EuroGas Agrees to Purchase 35% Interest in Tombstone Exploration, Mining Exploration Company With Strategic Land Position in Tombstone, Arizona Gold Silver Mining DistrictTicker Symbol: ?:HAMB:EUG U:EUGS X:FRANKFURT:EUG X:XETRA:EUG ?:STUT:EUG
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EuroGas, Inc. (EuroGas) (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMB: EUG) (STUT: EUG) today announced that it has entered into an agreement to acquire a 35% interest in Tombstone Exploration Corp., a publicly traded mining exploration company, by purchasing 25,000,000 common shares in exchange for US $ 1,000,000. EuroGas also received warrants to purchase an additional 25,000,000 shares of Tombstone common stock for $ 2,500,000; if exercised, EuroGas would own approximately 51% or a controlling interest in Tombstone. This acquisition will increase EuroGas' holdings in the Tombstone Mining District of southeast Arizona, which has a long history as a prolific producer of gold, silver and base metals.
Tombstone Exploration Corporation has the mineral rights to approximately 11,500 acres of historical mining land in the areas around Tombstone, Arizona and is now the largest holder of land in the Tombstone Mining District. Tombstone Exploration Corp. controls one of the largest mining properties in Southern Arizona.
On May 4, 2010 Tombstone announced that it had made significant progress with its drilling program at its property at Tombstone, Arizona with 2,375 feet of drilling completed. Follow-up work on other targets on Tombstone's property indicates that there is a possibility that porphyry copper deposits could be found. Previous drilling in the area indicates that porphyry systems exist and that there could be multiple targets in the district. Due to Tombstone's extensive land holding of about 11,500 acres, there is potential for one or more of these systems on the Company's property.
Over the past two years, EuroGas has acquired a 100% interest in the Tombstone Sandwich property, which covers some 2,000 acres (approximately 810 hectares), and is directly contiguous to Tombstone Exploration's property. Notably, Freeport McMoran, the world's largest copper producer, has also staked 79 claims on the southeastern border of Tombstone Explorations' land holdings, and in addition is scheduled to begin drilling operations this week on a joint venture, the Dragoon Mountains property, which is also located in southeast Arizona.
Over the past two years, EuroGas has acquired a 100% interest in the Tombstone Sandwich property, which covers some 2,000 acres (approximately 810 hectares), and is directly contiguous to Tombstone Exploration's property. Notably, Freeport McMoran, the world's largest copper producer, has staked 79 claims on the southeastern border of Tombstone's land holdings and EuroGas' Sandwich Property which abuts both Tombstone Exploration's property and Freeport McMoran's newly staked claims.
EuroGas' direct holdings in Tombstone Sandwich include the TEI Open Pit Mine which has a long history as a producing gold and silver mine, having been in production as recently as1985, when low metals prices and a dispute between the mine's partners led to its closure. According to TEI's former project director, who still lives in Tombstone, from 1980 until 1985, between 700 and 800 pounds per week of dor? bullion, averaging 92% silver and 2% gold, were produced and sent to the Engelhard Refinery in California.