Siga Resources (OTCBB: SGAE):
Siga Resources Inc. is a mineral resource exploration and development company incorporated in Nevada in 2007. Siga is currently based in South Lake Tahoe, California.
Under new management since September 2010, Siga has a revised corporate strategy and is targeting precious metals properties that have the potential for production and early positive cash flow.
Siga is reviewing a number of precious metal properties that are near to, or in production, located in North and South America and has two precious metals projects in its portfolio at the present time.
Project 1: Lucky Thirteen Placer- Hope, British Columbia:
Siga has entered an agreement to acquire 100 percent interest in the Lucky Thirteen placer claim located five kilometers north of Hope, British Columbia Canada. Siga's acquisition agreement provides for purchase of the property for $1.5 MM CAD through a schedule of payments over a period of 4.5 years. Under the agreement, Siga grants a 3 percent net smelter royalty to the claim owner.
The Lucky Thirteen Placer claim is 168 ha (415 acres) in size. The claim is located on the Union gravel bar on the north bank of the Fraser River.
The claim lies adjacent to both the Trans-Canada Highway and the Canadian Pacific Rail line, making access easy and very low cost. Main power lines also traverse the area. The use of existing infrastructure which Siga will not need to provide has a very favorable affect on overall development, operational and mining costs throughout the projects life.
The initial targeted area covers an approximately 50 ha (124 acres) portion of the entire placer claim.
An analysis of the geology and of available past production testing records, and a survey indicates the initial area of interest contains 12 million cubic yards (21 million short tons) of sand and gravels to a depth of 20 meters above sea level. Of course, not all of this volume may produce ore grade values, but analysis of available records shows clearly economic gold, and anomalously high platinum group element values. Importantly, the platinum values were likely not suspected by most miners and explorers focused on Gold. In any event, recovery methods for metals beyond gold from black sands were crude and not generally available to smaller operators who relied predominantly on gravity separation (panning and sluices) and mercury amalgamation of black sand concentrates.
Estimated Values of Deposit:
Because of the small number of recorded samples and uncertainties about the nature and location taken of many early samples, a systematic statistical treatment of the data is not appropriate or valid at this time. New data will be required for this.
An empirically derived but realistic estimate of the average gold value encountered by reported testing to date, is on the order of $42 per cubic yard at 2007 gold price of $675 per oz. This extends to about $75 per cubic yard at recent prices of $1200 per ounce.
Additionally, recent trace value analyses from black sand concentrates show that platinum group elements (PGEs) have the potential to equal the value of gold in the gravels on a per cubic yard basis. Success in quantifying recoverable platinum group metals could produce gross values of $150 Per cubic yard.
Verification of average gold values and distribution of PGEs in the concentrates, is the driving factor for the planned bulk sampling and evaluation program.
The evaluation program is already permitted and will commence as soon as field conditions allow. The sampling phase is expected take 60 to 90 days to complete.
The cost of the program is estimated at approximately $400,000 CAD, and consists of a series of 12 or more test pits down to the water table in the gravels. Samples taken will be accurately located, logged in detail and run through a gravel washing plant, sluices and jigs on site. Aside from assays of free gold, the concentrates produced will be individually analyzed in detail to identify the occurrence and characteristics of the PGEs. If PGEs exist in commercial quantities these samples will provide the data required to design a recovery method to produce an economic grade black sand concentrate. Siga currently plans to use existing commercial smelting/refining facilities to process the concentrates to a salable product.
Upon completion of the evaluation program, the project production design will commence and the specified mine process equipment will be acquired.
The long term permits and approvals for extended operation have already been put in motion. Siga believes commercial production could begin in 2011
The gravels associated with the Union Bar, which are not owned by Siga, have value as construction materials. Siga is in contact with the gravel owners, with the goal to agree on a joint venture or similar agreement to produce and market construction aggregates from the same oro a related operation that produces placer minerals. Not currently included as part of estimated recovered values, the sale of aggregates could add a significant revenue stream to the entire project. If favorable economics are developed for aggregates, this will be added to the project's scope, after an agreement is made with the third party owners.
Project 2: Valolo Gold Exploration claim- Republic of Fiji
Siga controls a 100% interest in the Valolo Gold Claim located in the Republic of Fiji. Valolo is the project that Siga was founded to explore. The current corporate focus is toward more advanced or near production projects than the Valolo, therefore, is a second priority to other projects. Siga's management still believes the Fiji project has merit.
The Valolo claim was acquired due to its location in a caldera environment in the Savura Volcanic rock group, which underlies the property. These volcanics are exposed along a wide axial zone of the Savura volcanic complex. The relevance of these rocks to the Valolo property is significant. Approximately 20 miles to the west of Valolo, in the same or a similar system, the Nasoata Gold Mine and other prospects have reported gold production in aggregate of over 1 million ounces between 1956 and 2002.
On a regional basis the area of Fiji in which the Valolo Claim is located is notable for epithermal gold mineralization such as that exploited at the Nasoata Mine. Structures and shear zones affiliated with mineralization on adjacent properties pass through the Valolo Claim.
Siga's founders commissioned a professional geologic report on the Valolo area, which recommended a specific grass-roots sampling program be run, based on the geologic and tectonic connections to known production areas. The project has not been funded to date.
Siga believes the referenced program to determine the potential of Valolo to host epithermal gold mineralization should be performed. The initial program cost is under $50,000 and the Company is considering how to schedule this project.