RE: Week-end reading Sedar - here it isCANTEX MINE DEVELOPMENT CORP.
FORM 51-102F1
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED JULY 31, 2008
The following discussion and analysis, prepared as of November 27, 2008, should be read together with the audited
consolidated financial statements for the years ended July 31, 2008 and 2007 and related notes attached thereto, which are
prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). All amounts are stated in
Canadian dollars unless otherwise indicated.
Additional information related to the Company is available on www.cantex.ca or on SEDAR at www.sedar.com.
Forward Looking Statements
Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and
uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put
undue reliance on forward-looking statements.
Description of Business
The Company's principal business activity is the acquisition and exploration of mineral properties for commercial mineral
deposits and it is considered to be at the exploration stage. The Company has not yet determined whether any of its
properties contain ore reserves that are economically recoverable. The Company trades on the TSX Venture Exchange under
the symbol CD.
The Company’s primary project is located in the northwestern part of the Republic of Yemen where it owns an exclusive
Exploration License over a 698 km2 area and a prospecting permit for uranium covering an area of 3,876 km2. The second
project is in Nevada, USA where the Company has a 100% interest in 10 groups of gold exploration claims comprised of 485
claims.
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Performance Summary
The following is a summary of significant events and transactions:
Northwest Yemen
On November 20, 2008, the Company announced that Vale International SA (“Vale”), a wholly-owned subsidiary of
Companhia Vale do Rio Doce (NYSE: RIO, Vale), had signed a letter agreement for the Company’s Suwar, Wadi Qutabah
nickel, copper, cobalt and platinum group element projects in Yemen.
Vale’s minimum exploration commitment under the agreement is US $2 million to be spent prior to August 31, 2009. Vale
has the right to acquire up to a 60% interest in the mineral exploration licenses for Suwar and Wadi Qutabah through a series
of progressive expenditure and activity thresholds.
Vale may earn a 40% participating interest in the Suwar project if a prefeasibility study is completed on or before July 31,
2010, US $3 million is spent on the Suwar project and a US $1 million option payment is made to Cantex. An additional
11% can be earned by completing a feasibility study and a further 9% interest can be earned by financing mine development
and achieving commercial production. If Cantex’s share of mine development costs are carried through to production by
Vale, they are recovered by Vale as a development loan from 80% of Cantex’s share of profits.
The agreement also allows Vale to enter into a joint venture with Cantex on any other nickel, copper or cobalt bearing
property, including the Company’s Al Masna’a deposit, in Yemen. The obligations are similar for each individual property.
At the time of writing the agreement remains subject to acceptance by the TSX Venture Exchange.
Suwar Nickel, Copper, Cobalt, Platinum Project
The Suwar nickel, copper, cobalt, platinum project is located in the southern part of a layered basic igneous complex some
32 km in length and 8 km in width. The complex is dominated by gabbroic rocks and is thought to be of mid Proterozoic
age. The city of Sana'a lies some 50 km to the east-southeast.
Mineralization at surface occurs as a discontinuous series of gossan outcrops, often containing malachite, which occur along
a northeast trending zone nearly 3 km long. At least 1.1 km of this zone exhibits an UTEM response.
It has been determined from earlier drilling results that the mineralized zones are dominated by pyrrhotite with nickel being
contained mainly in pyrrhotite-pentlandite intergrowths and copper within chalcopyrite. The sulphides occur both as
disseminations and as massive bands. While only traces of platinum group metals have been found, only a small part of the
mineralized complex has been tested and there remains a possibility for discovery of significant PGE values. There is
insufficient drilling to calculate a resource but, based on the drill results and geology, the 2.7 km long discontinuously
mineralized zone is up to 140 metres wide and up to 30 metres thick. There is adequate room within this zone to contain a
world-class ore body. The mineralized zone is open in all directions.
An additional drilling program commenced August 14, 2007. Seventeen holes totalling 1,920 meters are planned to provide
additional detail at Suwar Hill and also to test for mineralization along the previously untested extension of the Suwar
massive sulphides. Four holes were complete as of January 20th 2008 and drilling of the remaining holes is currently
underway. This drilling is part of the work being conducted towards completing a pre-feasibility study on Suwar by July 31,
2010.
Wadi Qutabah Nickel, Copper, Cobalt, Platinum Project
The Wadi Qutabah nickel, copper, cobalt, platinum project is located in the northern part of the same-layered mafic complex
that hosts the Suwar nickel deposit (described above). It lies some 23 km north of Suwar and 60 km northwest of Sana'a.
