Full Metal’s Little White Man gets bigger (July 28, 2008)

VANCOUVER — The first drill results from Full Metal Minerals’ (FMM-V, FLMTF-O) 2008 program have expanded the size of a zinc-lead- copper-silver mineralized area at its Little White Man (LWM) prospect, one of several targets on its 40 Mile property in eastern Alaska, about 40 km from the community of Chicken.

“We think we may be on to a whole new CRD (carbonate-replacement) district,” says Robert MacLeod, Full Metal’s president.

Based on its 2007 drill program, Full Metal had outlined a mineralized area with a strike length of 300 metres to a depth of 200 metres. But with the release of assay results from seven of 29 drill holes completed so far this year, Full Metal Minerals has almost doubled the size of LWM to 550 metres strike length and 300 metres depth. It is still open in all directions.

Full Metal’s best hole, no. 29, fetched 68.2 metres, true width, grading 6.56% zinc, 2.47% lead, 0.11% copper and 42.7 grams silver per tonne starting 47 metres below surface. Other holes cut similar grades over shorter widths. For instance, hole 23 hit 4 metres starting at 188 metres grading 4.28% zinc, 9.84% lead, 0.12% copper and 134 grams silver.

The 2008 program adds to last year’s impressive results. These include a near-surface, 127-metre intersection in hole 19 grading 10.8% zinc, 2% lead, 0.16% copper and 30.7 grams silver.

For the most part, the mineralized area is made up of massive to semi-massive sphalerite, galena and chalcopyrite.

“It looks like a real simple metallurgy,” MacLeod says. “It’s coarse-grained, so it should have good recoveries.”

The LWM prospect is one of several Full Metal is pursuing on the 951-sq.-km 40 Mile property the company is optioning from Doyon, an Alaska Native Regional corporation.

These include the Fish prospect, 6 km east of LWM, where exploration is ongoing. Hole 1 at the prospect, drilled in 2006, cut 11 near-surface metres grading 4.2% zinc, 0.2% lead, 0.11% copper and 205 grams silver per tonne.

The 100% option Full Metal entered into with Doyon includes both exploration and production agreements. During the exploration phase, Full Metal must pay Doyon US$325,000 over six years, make annual US$10,000 scholarship donations and spend US$3.9 million on exploration.

For any potential mining leases, Full Metal has agreed to precious and base metal royalties, as well as a number of annual payments. For precious metals, there is a pre-payback 2% net smelter return (NSR) royalty and a post-payback 4% NSR. Alternatively, the parties may choose to go with a pre-payback 10% net profits interest (NPI) and a post-payback 20% NPI.

As for base metals, there will either be a 1% pre-payback NSR and a 3% post-payback NSR or a 10% pre-payback NPI and a 20% post-payback NPI.

In addition, Full Metal has agreed to advanced royalty payments of US$100,000 per year over five years that increase to US$250,000 for the year prior to production. The company is also

responsible for making annual US$25,000 scholarship donations that increase to US$50,000 once production begins.

Full Metal’s exploration and drill program is ongoing. At the moment, MacLeod says the company is carrying out stepout and infill drilling at LWM, and plans to continue its exploration programs at other 40 Mile targets, including Eva, Drumstick and Oscar, later on in the season.

MacLeod says he hopes to have a resource estimate by 2009.

“In terms of development, we would truck concentrate to Delta Junction. . . about a two and a half-hour truck ride to railhead (from 40 Mile),” he says. The 40 Mile property is 40 km from the Taylor Highway and a dirt road passes within about 5 km of the property.

“The terrain isn’t too rugged, so it wouldn’t be that hard to get concentrate out.”

Full Metal recently bought a 200- tonne gold mill for its Lucky Shot property, 145 km north of Anchorage. The company is “going to drag it in” and hopes to start production next year to take advantage of high gold prices.

Full Metal has not done a feasibility study for Lucky Shot, instead completing an in-house study of the project. Capital costs are expected to come in at around US$10-12 million.

“This type of operation would give us some cash flow to help fund our other exploration projects,” MacLeod says.

Full Metal is primarily focused on zinc-lead-copper-silver targets in Alaska.

At presstime, its shares traded at $1.09 in a 52-week window of 92-$3.57.