Wits Basin PR
Wits Basin Announces Letter of Intent to Acquire Silver Interest; Former Mexico Silver Producer to be Revitalized
WEDNESDAY, APRIL 19, 2006 7:19 AM
- BusinessWire
MINNEAPOLIS, Apr 19, 2006 (BUSINESS WIRE) -- Wits Basin Precious Minerals Inc. (WITM) today announced it has signed a letter of intent with Journey Resources Corp. (CA:JNY) and its wholly-owned subsidiary Minerales Jazz S.A. de C.V., whereby Wits Basin may acquire an undivided 50% interest in certain mining claims comprising the Vianey Mine Concession located in the state of Guerrero, Mexico approximately 250 kilometers south of Mexico City and 160 kilometers north of Acapulco.
LOCATION
The property comprises approximately 5,022 hectares (12,400 acres) less than 2 kilometers from the town of Atzcala which hosts modern infrastructure and facilities as well as a sufficient labor pool. There is existing electrical power at the mine as a major power line passes near the property.
On-site examinations by Journey personnel and available exploration data indicate a probability of discovering extensions to known silver-bearing veins on the property, both in the existing mine and the adjacent areas identified in the technical report, the Blakestad Report (dated of October 18, 2004 and revised March 10, 2005) by Rodney A. Blakestad J.D., C.P.G.
Geological maps published by the Mexican Department of Mines identify a series of lead-zinc-gold occurrences approximately five kilometers northwest of the property. The new concessions have been staked to cover the projected extension of these known ore bodies and comprise part of the property package. The Blakestad Report confirms the potential that these known mineralized zones likely extend into the vicinity of the Vianey Mine.
EXPLORATION RESULTS TO DATE
A review of past calculations of potentially mineable tonnages of mineralization above the -75 meter level, including the most recent exploration activities completed in 1997, and as reported by Mr. Peter Hawley in his 2000 reserve and drill resource study, provides an estimated total in all categories of 345,020 metric tonnes grading 2.13% lead, 3.66% zinc and 269 grams of silver per ton, which at current metal prices would have an in-ground value in the order of US$250/ton.
Mineralization at the Vianey Mine includes veins, breccias, lens and mantos of silver as well as poly-metallic (Pb-Zn) mineralization with local concentrations of gold and copper. Most of the veins are localized along NW-SE trending structures and E-W structures; the lenses occur in fault zones and as sulfide concentrations with calcite, gypsum and quartz between some bedding planes. Two major breccia zones of significance have been identified in the limestone, which are associated with calcite-gypsum-quartz gangue minerals and important amounts of associated silver.
Recommendations in the Minerales Jazz March 2005 report, which are being followed up, include lithological and structural mapping and aerial photography, or high-resolution satellite imagery interpretation of the area. The object of the work will be to locate and orient approximately 3,230 meters of diamond core drilling to test the grade, thickness and continuity of mineralization at depth and along the strike.
Management believes that the Vianey Mine and immediately contiguous property could host millions of tons of ore grade material. "With silver trading at a new 25-year high and base metals also into new high ground, we feel the outlook is for continued strong demand and prices," said Vance White, Wits Basin's CEO. White continues, "Despite current prices of about $13/oz, silver remains at a much lower multiple to gold than has otherwise been true historically and we believe it is appropriate for the Company to expose itself to a project of merit and strong technical attributes in this arena."
DEAL TERMS
In order to earn the 50% interest Wits Basin must:
1. Issue 100,000 shares of its common stock to Journey, by April 20, 2006, which initiates a 45 day due diligence period in order to have Wits Basin's consultants carry out a site visit, review technical data and research title work to be completed no later than June 15, 2006;
2. On or before June 15, 2006, issue 500,000 shares of its common stock and initiate a Program of Work as outlined in the Blakestad Report, a minimum expenditure of US$500,000 is required to be completed on or before December 31, 2006 for which a 25% interest will be earned in the property; and
3. On or before January 15, 2007, issue 500,000 shares of its common stock and initiate a secondary Program of Work with a minimum expenditure of US$500,000 to be completed on or before September 30, 2007 for which an additional 25% interest will be earned in the property.
About Wits Basin Precious Minerals Inc.
We are a minerals exploration and development company holding interests in three exploration projects and currently do not claim to have any mineral reserves on any project. Our common stock trades on the Over-the-Counter Bulletin Board under the symbol "WITM." To find out more about Wits Basin Precious Minerals Inc. (WITM) visit our website at www.witsbasin.com.