At Wadi Qutabah, five iron sulphide horizons have been found within layered gabbroic rocks. These iron sulphide horizons
are conformable with the primary layering of the gabbroic rocks and occur over an area of 23 km2. The best exposed horizon
is the middle horizon and this can be traced in outcrop for more than 19 km. It is likely that the two lower horizons are of
similar dimensions but these are largely concealed. The two upper horizons are significantly eroded and are of limited lateral
extent.
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Based on assay results for composite chip samples taken from the exposed horizon, only traces of platinum group elements
were found in these samples but as strongly anomalous platinum occurs within drainage concentrates, there is a possibility
that the platinum rich part of the deposit has yet to be discovered. As platinum group metals and nickel can partition during
the intrusion of layered mafic complexes a drill program testing the vertically layered mafic complex to locate possible
platinum horizons was undertaken.
To test the continuity of the flat lying sulphide horizons five vertical holes totaling 685.84 meters were drilled. These five
holes intersected a total of 323.80 meters of weak (<10%) disseminated sulphides, 20.08 meters of moderate (10-50%)
sulphide mineralization and 6.80 meters of semi massive to massive sulphide mineralization. These mineralized sections will
be analyzed for nickel-copper-cobalt and platinum group elements. Cantex geologists are pleased with the extent and
continuity of the sulphide mineralization.
Six additional holes were drilled to identify the source of the high platinum group element values found in three heavy
mineral stream samples. The highly anomalous samples were from three adjacent streams draining a restricted portion of the
Wadi Qutabah area. The six holes were designed to test the stratigraphy of the watershed of the anomalous streams. Several
sulphide rich zones were intersected and these will be analyzed to identify anomalous platinum group element horizons.
Al Masna Nickel, Copper, Cobalt Project
The Al Masna’a nickel, copper, cobalt project is located in the Saadah region some 205 km north-northwest of the capital
city, Sana'a, and 25 km south of the border with Saudi Arabia.
Anomalous nickel and copper values have been found in heavy mineral concentrates in a number of heavy mineral samples
collected in the region while variably anomalous results for cobalt and platinum occur in follow up drainage, soil and rock
samples. Most of the anomalous values occur in an area underlain by layered gabbroic rocks. Soil surveying around a
mineralized drill hole at Al Masna’a identified several anomalous zones of copper, nickel, cobalt, platinum, palladium and
rhodium.
The evidence to date strongly suggests that the high nickel values discovered in the Al Masna drill hole are not an isolated
occurrence and that there is good probability of discovering extensions to this mineralized zone, as well as new zones of
nickel mineralization. The results of the sampling to date identify one or more zones of mineralization with a strike length of
at least 4.5 kilometers. The zone(s) is (are) open to the north.
Drilling is planned to test the IP, TEM and nickel soil geochemical anomalous zones in the Al Masna'a area with the
objective of determining the grade and distribution of nickel and copper in the iron sulphide horizons.
Al Hariqah Gold Deposit
The Al Hariqah gold deposit is located some 130 km northwest of Sana'a. It was discovered during follow up of anomalous
gold values found in heavy mineral concentrates.
Mapping and soil geochemistry have shown that gold mineralization occurs for a distance of nearly 4 km in two close,
parallel, north northwest trending zones. These zones are up to 50 metres wide.
Twenty eight reverse circulation drill holes, totalling 4,053 meters, were drilled into the northern 1,100 metres length of the
deposit. These holes show that the mineralization extends to at least 150 metres depth with several deep holes bottoming in
mineralization. The drilling suggests potential for a gold resource within the drilled area of 16 million tonnes at an average
grade of 1.65 g/t to 100 metres depth. Extrapolation of these data to the area covered by the mapping suggests potential for a
resource of 40 million tonnes at similar grades. However the deposit is open along strike, across strike and at depth so there
is potential to increase the tonnage available.
A drill program of 45 holes using the Company’s specialized core / percussion drill was conducted in late 2005 and 2006.
These holes were located to test the extension of the mineralization defined by the previous drill program as well as to test
the continuity of mineralization between holes. Results for these holes, as determined by fire assay at ALS Chemex, an ISO
9001:2000 accredited laboratory in Vancouver, were consistent with those of the previous drill program. The Company is
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most encouraged with the consistent results as they demonstrate the continuity of gold values within the Al Hariqah deposit.
The gold grades recovered are typical of those found in open pit mines.
Based on encouraging assay results of the work to date, the Company is committed to completing a pre-feasibility study at Al
Hariqah prior to July 31, 2010.
Naqub West Uranium Project
On February 28, 2007, the Company reported that it has acquired a new prospecting permit in Yemen containing numerous
indications of uranium. The new permit covers 3,876 km2 (1,514 square miles) in the Naqub West region, 195 km south
southeast of the capital, Sana’a. The area is well accessed by paved road.
