Projects Vianey Project, Mexico
Overview
The Vianey Mine concession (Vianey) is a historically productive mining property with mineral values primarily in silver-zinc-lead, and local gold-copper credits with excellent exploration potential. Located in a region known to have many mines with deposits characteristic of Mexico, it has been operated intermittently on a small-scale basis since the 1400's. More recently, the mine is said to have been in almost continuous production since about 1976 by Compania Minera de Chilpancingo S.A., and operated until 1996 on a small scale with short breaks, extracting 200 to 300 tonnes of silver-lead-zinc deposits per month. In 2005, Minerales Jazz SA de CV, a 100% subsidiary of Journey, acquired 100% interest in the property.
The Vianey concession consists of 44 hectares held under an exploitation concession. After staking of additional historic mines, an exploration concession covering 5,022 hectares (approximately 12,400 acres) was added, significantly increasing the potential for future discoveries. The mine is well underway to being rehabilitated to increase safety and efficiency of movement within the existing mine, allowing for additional mapping and sampling. This is important for both confirming reserves and locating optimal surface drill sites. After rehabilitation, the mine has the potential to move into production within the next twelve months.
History
Compania Minera de Chilpancingo S.A. owned and operated the Vianey almost continuously from 1976 until 1996. Underground workings put in by Compania Minera de Chilpancingo S.A., and its predecessors amounts to seven levels, several winzes, two shafts and numerous stopes.
In 1996 Minera LMX SA de CV took over the mine and an initial phase of exploration included fan drilling 252 meters, gathering 276 channel samples, and 433 additional samples. A second phase in November 1996 included an additional 2,173 meters of drilling from the -75 level, which discovered a new breccia chimney called the Twilight Zone. In addition to the Twilight Zone, another sizeable breccia body has been identified, the San Pedro, also holding the potential for bulk scale underground mining. An indicated reserve was established of 440,601 short tons (399,625 metric tons) placing a value in 1996 of $65 per ton ($645/t for lead, $1195/t for zinc, and $5.21/oz for silver). Numerous holes intersected several potential ore grade mineralized zones over potentially economic widths at depths of up to 100 meters below the deepest mine workings.
Exploration efforts stalled after the Vianey was sold to the Chief Geologist of Minera LMX, who later defaulted on a property payment, and a legal battle ensued. After several years legal matters were settled. In 2005, Minerales Jazz SA de CV, a 100% subsidiary of Journey, acquired 100% interest in the property free of royalties, back-in rights, or other encumbrances and the surface rights are leased to Minerale Jazz SA de CV from the town of Atzcala. Since taking control of the Vianey, Journey has completed about US$100,000 of work to clean up and rehabilitate the mine.
On May 31, 2006, Wits signed a letter-of-intent subject to due diligence (completed June 26, 2006) to allow it to earn up to an undivided 50% interest in the Vianey from Journey Resources Corp. (TSX: JNY). The transaction with Journey closed June 28, 2006.
On July 9, 2006, Journey began the process to secure permits to commence work outlined in a N43-101 Technical Report dated October 18, 2004, revised March 10, 2005. It also recommended mapping, satellite imagery interpretation, and approximately 3,230 meters of angle-hole diamond core drilling to test grade, thickness and continuity of mineralization at depth and along strike. This initial phase of exploration is to provide additional confidence and understanding of earlier reports. In addition, it will set the stage for identifying a potentially larger ore body in and around the historic mine. Given the history of the region, high grades, and bull market in metals prices, Wits' and Journey's plans are to prove additional mineralization, what management hopes could be a several million ton reserve, up to six times what was previously identified.
On December 19, 2006, Wits announced it had paid for and earned the ownership of the first 25% of the Joint Venture with Journey Resources. On September 28, 2007, Wits increased its ownership position from 25% to 50% by agreeing to issue 1,600,000 shares of its unregistered common stock to Journey.
Location and Description
The Vianey project is located in the north-central part of the state of Guerrero, which lies in the southern part of Mexico. Vianey is located about 250 km by road south of Mexico City and 160 km north of Acapulco. The mine is situated within the Morelos National Mining Reserve on the southwestern flank of the southern Sierra Madre Occidental province that extends north-northwest to the border between Sonora and Arizona, and east-southeast to Oaxaca State. The southern part of the Sierra Madre province includes a string of gold-silver and base metal deposits, in the Sierra del Sur Metallogenic Province, in the Guerrero Gold and Massive Sulfide Belts. It hosts intrusive associated gold-copper-silver deposits.
Mineralization at the Vianey Mine includes veins, breccias, lenses and mantos of silver, and poly-metallic (Pb-Zn) mineralization with local concentrations of gold and copper. The veins and breccia zones predominate in apparent importance. Most of the veins are localized along NW-SE trending structures and E-W structures; the lenses occur in fault zones and as sulfide concentrations with calcite, gypsum and quartz between some bedding planes. The Tepemesquite Vein extends from 0 to -75 level above the Vianey vein from -38 to -75 level. These two veins provided significant past production and have not been fully exploited. The veins are steeply dipping structures over 300 meters in length and 150 meters in depth with some workings terminating in ore grade mineralization.
Two major breccia zones of significance have been identified in the limestone, the Don Pedro and the Twilight Zone, which are associated with calcite-gypsum-quartz gangue minerals and significant amounts of associated silver. The Don Pedro and Twilight Zone breccia deposits are not included in calculated reserves, are open to expansion, and constitute a target for further exploration.
Currently, the Vianey has non-compliant N43-101 reserves in all categories of 345,020 metric tons grading 2.13% lead, 3.66% zinc and 269 grams silver per ton as calculated by Hawley, P.J., in 2000. This is only a historical reserves estimate under National Instrument 43-101, and has not been sufficiently verified by a qualified person to be classified as current mineral reserves. While reserve calculation data were also not consistent with the requirements of Section 1 of NI 43 101, the calculations are believed to be adequate to conclude substantial mineralization at Vianey. Hawley's calculations were based on metals prices of US$4.88/oz silver, US$0.22/lb lead, and US$0.58/lb zinc on September 14, 2000. In addition, mill recovery was determined to be 75.8% silver, 78.9% lead, and 75.3% zinc with a cutoff grade of 100g/ton silver.
About Concessions
"Concessions" in Mexico refer to mining lots, the perimeter and name of which is determined by the applicant, and which are granted on "free" land ("tierra libre"). Concessions are initially granted for exploration purposes. An exploration concession is valid for a period of six years; an Exploitation concession for fifty years. Exploitation concessions can be renewed once for an additional fifty years, if requested before the end of the expiration of the original concession.
In Mexico minerals are held in trust for the people of Mexico by the national government. There are no provisions for patent to mineral lands. Surface rights can be held by the government, local communities ("ejidos"), or privately held by companies or individuals. The granting of permission to acquire rights to minerals from the ground is governed by legislation administrated by the government of Mexico. Only the government can grant to individuals and Mexican corporations mining concessions with the right to explore and extract mineral reserves. Mexican corporations may be wholly owned subsidiaries of foreign corporations and/or joint ventures as is the case with the Vianey.
The Vianey concession consists of 44 hectares held under Exploitation concession Number 164151, Exp. No. 5929, issued March 5, 1979 and will expire, unless renewed, in 2029 pursuant to the laws of Mexico. |
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