Shareholder Updates 2013
June 19, 2013
Shareholder Update
June 19, 2013
Dear Medinah Minerals, Inc. Shareholders:
Compañia Minera LDM Chile Management has informed Medinah Minerals, Inc. that the first shipment of copper ore to the San Pedro processing plant at Til Til has now been delivered. Regular daily shipments will continue until the targeted capacity of 400 tonnes per day is achieved. An update of the Las Dos Marias project developments, as submitted by Medinah Mining Chile, is attached below.
Señor Juan José Quijano Fernández
President/CEO
Note: This News Release may contain certain “forward-looking statements” within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Medinah Minerals, Inc. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s expectations are disclosed under the heading “Risk Factors” and elsewhere in documents filed from time to time with the United States Securities and Exchange Commission and other regulatory authorities.
LAS DOS MARIAS
Project Update submitted by Medinah Mining Chile
June 15, 2013
Company Directors of Medinah Mining Chile, LDM Chile, and a representative from Medinah Minerals, Inc. recently met in Santiago Chile. One of the purposes of the meetings was to view the mining progress at the Las dos Marias project, to meet with refinery officials, to determine the potential for long-term production from the copper and gold zones encountered at LDM and to discuss the relationship of the LDM mineralization to that at the Altos de Lipangue properties. The LDM properties adjoin the Altos de Lipangue properties and are located some 30 kilometres north of Santiago, Chile. Recent tunnelling designed to intersect two gold bearing quartz veins discovered in a previous diamond drilling program, has exposed an extensive skarn structure which appears to be associated with a porphyry intrusive and which contains high grade copper values.
Company Director, Juan José Quijano Fernández, has been investigating, concentrating and refining operations that are in close proximity for shipping. The nearest of these refineries is some 35 km from Las dos Marias (LDM). The mill operators agreed to send out a Geologist and a Mining Engineer to study the deposit and examine the potential for long-term production from the project.
Mill Operations Management and ownership met at the LDM properties with Sr. Quijano, et al and began their investigations inspecting the rock and tunnel work that has been done by Minera LDM Chile's contract crew. They approve of the calibre of the work and the attention to detail regarding the meeting of all safety requirements. The LDM mining crew are able to meet production requirements for continuous sufficient ore supply, having developed and rehabilitated over a mile of tunnels to date. The Geologist turned his attention to investigating the structure containing the copper ore. The mill would require up to 400 tonnes of ore per day, uninterrupted except as planned for in advance, for long-term production. The geologist studied the underground workings, examined the DDH-01 and DDH-02 drill logs, continued his observations outside of the mine and traced the structure on surface where exposed. He has extensive knowledge and experience with such deposits in Chile. Visual observation has determined the approximate size of this skarn structure to be 400 metres by 500 metres by 200 metres. This is a preliminary estimate of reserves, not proven reserves. However, judging by the competency of the copper ore zone exposed in the tunnel work, visual surface observation and the consistency of mineralization, a reasonable expectation of the size of the deposit may be assumed. For the purposes of this update, the deposit is assumed to contain ore grade material, roughly 10% of the total extent of the structure, or possibly 3 million to 10 million tonnes of ore-grade copper.
The gold bearing quartz vein structures are entirely separate and distinct from the copper skarn. As the tunnel work progressed to its target at DDH-02, several large quartz veins were encountered crosscutting the copper bearing skarn. These veins are large, from one metre, up to 11 metres wide and have returned assays of 3 grams of gold per tonne to 11 grams of gold per tonne over 11 metres width. The geologist was able to determine that there would be sufficient ore grade tonnage contained in these veins to warrant shipping the gold ore to a second refinery. Unlike the skarn structure, he is not able to provide a size estimate for the gold zones without drilling. Owners from a second mill were brought in following this initial examination of the gold and copper bearing structures at the LDM project.
After several days spent investigating the LDM project, Chilean mining and milling experts confirm that the LDM mining crews are professionally competent and can be relied upon for ongoing production requirements. To augment the mining operations, the mill operators are able to provide on-site professional supervision to ensure constant production rates for mill supply.
Mill operators will also provide expertise to assist in improving operations and ensuring or expanding supply. The mill operators and LDM Management have determined that there is sufficient size to the copper deposit to warrant a long-term milling/refining arrangement and also sufficient size to the gold deposit to warrant a long-term milling/refining arrangement with a second mill.
