Trevali acquires Santander mine in PeruTrevali acquires Santander mine in Peru
2007-12-20 16:58 ET - News Release
Mr. Anton Drescher reports
TREVALI ACQUIRES FORMER SANTANDER ZINC LEAD SILVER COPPER MINE, PERU
Trevali Resources Corp. has acquired the former Santander zinc-lead-silver-copper mine, Lima department, Peru. Existing infrastructure comprises a circa 1,000-person camp and associated support facilities, the concentrate plant including various crushers, mills and cell houses to produce zinc, lead-silver and copper concentrates, and the operating Tingo hydroelectric power station located approximately 17 kilometres from the mine site.
Extensive due diligence sampling by the company's geoscientists of outcropping mineralization and historic exploration boreholes returned values ranging from 4.5 per cent to 39.8 per cent zinc, 0.13 per cent to 8.98 per cent lead, 28 grams per tonne silver to 324 g/t silver and 0.11 per cent to 1.6 per cent copper.
The company plans to conduct an aggressive exploration campaign whose ultimate aim to is discover sufficient mineral resources to justify reopening of the former mine facility. The company has also received final acceptance to list its shares on the Canadian Trading and Quotation System (CNQ) under the symbol ZINC, effective Dec. 21, 2007.
Santander mine
The property is located on the western edge of the Altiplano of the Andes. It is accessible by road from Lima either via Huaral, and from there via the villages of Acos and Tingo to Santander (distance of 215 kilometres) or via Canta to Santander, a distance of 200 kilometres.
The former Santander mine is classified as a polymetallic high-temperature carbonate replacement deposit, or more simply, a carbonate replacement deposit. Globally, such deposits have the potential to form orebodies ranging from less than one million tonnes to approximately 30 million to 50 million tonnes. Modern mining activities commenced on the principal Santander pipe in 1957 and continued until 1993 to an approximate depth of 480 metres. Total production is estimated to be on the order of eight million tonnes at 7 per cent zinc, 1 per cent to 4 per cent lead and 60 g/t silver with additional copper credits. Mining ceased due to a combination of hyperinflation, poor base metal prices and security considerations, however, mineralization remains open at depth with reported zinc grades of 11 per cent in multiple replacement or manto bodies.
Furthermore, there are at least four additional outcropping polymetallic bodies on the property, termed Magistral Norte, Magistral Central, Magistral Sur and Puajanca respectively, which hold significant potential to form economic orebodies. Historic exploration, completed immediately prior to mine closure, suggests that these bodies extend to considerable depth.
The property has been dormant from 1993 until 2007 when evaluation was conducted by the company. Resampling of outcropping mineralization and representative boreholes from the Magistral Norte and Magistral Sur bodies returned positive results and are interpreted as indicating that significant exploration potential remains.
RESAMPLING RESULTS
Deposit Down hole Grade
interval
Magistral Norte 9m 8.76% Zn, 8.6% Pb, 85 g/t Ag & 0.33% Cu
Magistral Norte
DDH-MN-31 23.8m 8% Zn, 4.4% Pb, 137 g/t Ag & 0.11% Cu
Magistral Norte
DDH-MN-38 2.2m 9.45% Zn, 4% Pb, 173 g/t Ag, 0.21% Cu
Magistral Norte
DDH-MN-41 2.25m 9.58% Zn, 8.98% Pb, 324 g/t Ag & 0.22% Cu
Magistral Norte
DDH-MN-43 4.2m 4.5% Zn, 4.28% Pb, & 69 g/t Ag
Magistral Norte Characterization 10.6% Zn, 8.43% Pb, 89 g/t Ag & 0.28% Cu
Magistral Norte Characterization 35.6% Zn, 0.16% Pb, 63 g/t Ag & 0.46% Cu
Magistral Sur
DDH-MS-4 53.7m 6.39% Zn, 0.24% Pb & 28 g/t Ag
Magistral Sur Characterization 15.86% Zn, 0.06% Pb, 19g/t Ag & 0.07% Cu
Magistral Sur Characterization 39.8% Zn, 0.13% Pb, 69 g/t Ag & 1.6% Cu
Magistral Sur Characterization 18.38% Zn, 0.29% Pb, 61 g/t Ag & 0.14% Cu
The property consists of 66 concessions totalling 950.7 hectares surrounded by six petitorios or claim blocks totalling 3,504 hectares centred on the former mine infrastructure.
Future work
The company has commenced an aggressive exploration program anticipated to cost $2.7-million (U.S.) comprising of remote sensing analysis, detailed geological mapping, geophysical surveys and 15,000 metres of diamond drilling designed to test the outcropping Magistral deposits in addition to searching for new orebodies. In tandem with this, the company will commence various scoping level studies in order to ascertain as best as possible the cost and feasibility of recommencing mining operations in a timely manner, should exploration prove to be successful.
An NI 43-101 report, dated Oct. 2, 2007, has been prepared by James Dawson, PEng, and has been filed and is available under the company's profile on SEDAR. Mr. Dawson is a qualified person as defined in NI 43-101 and is independent of the company.
Terms
Pursuant to an assignment agreement dated Oct. 2, 2007, the company, through its Peruvian subsidiary, Trevali Peru SAC, acquired effective Dec. 11, 2007, all of the interest of Companaia Minerales Santander SA of Lima, Peru, in the property for a period of 50 years with an automatic 50-year extension. Santander's interests include, among other things, the right to engage in exploration, development, processing and commercialization activities on the property.
The consideration payable by the company to Santander for the interest is a 3.5-per-cent net smelter return. Commencing on Jan. 1, 2008, the company is obligated to pay to Santander $100,000 (U.S.) per month on account of the royalty. Once production commences on the property, the company will be obligated to pay Santander the greater of the monthly royalty and $100,000 (U.S.).
Santander is currently in INDECOPI proceedings. In addition to acquiring the rights to the property, the company also purchased during 2007, approximately 61 per cent of Santander's outstanding liabilities.
The company is currently well financed with working capital of over $8.9-million.