Tyler posts new number for Bahuerachi (June 11, 2007)

Nine months’ drilling by Tyler Resources (TYS-V, TYRRF-O) has succeeded in increasing the resource estimate on the Bahuerachi copper project in Chihuahua state, Mexico, about three times over.

Consulting firm Associated Geosciences puts the size of the measured and indicated resource at 525 million tonnes at grades of 0.4% copper, 0.55% zinc, 0.008% molybdenum, 4 grams silver and 0.03 gram gold per tonne, based on a 0.2% copper cutoff grade. Last year, Associated had estimated an indicated resource, using drill data up to July 2006, at 135 million tonnes grading 0.49% copper, 0.08% zinc, 0.009% molybdenum, 4.3 grams silver and 0.05 gram gold per tonne.

The estimate covers only the Main Deposit, the centre of three lobes of a 4-km-long porphyry system that intrudes a Cretaceous-age sequence of volcanic and sedimentary rocks. Carbonate and calcareous clastic sedimentary rocks host skarn-type deposits around the margins of the porphyry. Two other zones, the North Lobe and the Goat-South Porphyry Zone, are not part of the resource estimate although exploration drilling has confirmed that both are mineralized. Goat-South takes up about the same land area as the Main Deposit, and (in spite of its name) the North Lobe is larger.

The new resource reflects additional drilling in the skarn zones around the Main Deposit, where zinc is the primary metal; the contained zinc in the resource has increased by about twenty-fold. The main copper porphyry and skarn zones have also been expanded.

Silver, at an average grade of 4 grams per tonne, and molybdenum, at 0.008%, are shaping up to be important byproduct metals at Bahuerachi. The resource at a 0.2% copper cutoff grade contains 68 million oz. silver and over 43,000 tonnes molybdenum. There is an antipathetic relationship between copper and molybdenum grades that suggests lower-grade copper mineralization may still prove economic because of its higher molybdenum content.

Based on a cutoff grade of 0.2% copper equivalent, assuming prices of US$1.50 per lb. for copper, US$10 per lb. for molybdenum, and US$7 per oz. for silver, and not including zinc or gold, the measured and indicated resource moves to 868 million tonnes at grades of 0.3% copper, 0.46% zinc, 0.008% molybdenum, 3.2 grams silver and 0.02 gram gold per tonne.

The inferred resource at the same copper-equivalent cutoff is 162 million tonnes, with 0.27% copper, 0.35% zinc, 0.006% molybdenum, 2.5 grams silver and 0.02 gram gold per tonne.

The new calculation moved significant tonnages from inferred into indicated and measured categories, allowing for a more definitive economic study on the project. Tyler has engaged Independent Mining Consultants to do pit designs and is preparing a preliminary economic analysis. Metallurgical testing on zinc skarn mineralization is also in the plans.

While a cutoff grade of 0.2% copper is in line with cutoff grades used at operating open-pit copper mines in Mexico, bringing the cutoff down to 0.1% copper increases the resource to 908 million tonnes, at 0.29% copper, 0.44% zinc, 0.007% molybdenum, 3.1 grams silver and 0.02 gram gold per tonne.

At higher cutoff grades, the tonnage shrinks by about 40% for each 0.1% the copper cutoff is increased, while average copper grades remain about 0.2% above the cutoff grade. For example, the resource at a 0.4% cutoff grade is 188 million tonnes at an average 0.6% copper.

Three drills are on the property, and results are pending for a number of core and reverse-circulation drill holes on the Main Zone.