El Picacho returning strong gold-silver results for Lateegra

Vancouver – Initial results from the El Picacho gold-silver project in Mexico are pulling Lateegra Gold (LRG-V) out of a slide.

First phase drilling on El Picacho consisted of 14 holes designed to confirm and expand upon historic data. Hole 14 intersected 6.1 metres grading 4.73 grams gold per tonne and 60.26 grams silver, while hole 12 returned 7.8 grams gold and 72.9 grams silver over 9.4 metres.

Hole 13 cut 11.3 metres of 15.57 grams gold and 32.4 grams silver, and hole 1 intersected 4.3 metres grading 12.81 grams gold and 27.8 grams silver. All intervals given represent true widths.

Seven other drill cores contained no significant mineralization.

Quite a few of the values were better than we expected, which is great, but there were also some blank holes, says Chris Verrico, CEO of Lateegra. It is a first pass, so blanks are to be expected. All told were pretty excited about it.

Picacho is a 3,236-hectare mining concession in the northern Sierra Madre gold belt in Sonora state. Previous owners exploited a 6-metre-wide vein structure for three years, but they werent mining for gold. It was a silica production, stated Verrico. They were shipping silica with some gold credits. As they started to go through the silica cap, the silica content went down and the gold went up.

To make use of their changing asset, the previous owners built a mill but it never got up and running. They had a go at it but it was undercapitalized, Verrico says. Now the existing mine will likely become part of the stope. The mill could be of interim value theres some not bad equipment but its the wrong place. The mill needs to be up by the mine, not down at the base of the mountain.

Lateegra entered into an acquisition agreement with Tara Gold Resources (TRGD-O) to earn an up-to 70% interest in the Picacho mine in mid-2006. Lateegra is making escalating payments totaling US$7.3 million to Tara Gold over five years, as well as spending US$1 million in exploration and US$2 million on mine development and production plant enhancements in the first 1.5 years. Tara Gold gets 50,000 Lateegra shares a month for 12 months.

Verrico is certain the property contains a fair amount of metal. Theres definitely a mine there, he says. Theres lots of blue sky.

The companys share price had slowly slipped 75% since January but strong drill results reversed the slump, pushing Lateegra up 10% to close at 55 in June 19th trading.

Lateegra is also active in Ecuador, where the company picked up the El Condor project in mid-2006. The site, which covers 242 hectares, is 4 km southeast of Aurelian Resources (ARU-T) Fruta del Norta high-grade gold discovery and shares a border to the north with Aurelians El Tigre gold anomaly. Aurelian is currently drilling at El Tigre and Lateegra is holding off on exploring El Condor until its neighbours results come in.

Theyre drilling on our border, literally 500 metres away, says Verrico. Were nervous to jump to the drill because theyre deep targets, and it just doesnt make sense for us to do anything right now were just going to let them drill.

The company has completed a mobile metal ion (MMI) survey over the entire site. Samples indicate a 19-hectare arsenic and antimony anomaly in the southern part of the site, an indicator of potential blind gold mineralization as well as additional epithermal mineralization.

Verrico says the next steps depend on what Aurelian discovers. Theres a reasonable to good chance that theyll find something, he says. In a perfect world Aurelian will find something right on the border that extends into our property and then we could get bought out, perhaps by Aurelian, and then we could put that money to good use in Mexico. Well see.

The other activity around Lateegra concerns Michael Townsend, the companys president. On June 1 the B.C. Securities Commission reported a settlement agreement between themselves and Townsend, who failed to file share transactions he performed through an offshore account between January 2005 and August 2006. He filed the reports on August 30, 2006. The transactions involved two companies for which he served as a director Lateegra Gold and West Hawk Development (WHD-V).

In the settlement Townsend agreed to pay a fine of $41,250 for failure to file insider reports in a timely fashion and also agreed to a one-year ban on trading securities. He resigned as a director of West Hawk but as yet remains president of Lateegra. The TSX Venture Exchange is currently reviewing whether Townsend is an acceptable choice as a company director or officer.

The Commission found that there was no manipulative trading or insider trading or money gained, says Verrico. Nonetheless, it wasnt right, what he did. He should have reported those trades. Now he may have to step down. We should know about that fairly soon.