Monday, 31 October 2011

Dragon Mining discovers new gold zone east of Svartliden Mine in Sweden

Dragon Mining (ASX: DRA) has unearthed a new zone of gold mineralisation at the Svartliden Mine in northern Sweden after receiving assays from the first three diamond drill holes at the Far East target.

The three holes are from a six hole program designed to follow-up promising geology identified from earlier drilling in the Far East area, which is located about 800 metres east of the open pit.

The best intercept was 6 metres at 6.69 grams per tonne (g/t) gold at a vertical depth of about 350 metres below surface. Each hole intersected material characteristic of the Svartliden host sequence and results for the other holes are pending.

The results provide encouragement for the company as they have been achieved within six months of acquiring full ownership of the mine.

Peter Cordin, executive chairman, said “the discovery of mineralisation and the strong intercept at the Far East target is extremely encouraging for the company.

"The Far East target is just one of a number of near mine areas be evaluated over the coming months, as the company strives to extend the life of the Svartliden mine.”

The Far East target was identified through an ongoing program of geological and geophysical modelling of the near mine area.

The company will commence planning of the next phase of drilling upon completion of the current campaign, with the objective to better define the extent and geometry of the identified mineralisation.

On September 14 Dragon announced a boost to the gold resource at the Svartliden Gold Mine. With the inclusion of stockpiled material, the total resource inventory for the mine is 1,295,100 tonnes at 3.7g/t gold for 157,100 ounces.

Svartliden is an open pit mining operation with ore processed on site through a carbon in leach plant, with first production in March 2005. By 30 September 2011 the operation had processed 2.65 million tonnes at 4.55g/t gold for 273,674 ounces of gold.

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Montezuma Mining Company raises the stakes at Butcherbird with 47m at 1.81% copper intercept

Montezuma Mining Company (ASX: MZM) continues to build momentum at the Butcherbird Copper Project, with some impressive copper intersections from reverse circulation drilling.

The latest highlight is the broad 47 metres at 1.81% copper from 113 metres, which includes a stunning high grade intercept of 6 metres at 6.08% copper and 631 parts per million cobalt.

What is so significant about the intersection is that it was discovered at the very start of the recent drilling campaign, with assays still pending for 17 of the 19 hole program - which covered around 2700 metres.

Providing a further prospectivity boost to the project, previously completed IP, Aeromagnetic and EM surveys highlight numerous copper/cobalt targets over 6 kilometres of strike - which remains open.

Scoping Study points to robust economics

In another plus for the company, just last week a Scoping Study for the development of the extensive manganese mineralisation at the project.

The study was completed by independent consultancy Engenium Pty Ltd and investigated the development of a mine producing between 0.5 million tonnes and 1 million tonnes per annum of lump and chip ore grading a nominal 36% manganese with a mine life of at least 10 years.

The study has projected an NPV of up to A$376 million with an IRR of up to 59%, based on the Yanneri Ridge JORC Inferred Resource of 64.7 million tonnes at 11.2% manganese (8% manganese cut off).

A yield of 20% of extractable product at 36% manganese was assumed based on the DMS studies, underpinning potential production of over 12 million of lump and chip product with a 1:1 stripping ratio from this deposit alone.

Importantly, Montezuma expects resource upgrades based on further drilling to add to the potential product inventory, and may support a longer mine life and/or increased production rates.


Montezuma Mining will now aggressively push towards production with further engineering investigations and a more detailed Feasibility Study as well as actively investigate potential financing avenues to fund the capital requirements of a manganese mine at Butcherbird.

With the Butcherbird project now having a projected net present value of A$376 million against a market cap of just A$20 million, the company's stock price appears to have significant upside.

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Coppermoly in trading halt pending an announcement on a capital raising

Coppermoly (ASX: COY) has been granted a trading halt by the ASX pending an announcement on a material capital raising.

While the company did not reveal any further details of the capital raising, Coppermoly is currently in a very interesting position.

Just last week the company announced it has signed an agreement with ActivEX (ASX: AIV) to farm-in to the Esk Trough Project in South East Queensland, gaining the right to earn a 51% interest with the option to advance its interest to 70%.

The trading halt will be in effect until an announcement is made to the market or no later than the start of trading on Thursday, November 3.

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Navaho Gold drills to follow up on Whitehorse Flats gold hits, Nevada

Navaho Gold (ASX: NVG) has commenced drilling at the Whitehorse Flats Gold Project in Nevada, the fourth project to be drilled before the end of the year.

Newly minted Navaho has two rigs operating in the area, and is aiming to complete drilling on five projects in Nevada before the northern hemisphere winter.

The drill program at Whitehorse Flats will follow up on rock chip samples from outcropping, which returned grades ranging from 0.32 grams per tonne (g/t) gold to 1.82g/t gold.

Navaho plans to test the down-dip extensions of outcropping zones of gold anomalous silicification along with structural targets identified from the interpretation of gravity data.

About 1,500 metres of reverse circulation drilling will be completed in 8‐10 holes, with results expected to be received in December.

Stevens Basin drilling completed

In other company news, Navaho has completed a drill program at the Stevens Basin Gold Project, also in Nevada.

This drilling program was designed to test the anomalous gold mineralisation intersected in one hole drilled in June 2011, which returned 15.2 metres at 0.18g/t gold from 35 metres depth.

It also tested a magnetic target with features similar to the 2.23 million ounce Archimedes/Ruby Hill deposit owned by Barrick Gold.

Samples have been submitted for assay, with results pending.

Navaho hits the exploration trail

Since listing on the ASX in April 2011, Navaho has been working hard to explore the projects it has an interest in.