The LDM mining discoveries greatly enhance the value of the Altos di Lipangue claims. Additional land should be secured at the base of the mountain to provide for the recommended future mill to be constructed at the base of the property. Road improvements are underway to allow for immediate shipping to the Til Til mill. A new road will be constructed shortly to reduce travel distances for a budget cost of approximately $50,000.
Mining is progressing toward the Altos properties and may well continue into those properties.
Management of Minera LDM Chile and Medinah Mining Chile have agreed upon a plan of shipping and refining creating cash flow. Management had planned to reach this stage of development much sooner. LDM had reported previously that it would begin shipments to the Enami mine, approximately 230 kilometres away. Several factors arose to reconsider this procedure, not the least was that the Chilean Ministry of Transportation imposed a highway road restriction of 28 tonnes, eliminating capacity efficiency of the Enami highway hauler of 40 tonnes. Additional factors that are a benefit our operations also caused ore shipping to be delayed until now. These include the fact that the closest mill to Lipangue has just completed an expansion of their facility. This expansion now provides an increase in their production capability sufficient to permit the mill to accept LDM ore for refining. Proximity of this mill/refinery allows LDM to ship at a greatly reduced cost. The mill will provide trucks for hauling directly from the mine site. This means that we have eliminated the step of hauling 10-tonne loads to the bottom of the mountain to be transferred to the 40-tonne trucks. This trucking change also required additional time for road repair and upgrading work to handle the larger loads directly from the mine site.
Ore shipments start at 200 TPD of at least 3% copper increasing to 400 tonnes per day. There are currently no shipments of the gold ore scheduled as that will be worked in when we have organized a full copper schedule which is tested and working smoothly.
The following are some assay results of channel samples taken by company geologist in the main copper skarn zones which represents the copper ore ready for processing;
Copper% Silver g/t
5.85 85.36
3.13 13.19
4.53 53.64
6.52 52.0
2.42 42.0
4.26 26.25
4.20 20.41
While on site, the mill/refinery geologist sampled an 11-meter width of gold-bearing quartz vein that returned 7 grams of gold per tonne and extensively sampled at the copper deposit that averaged a minimum of 4% copper, and 40 grams silver.
It is anticipated that additional ore will be encountered as tunnel future work progresses toward the Gordon breccia targets. For example, as previously reported in current operations, several large gold-bearing quartz veins were encountered cross cutting the tunnelling operations. Also new copper structures were discovered as mining progressed. The company geologist additionally noted the discovery of a breccia outcropping toward the Altos properties on the LDM project site. This will no doubt prove to be associated with the copper skarn that we are currently mining.
Medinah Mining Chile Management notes that there are additional deposits of high-grade copper and molybdenum that exist on the southwest side of the Altos. These claims are owned by Medinah Mining Chile and Management is considering designing a mining program similar to the LDM project for the extraction, shipping and refining of that ore. Mill personnel have examined those properties and conclude that a project can be set up to handle that molybdenum concentrating and refining project concurrent with the other operations
It is the intention of the mill operators to secure long-term supplies of ore for their newly expanded mill and concentrator. Medinah Mining Chile management are optimistic and encouraged that milling company experts with substantial knowledge of Chilean mineral deposits, recognize the enormous potentials at LDM and Altos de Lipangue. The north road upgrades are now completed and shipments to the Til Til plant will be underway this week.
The profit return and structure of the LDM contract with Medinah Mining Chile is as follows:
Refinery proceeds are allocated:
1. Medinah Minerals, Inc. receives 30% of net mill proceeds.
2. The five shareholders of LDM Chile, each receive a 20% interest of the remaining 70% of net proceeds. Medinah Mining Chile is the owner of one 20% interest.
3. The Company of LDM Chile is responsible for the day-to-day costs of operations of the Company such as administration, taxes and other such expenses.
4. The LDM/Medinah Mining Chile agreement required a minimum initial investment of $1 million that has now been exceeded. The project scope has far surpassed original expectations and should supply a long-term source of profits to the participants.
Señor Juan José Quijano Fernández
President/CEO
Medinah Mining Chile