The area was covered by an airborne radiometric survey flown by Geo-survey in 1985. This survey found a total of 133
uranium anomalies within the permit area. A uranium anomaly was defined as being greater than 6 standard deviations
above the background. Many of these anomalies have coincident thorium and/or potassium anomalies.
The Company intends to conduct an exploration program to test these uranium anomalies.
Nevada Project
Cantex has a 100% interest in seven mineral properties in Nevada.
A summary of the seven Nevada properties follows:
Baxter Springs
The Baxter Springs property comprises 16 claims covering 128 hectares. The property was once staked by the Dia Met –
Goldtex JV after the area was initially identified by a regional stream sediment sampling program. In 2004, two
geochemically anomalous zones in soils and rocks were defined. A gold-antimony-bismuth anomaly overlies a CSAMT
fault bounded resistivity high. As well, underlying a stratigraphically or structurally controlled arsenic-antimony-mercury
soil and rock anomaly, are two vertical, moderately resistive zones at depth. The target deposit type is structurally or
stratigraphically controlled gold, similar to the Midway deposit to the south. Permitting has been approved to drill four RC
holes [June 5, 2005].
Bruner
The Bruner property consists of 57 claims covering 477 hectares. The property was once staked by the Dia Met – Goldtex
JV to cover an area initially identified by a regional stream sediment sampling program. In 2004, a gold-mercury anomaly in
soils and rocks was delineated. The targeted deposit type is Tertiary volcanic hosted gold similar to that found in the district.
Carico Lake
The Carico Lake property comprises 71 claims covering 594 hectares. The claims were originally staked by the Dia Met –
Goldtex JV to cover an area anomalous in gold. The JV conducted a stream sediment sampling, soil and rock sampling, and
geological mapping program over the claim area. In 2004, the extent of a large arsenic anomaly in rocks and soils was
delineated. The target is a sediment-hosted gold deposit similar to that found in the Cortez Mining District to the east.
Gold Basin
The Gold Basin property comprises 42 claims covering 342 hectares. The claims were staked to cover an area anomalous in
gold in soils and rocks initially identified by a regional stream sediment sampling program. The Dia Met – Goldtex JV had
conducted stream sediment sampling, soil and rock sampling, and geological mapping within the present claim area. The
claims cover a felsic volcanic breccia which hosts the mineralization. The targeted deposit type is volcanic hosted
disseminated gold.
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Leonard Creek
The Leonard Creek property comprises 99 claims covering 828 hectares. The property was once staked by the Dia Met –
Goldtex JV after the area was initially identified by a regional stream sediment sampling program. A subsequent program of
rock sampling, soil sampling and geological mapping identified a structural setting favourable for the deposition of gold. In
2004, a CSAMT survey identified several targets, including buried structurally controlled resistivity highs and vertical
structurally controlled conductive zones. On other areas of the property, mapping has identified additional drill targets,
including areas of siliceous sinter and alteration. Permitting has been approved for 12 RC holes [May 20, 2005]. The
targeted deposit is gold in Tertiary volcanic rocks, similar to the Crowfoot deposit to the south.
North Fork
The North Fork property comprises 12 claims covering 100 hectares. The property was once staked by the Dia Met –
Goldtex JV. The area was initially identified by a regional stream sediment sampling program. Subsequent work included
rock and soil sampling, trenching, road construction, geological mapping and reverse circulation drilling. In 2004, a goldarsenic-
antimony-silver-mercury anomaly in rocks and soils, at least 200 meters long, was discovered. The target deposit is
a structurally and/or stratigraphically controlled gold deposit.
Weepah South
The Weepah South property comprises 54 claims covering 452 hectares. The property was once staked by the Dia Met –
Goldtex JV when the area was initially identified by a regional stream sediment sampling program. An induced polarization
geophysical survey carried out by the JV shows an anomaly which may reflect mineralization in Paleozoic rocks at depth.
The targeted deposit is a vein-like gold deposit up to 25 meters in width occupying a north to northeast trending shear zone,
similar to the Weepah Mine three kilometers to the north. Permitting and bonding are in place to drill four RC holes
[Permitting – October 26, 2004, Bonding – January 19, 2005].
Greenland
An agreement was reached on January 19, 2005 with Metalex Ventures Ltd. (“Metalex”) whereby the Company’s Greenland
properties were transferred to Metalex. Under the terms of the agreement, Metalex will fund exploration through to January
20, 2008. Cantex had the option to acquire a 25% interest in, not only the 2,669 km2 transferred to Metalex, but also
Metalex’s 100% owned 751 km2 license adjacent to the former Cantex licenses. This option was exercisable between
January 1st and 20th 2008 for a payment of $120,000. The Company elected not to exercise its option and has withdrawn