THE COMPANY IS IN THE PROCESS OF DEVELOPING A QUALITY PORTFOLIO OF KEY RESOURCE PROPERTIES.
THE MERCEDES 100 PROJECT,
AREQUIPA GOLD TREND, PERU.
Brookmount’s principal resource property is situated in central Peru, 300 kilometres east of Lima along the geological trend hosting the prolific Arequipa Gold Deposit. The area is heavily mineralized, and for many years has been an important Gold/Silver/Copper/Zinc-producing area. Since 1994, the previous owners of the property have expended over $ 3,000,000 USD on this project, including additions to the existing underground structure with over 2,000 metres of raises, addits and shafts, as well as the construction of a road into the project site.
The Company obtained the rights to the Mercedes 100 Project in 2002. The property consists of six contiguous claims covering a total area of 2,611.31 hectares broken down as follows:
Mercedes 100 Claim 450.00 hectares
Celeste Claim 298.84 hectares
Celeste 2 Claim 218.58 hectares
Celeste 4 Claim 200.00 hectares
Nuevo Heraje Cuatro Claim 996.96 hectares
Nuevo Charo Claim 446.93 hectares
The existing infrastructures at the site are excellent. The property is easily accessed from Lima by paved mountain highway to Conception, then by good paved road to Santa Rosa de Ocopa. A good all-weather gravel road connects Ocopa with Satipo, a village in the Amazona river basin. The Mercedes 100 camp is 36 kilometres from Santa Rosa. A power line follows the main road past the mine and water for drilling is readily available. There is a narrow gauge railway connecting to the nearby smelting centres of La Oroya, 130 kilometres to the west.
The Mercedes 100 Project has sizeable reserves and an attractive payback rate. In order to further evaluate the project, the Company engaged the services of Guillermo Salazar, M.A., P. Geol., a geologist with extensive South American experience. His responsibilities include design of the initial drill program and the testing of the perceived geological potential of the property’s reserves. In a qualified report to the previous owners, Dr. Adrian Mann commented that the project was based on sound scientific principle and that “previous effort has been concentrated on the vein deposits, rather than the more massive potential of the disseminated deposits,” and that “the time has come to address the potential of these larger features.”
The following reserve values were assessed by Howard Coates of MPH Geological Consulting for Leader Mining Inc., the former owners in 1996:
Proven Reserves:
21,500 tonnes, unspecified grades
Potential & Prospective Reserves:
480,000 tonnes, unspecified grades
Possible Reserves:
1,950,000 tonnes, unspecified grades
Gold From 0.043 oz/t to 5.904 oz/t
Silver From 0.13 oz/t to 136.77 oz/t
Zinc From 0.30% to 18.61%
Lead From trace to 16.50%
This report also stated that the geological potential for the discover of additional polymetallic mineralization was good and that a fully integrated exploration program would include geological mapping, surface and underground channel sampling, airborne and ground geophysics, and geochemical and alteration studies, diamond drilling.
A recent cost study prepared by Paul Sterling of Kanada Mobile Services Ltd., indicated that “This Mercedes 100 Project Design & Cost Study indicates that the project is both technically and economically feasible.” The base case shows an internal rate of return at 143.2% and a net present value of $ 35.9 million USD at an 8% discount rate. The project will require further drilling and metallurgical test work in order to move the possible reserves into the probable/proven sector. A definition of the process design and metal recovery methods is also required.
ROCK CREEK, BRITISH COLUMBIA, CANADA
Brookmount’s newest property with significant volcanogenic massive magnetite-sulfide potential in south-eastern British Columbia, Canada, covering an area of approximately 3160 hectares known as the Rock Creek Property situated 10 kms southeast of Rock Creek, B.C. in the Greenwood Mining Division. The southern property boundary corresponds to the Canada - US border and is centered about 10 kms NW of the Crown Jewel open pit gold skarn deposit in Washington with a resource estimate in excess of 1.4 million ounces of gold that has cleared final hurdles and is scheduled to go into production this year. Recent work that has been carried out on a portion (Ket 28 occurrence) of the Rock Creek Property, an assortment of mapping, assessment reports, silt and soil geochemistry, air and ground geophysics, with several programs of shallow drilling has yielded significant and outstanding values. These values range from 1.9 g/t to 52.22 g/t of Gold. An aeromagnetic survey of the area conducted by Crownex Resources Corp. in 1989 indicates geological and geophysical characteristics similar to the Crown Jewel Deposit. A large and strong aeromagnetic anomaly characterizes both the Crown Jewel and the Rock Creek ground and suggests that the two are caused by the same kind of geological features. There are indications on the Rock Creek Property of a potential of volcanogenic massive magnetite-sulfide environment that may be very significant. The management of Brookmount feels that this acquisition is a significant move for the company in its desire to diversify its holdings with solid projects and add to shareholder value.
GOLD, SILVER, COPPER & ZINC MINERAL CLAIMS,
NORTHWESTERN QUEBEC, CANADA
Brookmount has also acquired a 100% interest in five mineral claims in Chazel Township near the mining town of Rouyn-Noranda in northwestern Quebec, Canada. The claims cover an area of 500 acres and are situated in an area well known for metal discoveries including Gold, Silver, Copper and zinc.
Resource Macamic Inc. and BHP Minerals (Canada) Ltd. have completed two extensive gold exploration programs on the company’s property here, indicating considerable potential for Gold and/or base metal deposits. The property represents an excellent opportunity for a joint venture or as a revenue source for a cash sale. The Company will re-examine previous exploration data in order to form its future exploration plans here.
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