Exall, Menora active in Mexico

Two Canadian juniors on the exploration trail in Mexico are Exall Resources (TSE) and Menora Resources (ME).

Exall recently took over a local Mexican company, Cerro de Cobre, and with it, options on three separate copper properties. Two of these have proven potential while the third is an exploration proposition.

The three properties are Santo Tomas, Verde Grande and San Martin. Santo Tomas is the most advanced of the three. Exploration by others on the porphyry copper indicate a geological resource of 195 million tonnes grading 0.52% copper. In addition, widely spaced drilling at the margins of the resource suggests the potential for doubling the tonnage.

An estimated 20-30 million tonnes of oxide copper blankets the top of the ore. The material is amenable to copper recovery by low-cost, solvent extraction-electrowinning (SX-EW) processing and preliminary plans call for a plant to produce 30 tonnes cathode copper per day. Mining will be by open pit and the 30-tonne-per-day plant will require the mining and heap leaching of two million tonnes oxidized ore per year. The stripping ratio is expected to be less than 1-to-1 (oxidized ore to waste).

According to Exall President Stephen Roman, bringing in a major company to mine and mill the underlying sulphide orebody is a possibility. The deposit is in the state of Sinaloa, 300-600 metres above sea level. All of the necessary infrastructure is nearby, including main highways, power lines and a railway.

The second deposit is the Verde Grande. Only a limited amount of work is needed to get the property under way and Roman believes it may be the first property to move into production. He estimates 12-18 months is needed to install a small SX-EW plant and mining facility.

Copper oxide reserves comprise 250,000 tonnes (proven) and 1.5 million tonnes (probable), both categories grading an average 2.5% copper and 70 grams silver per tonne. The deposit is identified as a skarn. It has undergone intermittent mining. Underground workings totalling 3,000 ft. traverse the property. Additional diamond drilling is planned to determine if the deposit, about 50 km. northwest of Hermosillo, capital of the state of Sonora, is associated with porphyry-copper mineralization at depth.

San Martin is Exall’s third property acquisition. It hosts known oxide-copper mineralization. Small-scale operations have mined high-grade copper and silver-lead-zinc deposits elsewhere in the general area and San Martin is considered to be a prime exploration target. The property is near the town of Parral, Chihuahua.

Taking advantage of its Mexico foothold, Exall company and American Barrick Resources (TSE) have entered into an agreement whereby Exall will search for gold properties on Barrick’s account. Exall will have the right to a 25% working interest in any properties accepted by Barrick. The agreement is initially for one year with provision for extensions (T.N.M., Dec. 21/92). Exall recently raised $1 million by private placement. As of Dec. 31, 1992, Stephen Roman held 21.6% of Exall’s stock, and Roman Corp. had 20.8%. About 75% of the outstanding stock is held by management. The terms under which Cerro del Cobre originally optioned the three copper properties and consequently the obligations for which Exall is now responsible have not yet been divulged.

Menora has an exclusive lease for the Estrella del Porte gold property, Zacatecas. Terms of the lease call for advance royalties of US$10,000 per month for two years, at the end of which period a minimum-capacity mill of 100 tonnes per day is to be in operation. After that, Menorah will pay a royalty of 3.5% on net smelter returns.

According to president Niyazi Kacira, Menora’s action plan includes completion of 2,000 metres of diamond drilling by July 31, 1993, followed by permitting and then three months of mine construction starting January 1994. Estrella del Norte was originally worked as an underground mine several years ago. The orebody is a Carlin type replacement gold deposit located at the crest of an outcropping anticline. That portion of the orebody contains 400,000 tonnes and will be mined by open pit.

Mineralization continues downdip along one leg of the anticline in what will be the underground phase of the operation. Total reserves are estimated to be 1.2 million tonnes (to a depth of 400 metres) and grading an undiluted 10 grams gold per tonne.

Much of the near-surface ore is heap leachable and cash costs per ounce of gold are estimated at less than US$100. Sulphide ore will require milling at a significantly higher cash cost. The soon-to-be-implemented drill program is expected to determine at what level of ore reserves conventional milling will be needed. A 500-tonne-per-day sulphide milling capacity is projected.