 0.022% | ||||||
| Au | na | 0.005oz/t | 0.005oz/t | |||||||
| Ag | na | 0.074oz/t | 0.07oz/t | |||||||
| 359’ (21-380’) | Cu | 1.27% | 1.25% | 1.24% | ||||||
| 109.5 metres | Mo | 0.029% | 0.024% | 0.028% | ||||||
| Au | na | 0.01oz/t | 0.01oz/t | |||||||
| Ag | na | 0.13oz/t | 0.13oz/t | |||||||
| 609’ (21-630’) | Cu | 0.82% | 0.82% | 0.81% | ||||||
| 185.7 metres | Mo | 0.020% | 0.02% | 0.024% | ||||||
| Au | na | 0.006oz/t | 0.006oz/t | |||||||
| Ag | na | 0.09oz/t | 0.09oz/t | |||||||
| H75-17 | 802’ (entire hole) | Cu | 0.33% | 0.36% | ||||||
| 243.8 metres | Mo | 0.017% | 0.014% | |||||||
| Au | na | 0.004 oz/t | ||||||||
| Ag | na | 0.081 oz/t | ||||||||
| 407’ (13 to 420’) | Cu | 0.39% | 0.43% | |||||||
| 124.1 metres | Mo | 0.19% | 0.17% | |||||||
| Au | 0.005oz/t | |||||||||
| Ag | 0.11oz/t |
*New Mexico Copper Corporation (“NMCC”) is a wholly-owned subsidiary of Mercator Gold plc.
Managing Director, Patrick Harford said: “Mercator is making real progress at Copper Flat, The recovery of the duplicate drill samples and their conformity to the historic assay values has “made new” an extremely valuable database over 150 drill holes, and over 30,000 metres of drilling are being validated by the Company. This will help the Company achieve its objectives of adding great value to what we believe is a robust project.”
Option Terms
Mercator holds an exclusive option over the Copper Flat project. In order to exercise this option, Mercator would make payments to the vendors as follows: US$1m by February 14, 2010; US$1.85m by August 14, 2010; and US$7m by February 14, 2011. All the payments are discretionary, and Mercator can elect not to proceed with the exercise of the option at any stage. The final payment may be deferred until May 16, 2011 for an additional payment of US$150,000. The vendors would retain a net smelter return (NSR) of 3.25%.
Mercator Gold is a London AIM listed diversified mining investment company with quality assets and the capability to undertake significant, value accretive transactions. The Company is dedicated to creating shareholder value through a process of finding value, adding value and realising value by accessing a pipeline of projects sourced from its global network. Mercator Gold has significant investments in New Mexico, USA, Thailand, Papua Province of Indonesia and Australia.
This announcement was reviewed by John R King and Mark I Pfau, both registered geologists and Qualified Persons under Canadian NI-43-101.
Notes to Editors:
About the Copper Flat Project
- Important infrastructure from previous mining operations remains in place at Copper Flat. A full pre-strip of the ore body has been completed, which along with the infrastructure in place represents a substantial proportion of the capital investment that would be required if the project were to be brought into production from scratch. Much of the groundwork necessary to obtain the permits required for a return of the project to production has been completed, and Mercator has access to highly qualified project-level management.
- The Copper Flat deposit has historical reserves of 45.5 million metric tonnes grading 0.45% Cu, 0.015% Mo, 0.15g/t Au and 2.25g/t Ag (cut-off grade 0.23% Cu), equivalent to 50.2 million short tons @ 0.45% Cu, 0.015% Mo, 0.14g/t Au and 2.04g/t Ag (cut-off grade 0.23% Cu).
- Extensive feasibility studies on the restart of production at Copper Flat were carried out during the 1980s by highly reputable technical consultants. The most recent Pincock, Allen & Holt plan for a resumption of production at Copper Flat envisaged the mining of 5.8 million short tons of ore and 2 million short tons of waste annually for 11.6 years. In order to restart production, a suitable processing plant would need to be procured and commissioned.
- Detailed metallurgical test work has been carried out, with flotation tests performed on drill core and a 6,000 short ton underground bulk sample. These consistently showed a recovery of 92% copper and the production of highly marketable concentrates with an average copper grade of 28%. The results of this test work were confirmed during actual production in 1982.
- The Copper Flat deposit appears to have excellent continuity and consistency of grade. It also has a low estimated stripping ratio of approximately 0.9:1, based on previous mining plans. Some 181 reverse circulation and core drill holes have previously been completed (equating to approximately 39,000m) along with approximately 300m of underground drifting.
This press release may contain "forward-looking statements", which are subject to various risks and uncertainties that could cause actual results and future events to differ materially from those expressed or implied by such statements. Investors are cautioned that such statements are not guarantees of future performance and results. Risks and uncertainties about the Company's business are more fully discussed in the Company's disclosure documents filed from time to time with the relevant UK authorities.
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