MINING IN MEXICO — Exall’s main focus on gold and copper

With an advanced copper project and a producing gold mine in its portfolio, Toronto-based Exall Resources (TSE) is one of the more active juniors on the Mexican mining scene.

“Our main focus is copper and gold,” President Stephen Roman told The Northern Miner in a recent interview. Roman says his company is concentrating on Mexico because of “its proximity to Canada, its mineral history, good infrastructure and the looming free-trade agreement.”

At the company’s Santo Tomas porphyry copper deposit in Sinaloa, Mexico, an ongoing feasibility study continues to enhance the project. A recent reverse circulation drill program confirmed the homogeneous nature of the copper mineralization as well as the existence of gold and molybdenum values throughout the porphyry.

The drilling also confirmed the zoning that was previously suspected and that a high-grade core exists; two holes drilled into the zone each returned values of 1.14% copper over 80 metres.

Based on 30,000 metres of drilling, reserves were calculated recently at 480 million tonnes grading 0.40% copper, 0.05 grams gold per tonne and 0.003% molybdenum (representing 4.2 billion lb. copper and nearly 23.9 million grams, or 768,000 oz., gold).

Although most of the copper mineralization occurs in sulphide form as chalcocite, there is an oxide cap with 14 million tonnes of reserves averaging 0.75% copper. The oxidized cap is amenable to low-cost processing by a solvent extraction-electrowinning technique.

Testing of the ore to produce a conventional concentrate was positive, with greater than 85% recoveries. Tests are also being conducted on other aspects of the ore, including bioleaching.

Roman says that additional drilling is under way to evaluate the orebody along strike and at depth.

In September, Exall began producing gold from its Rio Yaqui alluvial deposit 180 km southeast of Hermosillo in the state of Sonora. The mine is expected to yield 10,000-15,000 oz. gold per year at a cost of US$150 per oz. A 60-day production test is being carried out at Rio Yaqui to see if expansion is warranted. Present reserves are sufficient for 3-4 years of operation.

In addition to the Santo Tomas project and the Rio Yaqui mine, the company has three other copper projects: San Martin, El Gran Descoubrimiento and La Verde Grande.

An exploration program, which includes drilling, is expected to begin on the San Martin project within the next 60 days. The property contains a manto-type deposit with an indicated potential resource of 10 million tonnes grading 1.2% copper.

El Gran is a grassroots exploration play where initial work returned high-grade copper values up to 12%.

Previous work at La Verde Grande outlined a mineral resource of 2 million tonnes ading 2.4% copper, 2% zinc, and 70 grams silver and 0.15 grams gold per tonne. Recent drilling by Exall outlined additional zinc mineralization. Since there is more zinc then copper, Roman says that the company is looking to joint venture the project.

Exall also has an agreement to source gold projects in Mexico for American Barrick Resources (TSE). Since the program commenced in January, three properties have been advanced for further work. The first phase of acquisition and exploration on these three properties is being undertaken by Exall with funding being supplied by Barrick.