El Capitan Precious Metals Inc (ECPN)

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http://www.businesswire.com/news/home/20041215005578/en/El-Capitan-Precious-Metals-Divide-Divsions-Strategic

December 15, 2004 12:08 PM Eastern Standard Time
PHOENIX--(BUSINESS WIRE)--Dec. 15, 2004--El Capitan Precious Metals, Inc. (OTCBB: ECPN) announced today that the Company is being divided into two divisions: the Precious Metals Division and the Iron Ore/Sand and Gravel Division.

Charles C. Mottley, ECPN President/CEO said: "We have been an exploration and development company but now we are entering into the operations phase with our properties. The Precious Metals Division has four properties: the El Capitan Mine, which is now being put into production with a ten ton per day pilot plant. AuRic Metallurgical Labs is developing a process to recover gold, platinum, palladium and silver. AuRic has the metallurgical experience in the platinum group metals which gives us the confidence to proceed with the additional expense of drilling and testing. We are looking forward to working with AuRic. Their precious metals testing of El Capitan samples has shown commercial values in the non-magnetic ore after it is separated from the magnetic iron ore," Mottley said. The Company has acquired the services of Dr. Clyde Smith a Geologist to work with AuRic and help in the development of the El Capitan precious metals.

The second precious metals mine is the COD property located near Kingman, Arizona, of which El Capitan owns 20%, but as the operator of the gold and silver mine receives 50% of the profits pursuant to a joint venture agreement. The permitting has been completed and production should begin in January 2005.

The third property is the Weaver mine near Congress, Arizona. This mine is a placer mine with six million tons of ore, of which 150,000 tons were mined in the early 1980's. There was free gold recovered with nuggets up to an ounce in size. There are claims totaling 40 acres leased from the BLM. El Capitan owns 100% of the Weaver mine and the Company is planning on putting this mine into production when the permitting is completed.

The fourth precious metals operation is located at the Congress Mine in Arizona where El Capitan has leased a building with the purpose of putting a pilot plant there. The Company is acquiring and moving equipment to the Congress location. The high grade ore from Nevada and Colorado should be producing a positive cash flow within 30 days. This plant will be expanded upon successful results. El Capitan owns 100% of the operations. Dr James Cousino, Chemist-Metallurgist is managing this operation for El Capitan.

The Company has three iron ore mines that it is developing. The El Capitan mine has a history of producing iron ore and it is estimated there is approximately 25 million tons of iron ore with a grade of 63% or better. The Company is presently marketing the iron ore to US Steel Companies. El Capitan has 40% ownership of this mine.

The second iron ore mine, the Rainbow Valley Mine is located on 1720 acres in Arizona. The Company's plan is to ship the iron ore to the Chinese market. The key element is the railroad transportation to the US and Mexican ports. The Company has hired Steve Balich, who previously worked for Phelps Dodge Mining Company for 28+ years, including 18 years in the transportation and logistics area. Mr. Balich heads up the transportation and logistic effort for El Capitan.

The Company has entered into an agreement with MG East, which is a strategic relationship because of their experience in the mining business. The Company has a 50-50 joint venture with MG East with cash flow beginning in January 2005. In approximately 90 days MG East, our "contract miner" will move equipment to the Rainbow Valley Mine where they will separate the iron ore from the sand and gravel. The sand and gravel will be sold in the Arizona market pursuant to a previously announced joint venture agreement. El Capitan owns 100% of the Rainbow Valley Mine.