El Quevar Yaxtche Silver Deposit
In March 2006, Salta Exploraciones SA ("SALTA") entered into an option agreement with SILEX Argentina S.A. ("SILEX"), a subsidiary of Apex Silver Mines Corporation ('APEX") that enabled APEX to earn a 100% interest in SALTA's interest in its Castor-Quevar silver prospect in north western Argentina. Cascadero Copper holds a 50% equity interest in SALTA.
A Chapter 11 Joint Plan of Reorganization (the "Plan") filed by APEX became effective on March 24, 2009. Under the Plan, Golden Minerals Company, a newly-formed Delaware corporation, became the successor to Apex assets, including the option agreement with SALTA. Golden Minerals trades on the Toronto Stock Exchange under the ticker AUM.
The SALTA properties (El Quevar II and Castor) form part of the Yaxtche mineral system and are subject to an option agreement signed March 16th 2006, between SALTA and SILEX. To exercise its option to acquire 100% of Salta's interest in the properties, SILEX has to pay an additional US$1.6 million on or before March 16th 2011 and grant SALTA a 1% NSR royalty on production from the properties. SALTA intends to use the cash, if paid, to assist in financing the exploration of its portfolio consisting of 46 mineral properties in north western Argentina.
AUM published a 43-101 Technical Report dated January 31-09 regarding the silver resource at the El Quevar Yaxtche deposit as outlined in TABLE ONE below.
RESOURCES YAXTCHE SILVER DEPOSIT
This resource is based on 45 core holes in a 700 metre east west trending zone that dips -50o to the north and is up to 50 metres thick. The resource is within a larger mineralized shell that grades >25 g/tonne silver. The sulphide zone has low, medium and high sulphide phases. The high-sulphide zone averages 823 g/tn (26.5 oz) silver, 0.58 g/tn gold, 1.60% lead, 1.70% zinc, 0.18% bismuth, 0.40% antimony and 0.82% copper.
The cut-off grades were determined by using a silver price of US$12 per ounce ($0.39 per gram), 65% recovery for the oxide material by leaching and an open pit mining cost of US$1.75 per tonne. Processing is set at US$20 per tonne. The recovery for mixed and sulphide material is expected to be between 90 to 95% available by a crush-grind-flotation circuit. The cut-off grade was determined for underground mining at a cost estimated at US$25 per tonne plus US$20 per tonne processing cost. The mineralized zone is open to depth and along strike.
On August 10th 2009 AUM issued a news release outlining the progress at El Quevar subsequent to the 43-101 Technical Report referred to above.
"During the second quarter, the Company continued its drilling program on the El Quevar silver project in northwestern Argentina. The Company recently completed a 63-hole core drilling program totaling about 8,000 metres. The drill program focused on providing infill drill intercepts in the central area and defining strike extensions of the high-grade Yaxtche mineralized zone to support up-dated resource estimation and provide information for preliminary engineering studies. These holes were primarily designed to provide additional intercepts within the original drill pattern, which was spaced about 50 metres apart. This new drilling will provide intercepts spaced 25 to 30 metres apart and provide more information about the continuity and grade of the known mineralization. This drill program also tested extensions to the east and west of the main mineralized zone. Results confirm that the zone extends at least 450 metres further west and 350 metres further east of the previously defined 750 metre long central zone, and is still open in both directions.
Of the last 37 holes drilled in the central part of the Yaxtche zone at El Quevar as of July 29, 2009, 27 hit significant silver mineralization of better than 100 grams per tonne, with assays pending on six holes. Eight of the last 37 holes in the central part of the zone intersected greater than 1.0 kilogram (>32.2 ounces) per tonne of silver, with grades up to 8.6 kilograms (276.5 ounces) per tonne, including a 22 meter intercept of 932 grams (30 ounces) per tonne of silver. A total of 26,000 metres in 141 holes have been drilled at El Quevar to date. The field work at El Quevar has also identified several more target areas believed to have potential for the discovery of additional silver mineralization. The Company plans to drill test the areas believed to be more promising in the coming months. The Company plans to update the mineral resource at El Quevar in the third quarter of 2009 and has initiated engineering studies in support of a preliminary economic assessment for the project."
As of June 30th 2009 Golden Minerals had issued about 3.3 million shares and had US$17.8 million in working capital of which $15.7 million was cash.
Cascadero Copper Corp
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