Vancouver —
The Lone Mountain property is 5 miles from the town of Silver City, 9 miles southwest of
Kennecott drilled the property in the late 1970s, and subsequent work was carried out by Chevron and Granges in the mid-1980s.
Chevron calculated a historical resource in two separate zones in 1983. The Lake Valley zone was found to contain 7.35 million tons grading 2.2% copper, 5% zinc, and 1.2 oz. silver per ton at a cutoff grade of 1% copper. At the same cutoff, the Lower Paleozoic zone contained 17.5 million tons grading 1.36% copper (this increases to 94 million tons grading 0.74% copper at a 0.5% cutoff).
These resources were later verified by both Pincock Allen & Holt and Cypress Minerals. Augusta plans to update the resources so that they comply with National Instrument 43-101.
Lone Mountain appears to be a buried high-grade copper-zinc-silver skarn hosted by Mississippian limestone (Lake Valley). This part of the deposit starts at 550 metres depth.
Farther down, lower Paleozoic dolomite-limestone hosts copper mineralization near their contact with a Tertiary quartz-monzonite porphyry stock. The skarn-type mineralization is structurally and stratigraphically controlled.
The mineralized zones remain open to the northeast and northwest. An unexplored area, west and south of the known mineralization, includes several surface silver-manganese showings, which are slated for drilling.
Augusta must pay US$1 million in cash and 325,000 shares and spend US$4.8 million on exploration during the first three years of the deal.
In late 2004, New Mexico revamped its Mining Law, reducing its take from production to a 2% royalty, whereas previously it was from 5%.
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