And voila....something for the Germans to mull over:
Sheffield options area of past-producing copper mines
2006-04-27 07:53 ET - News Release
Mr. David Jenkins reports
SHEFFIELD RESOURCES ACQUIRES FORMER COPPER MINES
Sheffield Resources Ltd.'s wholly owned subsidiary American Sheffield Inc. (ASI) entered into an "exploration permit with option to lease and purchase" with California-Engels Mining Co. The agreement brings under Sheffield's control approximately 882 acres of patented and fee simple lands, containing two famous past-producing copper mines. The property is located approximately 500 to 2,000 metres to the east of Sheffield's Moonlight project, where a temporarily weather halted drill program of up to 30,000 feet (9144 metres) of "HQ" core drilling is being carried on. The drill program is designed to verify and enhance the non-National Instrument 43-101 compliant 180 million tons grading 0.39 per cent copper reported by Placer Dome Inc., for an open-pit designed as part of an unrealized mine plan for the Moonlight deposit. Mineralization as drilled by Placer is open to depth and along strike. The terms of the agreement are as follows:
Exploration permit: Sheffield paid $20,000 (U.S.) on signing of the agreement to initiate the exploration lease, which has a term of 120 days for completion of due diligence studies and selection of lands to be included in the mining lease. The exploration permit terminates when Sheffield notifies California-Engels of its decision as to which if any lands Sheffield wishes to include in a mining lease.
Mining lease: Sheffield will pay $1,000 (U.S.) to initiate the mining lease and must as soon as practical submit a National Instrument 43-101 compliant report to the TSX Venture Exchange. Upon acceptance by the TSX Venture Exchange, Sheffield will issue 50,000 common shares to California-Engels.
On each anniversary of the exchange acceptance during the currency of the mining lease, Sheffield will pay California-Engels $20,000 (U.S.) and will on each of the first two anniversaries issue to that company 100,000 Sheffield common shares.
In the event Sheffield completes a bankable feasibility study on the California-Engels properties or begins construction of a mill for commercial production of mineral products from the property, Sheffield will in the first instance of each event issue to California-Engels 200,000 Sheffield common shares.
Sheffield will during the currency of the mining lease perform a minimum of $25,000 (U.S.) or work on the property and will pay any land taxes assessed against the property.
Purchase of property: Sheffield may, at a time of its selection and before commencement of commercial mining on the properties, purchase the California-Engels properties that are subject to the agreement by paying to California-Engels at Sheffield's election either $10-million (U.S.) or issuing one million shares of Sheffield common shares. California-Engels reserves for itself the rights to timber on the property and the right to manage said timber as a tree farm. Said timber management activities may not interfere with Sheffield's exploration or mining activities. In the event Sheffield notifies California-Engels that the timber must be removed to make room for Sheffield's activity, California-Engels must remove the timber or Sheffield may harvest the timber on behalf of California-Engels and recover Sheffield's costs by deducting them from the proceeds of the sale of the timber.
California-Engels also reserves for itself the rights to specified dumps of broken rock, which may be sold to third parties or used in maintaining the roads on the property.
California-Engels further reserves for itself a 2-per-cent net smelter return royalty capped at $25-million (U.S.).
On purchase of the property the annual payments increase to $60,000 (U.S.) and are deductible from future royalty payments.
The property
The agreement brings under Sheffield's control zones of copper mineralization that were mined underground as high-grade deposits by California-Engels during the early 20th Century and were subsequently explored by Placer as large-tonnage porphyry copper deposits in the 1960s.
During the production era the Superior and the Engels mines produced a reported 161 million pounds of copper from 4.5 million tons of ore. George Cavey, PGeo, in his report of March 22, 2005, reports that Placer determined that at the Engels mine there is a two-million-ton open-pittable resource (non-NI 43-101 compliant) containing 0.63 per cent copper. According to Placer, there is an additional 19-million-ton indicated and inferred resource (non-43-101 compliant) grading 0.63 per cent copper. There are smaller tonnages of much higher-grade mineralization included in the above non-NI 43-101 compliant resources.
