Castle Gold - News
Morgain to buy 9,871 ha of Mexico concessions, rights
2007-08-13 13:03 ET - News Release
Mr. Christopher Babcock reports
MORGAIN INCREASES LAND POSITION AT ITS LA FORTUNA GOLD PROJECT IN DURANGO, MEXICO
Morgain Minerals Inc. has signed an agreement to purchase eight additional mineral concessions totalling 9,851 hectares and surface rights covering 20 hectares located in Durango, Mexico. The concessions completely surround and adjoin Morgain's existing La Fortuna concessions and offer exploration potential. Under the terms of the purchase agreement, in consideration for the acquisition of the concessions and the claims, Morgain has agreed to pay to the vendor a total of $300,000 (U.S.) in cash payable in instalments by June 27, 2009, and has agreed to issue to the vendor a total of one million common shares of Morgain upon acceptance by the TSX Venture Exchange.
Between 1974 and 1988, Consejo de Recursos Minerals and the Servicio Geologico Mexicano, both geological agencies of the Mexican government, defined four mineralized areas with more than 20 structures and breccias on the concessions. Historical sampling obtained assay values of up to 80 grams of gold per tonne and 1,500 g/t silver. The historical estimates are relevant as they offer the potential for both high-grade gold mineralization and low-grade, bulk-tonnage mineralization. Much of the concessions are currently unexplored. These historical assays were calculated prior to the implementation of National Instrument 43-101 and do not comply with the current Canadian Institute of Mining, Metallurgy and Petroleum standards and definitions for estimating resources and reserves as required by Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects. Sufficient work has not been done to verify the historical assays and therefore should not be relied upon.
Prior to the current acquisition of concessions, Morgain's holdings at La Fortuna were detailed in an independent, National Instrument 43-101-compliant technical report prepared by Toren Olson, PGeo, of Toren Olson Consulting (see May 17, 2007, news in Stockwatch). As described in the report, La Fortuna is located in the northwestern corner of the state of Durango, Mexico, about 70 kilometres northeast of Culiacan. Between 1991 and 1996, in excess of $9-million (U.S.) was spent by previous owners developing La Fortuna. Previous work included detailed mapping and sampling of underground openings, and 121 closely spaced diamond drill holes totalling a total length of 18,900 metres.
In July of 1995, Fluor Daniel Wright of Vancouver, B.C., was commissioned to estimate the geological resource and to develop preliminary open pit designs for La Fortuna. This work produced a historical resource at a 0.5-gram-per-tonne cut-off grade of 4,451,000 tonnes grading 2.25 g/t gold, 29.9 g/t silver and 0.23 per cent copper (322,000 ounces gold, 4.3 million ounces silver, and 22.6 million pounds of copper). It should be noted that the historical resources discussed above were calculated prior to the implementation of National Instrument 43-101 and do not comply with the current Canadian Institute of Mining, Metallurgy and Petroleum standards and definitions for estimating resources and reserves as required by Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects. Sufficient work has not been done to verify the historical resource estimate and to classify it as a current mineral resource and therefore this estimate should not be relied upon.
The report concludes that, "the La Fortuna orebody is well defined with 121 diamond drill core holes on a relatively close spacing," and goes on to note that there, "are several other showings around the property which may also develop into resources with additional exploration and definition drilling thereby increasing the potential at La Fortuna."
As recommended in the report, Morgain will initiate a $198,000 (U.S.) work program (that includes twinning eight holes to verify historic drilling data) commencing in the fourth quarter of 2007 with the goal of producing a National Instrument 43-101-compliant resource estimate during the first quarter of 2008. In conjunction with this work program, Morgain will commence a prospecting program at the new concessions.
Certain technical information set out in this news release has been reviewed and verified by Richard Adams, PEng, MBA, a director of Morgain, who is a qualified person for the purposes of National Instrument 43-101.
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