Minorca acquires projects in Mexico’s Durango state

An agreement has been signed whereby Minorca Resources (VSE) can earn a 40% interest in Mexican mining company BLM Mexicana S.A. from Bharti Laamanen Mining of Sudbury, Ont. Minorca has the option to acquire all the shares of BLM.

BLM, which is 80% owned by Bharti, is the owner of the Terneras Mine property located in the Velardena Mining District, State of Durango, Mexico. The Terneras property includes three old mines — Terneras, El Cobre and San Diego — and a 400-ton-per-day concentrator.

The Terneras mine itself, which is the largest of the three, contains three deposits: Terneras, Santa Juana and San Mateo.

Mineralization occurs in stockworks and narrow veins that range from 0.5 to 4 metres in width. The vein system at the Terneras deposit has a strike length of 1.4 km, and extends to a vertical depth of 600 metres.

The deposits collectively contain an estimated mineral inventory of 1,866,000 tonnes of broken ore (backfill) grading 2.6 grams gold and 315 grams silver per tonne. In addition, the three deposits contain in-situ reserves of 900,000 tonnes. There are also two principal mine dumps containing at least 500,000 tonnes of oxide material grading 2 grams gold and 200 grams silver and 1.5% lead, 1.2% zinc and 0.7% copper.

Under the agreement, following a due diligence period, Minorca may purchase 40% of BLM by issuing 1.1 million treasury shares and a promissory note for $200,000 payable over a 24-month period. Following the completion of a feasibility study and a production decision, Minorca has the right to finance development of the property by way of loans to BLM. It also has the option to purchase Bharti’s remaining 40% equity interest in BLM by issuing 2.2 million treasury shares. Minorca can purchase the final 20% interest in BLM from the Mexican owner for a payment of US$1 million.

Minorca and Bharti plan to carry out a feasibility study immediately and design a development program.

In other news, Minorca has arranged two private placements. One placement consists of 1.425 million shares at 23 cents each for gross proceeds of $327,750. Each share is accompanied by a warrant which can be redeemed for an additional share at 30 cents for a period of 12 months.

The second placement consists of 360,000 shares at 85 cents to raise $306,000. Each share bears a warrant which can be exchanged for an additional share at $1.11 for a period of one year.

The funds will be used for general working capital and new acquisitions.