Mr. Cavey also commented on the Superior mine, describing it as a quartz monzonite hosted stockwork vein system that exhibits porphyry like attributes. Mineralization historically was mined from steeply dipping eight to 20 feet thick bornite and chalcopyrite rich veins. Mr. Cavey states: "A large body of disseminated copper mineralization has been identified at Superior as the result of work completed by Placer/Amex. They drilled 96 drill holes or approximately 50,200 feet from 1964 to 1968. Preliminary computerized "ore reserves" (not NI 43-101 compliant) were estimated by Placer/Amex of 43 million tons grading 0.559 per cent copper with a 0.30-per-cent cut-off." Sheffield's qualified person believes the copper mineralization is open to major expansion by further drilling.
These reserve and resource estimates are considered historic, neither Sheffield nor the qualified person have not done sufficient work to classify the historical estimates as current mineral resources or reserves as defined in NI 43-101. Sheffield is not treating the historical estimates as current mineral resources or reserves and therefore the historical estimates should not be relied upon.
The Superior mine is open with potential access on several levels to areas where the mine openings remain in good shape. Sheffield's due diligence included reviewing old mine sampling plans and limited check sampling by Robert Wetzel, Moonlight project manager, and Winthrop Rowe, CPG, and consulting geologist. Linear sampling along level 1 by Placer and check sampled by Sheffield returned the following results in sequence from the level 1 portal:
Length Copper
70 feet 0.38%
130 feet 0.77%
200 feet 1.80%
130 feet 0.55%
160 feet 0.38%
Channel samples by Sheffield from the level 1 drift returned the following:
Length Copper
110 feet 2.6%
Sequential historical chip channel and percussion drill sampling by Placer/Amex down crosscut No. 2 returned:
Length Copper
50 feet 0.49%
140 feet 1.20%
250 feet 0.47%
Sequential historical chip channel and percussion drill sampling by Placer/Amex sampling down crosscut No. 3 returned:
Length Copper
40 feet 0.56%
160 feet 1.40%
50 feet 0.31%
Sheffield also sampled narrow intervals of much higher-grade mineralization such as:
Length Copper
6.5 feet 12.9%
4.5 feet 6.8%
Historical chip channel and percussion drill sampling by Placer/Amex sampling along the "upper adit (A) level" was not check sampled by Sheffield, but was reported in mine records to have returned the following results in sequence from the level portal:
Length Copper
120 feet 0.84%
220 feet 0.43%
70 feet 1.30%
105 feet 0.35%
108 feet 0.85%
Sheffield will have to carry out further comprehensive sampling programs to verify the historical sampling results, to determine their significance and to prove continuity of the wide plus-1 per cent copper mineralization along strike and up and down dip to other levels in the Superior mine.
Wetzel believes there is strong potential to prove wide zones of greater than 1 per cent copper mineralization exist. More specifically he believes that they have excellent potential for continuity laterally along strike, continuity up and down dip and that they have good potential for near-term profitable mining by low-cost block caving or sublevel stoping methods.
Quality control and assurance
A rigorous quality control and assurance program (QC/QA) is in place, including systematic inclusion of standard sample materials, blank samples, duplicate samples and interlaboratory check assaying. Samples are sent in sealed containers to ALS Chemex in Reno, Nev. ALS Chemex is a recognized as an ISO 9000 registered laboratory. The control samples and duplicate assay results received for the drilling program demonstrated to Sheffield Resources that the results are considered reliable. Copper is determined by atomic absorption spectrometry after a four-acid digestion of a 0.4-gram aliquot. A second copper determination plus analyses of silver and other metals are made by ICP-AES after a three acid digestion of a 0.4-gram aliquot.
Robert Wetzel manages the exploration program, a California-registered professional geologist and qualified person. The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101. David M. Jenkins, PGeo, and president of Sheffield Resources, is designated the qualified person for the Moonlight project.
Effective April 7, 2006, Sheffield has been continued into British Columbia from Alberta. As a result, the company's governing corporate legislation is now the Business Corporations Act of British Columbia.
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