Vancouver Subject to shareholder and regulatory approvals and a due-diligence review, Farallon Resources (FAN-T) and Continuum Resources (CNU-V) plan to merge into a new entity that will hold their combined Mexican projects under the Farallon name.
Farallon owns 100% of the Campo Morado polymetallic massive sulphide project in Guerrero state.
El Largo, the largest of four deposits defined to date, hosts an indicated resource of 4.13 million tonnes grading 1.12 grams gold and 128 grams silver per tonne, plus 0.4% copper, 5.76% zinc, and 1.33% lead. A further 1.26 million tonnes of 1.54 grams gold, 122 grams silver, 0.85% copper, 3.99% zinc, and 0.84% lead are classified as inferred, which (combined with other deposits) brings total inferred resources for Campo Morado to 8.98 million tonnes of 3.42 grams gold, 179 grams silver, 0.81% copper, 4.03% zinc, and 1.32% lead.
More than $34.2 million has been spent at Campo Morado, which is at the pre-feasibility stage, with a report expected in early 2006.
Continuum holds two early-stage gold-silver projects in Oaxaca state and various other holdings in southern Mexico. The company’s Natividad and San Jose projects are both past-producers.
Natividad produced 913,674 oz. gold and 22.9 million oz. silver from 1940 to 2003, which doesn’t include historic production dating back to the late 1700s. Production records aren’t available for San Jose, but average grades are reported to be in the range of 5-7 grams per tonne.
Farallon will issue about 20 million shares for Continuum, based on one Farallon share for every two Continuum shares, with warrants exchanged on the same basis. Once the merger is completed, Farallon will have about 119.8 million shares issued and outstanding, or 166.5 million on a fully diluted basis.
Continuum will continue to operate as a precious metals arm and wholly owned subsidiary of Farallon. The company’s goal is to outline 1 million oz. gold and 20 million oz. silver at each of its two core projects, and then carry out bankable feasibility studies with a view to starting production within 18 months. Farallon will continue to develop the Campo Morado project as part of its overall strategy to build a new mining company with three operations in two Mexican states.
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