Linear Metals extends mineralization at Cobre Grande

Using assays from the last two reverse-circulation holes on its Cobre Grande project in Mexico, Linear Metals (LRM-T) has extended the El Oso mineralized zone to a strike length of 300 metres. The El Oso zone is located 500 metres west of the main zone, which has been drilled along a 1.6 km strike.

Hole 18 returned 132 metres (not true width) of 0.84% copper, 0.031% molybdenum, and 13 grams silver per tonne, or a copper equivalent of 1.12%, starting at a depth of 28 metres, including 40 metres of 1.43% copper starting at a depth of 86 metres. The same hole also cut 8 metres from a depth of 20 metres to 28 metres, grading 1% copper, 0.033% molybdenum and 33 grams silver. The hole was drilled at an angle of -75 degrees.

Hole 19 returned mineralization in two intervals. One interval starts at a depth of 40 metres and ends at 58 metres, for 18 metres (not true width) grading 0.5% copper, 0.015% molybdenum, and 11 grams silver. The second interval starts at a depth of 80 metres and ends at 132 metres, for 52 metres (not true width) of 0.57% copper, 0.063% molybdenum, and 16 grams silver, or a copper equivalent of 1.08%. The interval includes 4 metres of 3% copper, 7.7% zinc, 0.031% molybdenum and 63 grams silver per tonne, or a copper equivalent of 3.7%, starting at a depth of 80 metres. The hole was drilled at an angle of 60 degrees.

With the exception of the 4 metres of 7.7% zinc in hole 19, typical zinc grades in the two holes are 0.09% to 0.93%. (The section grading 0.93% zinc includes the 4 metres of 7.7% zinc.)

The same drill program also included ten holes to test geophysical and geochemical anomalies north and west of the El Oso zone. Of these ten holes, hole 23 returned 30 metres of 1.1% zinc.

So far, Linear Metals has released assays of 11 holes in the El Oso zone, nine of which have cut mineralization. The discovery hole of the El Oso zone, hole 68, returned 228 metres (not true width), starting at a depth of 29 metres, and grading 0.62% copper, 0.07% zinc, 0.034% molybdenum and 10 grams silver per tonne, or a copper equivalent of 0.91%. The hole was drilled at an angle of 70 degrees.

A number of other holes from the El Oso zone have been highlighted by the company. Hole 15 cut 46 metres of 1.46% copper equivalent starting at a depth of 168 metres. Hole 17 returned 32 metres of 1.37% copper equivalent starting at a depth of 114 metres. Hole 11 returned 172 metres of 0.54% copper equivalent, starting at a depth of 22 metres. Hole 13 returned 14 metres of 0.8% copper equivalent, starting at a depth of 182 metres. Hole 12 returned 32 metres of 0.84% copper equivalent, starting at a depth of 56 metres, and 48 metres of 0.5% copper equivalent, starting at a depth of 88 metres. And hole 16 returned 6 metres of 1.7% copper equivalent, starting at a depth of 80 metres, and 62 metres of 0.37% copper equivalent, starting at a depth of 130 metres. The intersections reported are not true widths.

A number of holes from the main zone are notable. The longest molybdenum intersection on the property was in hole 60, which returned 332 metres (not true width) of 0.058% molybdenum starting at a depth of 4 metres. Meanwhile, hole 65, drilled at an angle of 70 degrees, returned 51 metres (not true width) of 0.052% molybdenum starting at a depth of 419 metres.

Linear Metals has released a National Instrument 43-101 -compliant inferred resource estimate for the main zone at Cobre Grande, which does not include the El Oso zone. The inferred resource is about 50 million tonnes grading 0.5% copper, 0.04% molybdenum, 0.22% zinc and about 13 grams silver per tonne, equivalent to 0.92% copper. This translates to 545 million lbs. copper, 44 million lbs. molybdenum, 243 million lbs. zinc and 21 million oz. silver.

The Cobre Grande project is located in Oaxaca state, 60 km southeast of the city of Oaxaca and 190 km northeast of the Pacific port of Salina Cruz. The project is accessed on a 56 km highway (federal highway 190) from the city of Oaxaca, followed by a 6 km gravel road and a 6 km dirt road. The nearest town is San Baltazar de Guelavila, a distance of 6 km on a dirt road.

Geologically, the Cobre Grande area is a structural window of cretaceous sedimentary rocks flanked to the north and south by tertiary volcanic rocks. Marine carbonate and clastic rocks of the cretaceous tepozcolula tormation underlie the area. These rocks have been intruded and variably altered and mineralized by tertiary granodiorite to quartz diorite porphyry dykes and sills.

Cobre Grande is a porphyry related skarn mineralized zone. The main zone is characterized by well defined copper-molybdenum-zinc mineralization types with silver occurring with both the copper and zinc mineralization. The main zone is oriented north-south, extends over a distance of 1.6 kilometres and is up to 250 metres wide and up to 200 metres thick. The mineralization types are well sorted from west to east as molybdenum sulphide stockwork, copper sulpide skarn, and zinc sulphide skarn.

Mineralization types are locally overprinted by oxidization related to weathering processes. Oxidization occurs as a thin blanket near surface where sulphide content was previously high and also cuts more deeply along faults permeable to surface waters. Oxidization locally results in copper oxide mineralization, partially oxidized molybdenum mineralization, and chalcocite enriched partially oxidized copper mineralization.

Linear Metals has completed metallurgical test work on the minerals on the property. Recoveries from copper sulphide skarn were 95% for copper and 83% for silver. Molybdenum recovery from molybdenum sulphide stockwork was 90%. Recoveries from partially oxidized, enriched copper skarn were 82% for copper and 60% for silver. Recoveries for zinc sulphide skarn were 60% for copper, 30% for molybdenum, 70% for zinc and 45% for silver.

Linear Metals has an option to purchase 80% of the Cobre Grande property. In March 2004, Linear Gold (LRR-T), a related company, acquired a five-year option to purchase a 100% interest in the Cobre Grande project by making a series of cash payments to the neighbouring community of San Baltazar Guelavila and incurring exploration expenditures of US$420,000. The option to purchase entitles the holder to acquire Cobre Grande in exchange for a US$12 million cash payment, a 2% net smelter returns royalty or a 15% carried joint venture interest in the project, subject to the community’s decision.

In 2006, before being spun-out from Linear Gold as a distribution in kind to shareholders of Linear Gold, Linear Metals was granted an 80% interest in the Cobre Grande option in exchange for making all remaining option payments due to the community of San Baltazar Guelavila and incurring all remaining expenditure commitments. Linear Metals may also elect to purchase the remaining 20% interest in the option at any time prior to December 31, 2008. If it elects not to purchase the remaining 20% interest, an 80/20 joint venture will be formed between Linear Metals and Linear Gold, with Linear Metals acting as operator.

Linear Metals’ other flagship project is the KM61 molybdenum property in northwestern Ontario, where a resource estimate is due in the fourth quarter. On July 31, the company’s net current assets (current assets less current liabilities) stood at $3.8 million, and it had 46.4 million shares fully diluted.