Both the Whitehorse Flats and Stevens Basin projects are subject to farm-in agreements with Columbus Gold (TSXV: CGT), with Navaho able to earn up to a 70% interest in each project.

Navaho CEO Mark Dugmore said, “it is pleasing to see drilling commence on our fourth project in Nevada since listing in April this year. To date 32 reverse circulation holes have been completed and one core hole commenced totalling over 5000 metres and 600 metres of drilling respectively and it is anticipated that before the end of the year Navaho will have completed approximately 45 holes for nearly 9000 metres of drilling on five projects”.

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Aurium Resources acquires iron and manganese exploration tenement in WA

Aurium Resources (ASX: AGU) has acquired an iron and manganese exploration application in the Earaheedy Basin in Western Australia for a cash consideration of $15,000.

The tenure is located 14 kilometres southeast of Cazaly Resources' (ASX: CAZ) Cecil Rhodes Project, which is subject to the recent farm-in by Anglo American (LON: AAL).

The exploration tenement (EA69/3025) covers parts of the iron-rich Frere Formation in the Earaheedy Basin, which is highly prospective for large scale iron ore deposits. The new tenure is also prospective for manganese mineralisation.

The Frere Formation is found on the northern margin of the basin, in the Lee Steere Ranges, and will be the primary focus for iron ore exploration upon grant of the tenement.

The iron formations generally increase in thickness and abundance in a north westerly direction within the basin, and recent detailed studies have indicated similarities to the economically important iron formations of the Lake Superior region of North America.

There is also potential for stratiform bedded manganese mineralisation in the Karri Karri Member of the Chiall Formation that overlies the Frere Formation and is believed to share similarities with the giant Kalahari manganese field in South Africa.

Past iron exploration work in the 1970s, principally by Amax Exploration and BHP (ASX: BHP), outlined extensive areas of hematite/goethite enrichment with surface grades of up to 66% Fe along the Frere Formation.

More recently, ground traverses and rock chip sampling of the same Formation by Dragon Energy (ASX: DLE) and Zenith Minerals (ASX: ZNC) have returned values up to 59.6% iron and 64.2% iron, respectively.

Drilling completed by Cazaly at its Cecil Rhodes Prospect, included 34 metres at 54.4% iron (including 22 metres at 58.1% iron), and 22 metres at 57.8% iron and 26 metres at 55.1% iron.

The results support the Frere granular iron formations as being an important iron resource. Fortescue Metals Group (ASX: FMG), Rio Tinto (ASX: RIO), BHP Billiton and Atlas Iron (ASX: AGO) have land-banked substantial parts of the basin, including the Frere Formation.

The manganese potential was recently highlighted with the discovery of high grade manganese (assays to 47.4% Mn) by Zenith Minerals (ASX: ZNC)  at their Red Lake Prospect, 57 kilometres southwest of the tenement.

Also, Ausquest’s (ASX:AQD) Manganese Dome project is located 90 kilometres southeast of the application.

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Gold One International: not bidding for Blyvoor Mine, clarifies newspaper statement

Gold One International (ASX: GDO) has made a statement to the market responding to an article published in a newspaper.

Gold One stated:

'wishes to clarify that it is not bidding for any stake in DRDGold Limited’s Blyvoor Mine, as was incorrectly reported by the South African Sunday Times Business Times weekly newspaper in an article titled “Rand gold price boosts Blyvoor bids”, published in print and online on 29 October, 2011.

'Gold One has not submitted any proposal to acquire any stake in the Blyvoor Mine whatsoever and has no intention of making any such bid in the foreseeable future.'

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Gold miner Great Basin names Driscoll as VP of Nevada operations

Mineral explorer Great Basin Gold (TSE:GBG) says that it has bolstered its management team with the appointment of Joseph Driscoll as vice president of the company's Nevada operations, it said Monday.

Driscoll, who is a qualified mining engineer, holds a Bachelor of Science degree from the College of Mineral Science and Technology. 

His new duties include: leading a qualified management team focused on operating and developing the company’s Hollister and Esmeralda operations, to enhance partnerships and relations with stakeholders as well as to direct the team’s efforts toward long-term growth.

In 1986, Driscoll started his mining career at Western Energy as a metallurgical technician. He then moved on to work for companies such as Pegasus Gold, New Butte Mining and Independence Mining.

Additionally, he joined Barrick’s Goldstrike Mine as mine operations and maintenance superintendent, in 2006, and re-joined Newmont’s Carlin operation where he has been leeville mine manager until his appointment with Great Basin Gold.

Great Basin’s CEO Ferdi Dippenaar said: "He brings with him a wealth of knowledge and experience which we believe will be instrumental in unlocking the value of our Hollister and Esmeralda projects in Nevada. We are extremely pleased to have Joe join the company and strengthen our operational team in Nevada." 

Great Basin Gold develops and explores precious metal deposits. Its properties include the Hollister gold project, which is located on the Carlin Trend goldfield in Nevada, and the Burnstond gold mine that rests in the Witwatersrand Basin goldfields in South Africa.

Great Western prices its $15-mln financing at 63 cents per share

Great Western Minerals (CVE:GWG) says it has priced its previously announced $15 million brokered private financing with the proceeds going towards the development of its South African project, the company said Monday. 

The company has hired a syndicate of agents led by privately-held investment dealer Byron Capital Markets to sell 23.8 million shares of Great Western for 63 cents each.

In addition, the rare earths processor has granted the syndicate an option to exercise up to 48 hours prior to the deals closing to place an extra 3.5 million shares for additional gross proceeds of $2.25 million.

Moreover, Great Western said it would pay a 5 percent cash commission of the money raised to the syndicate.

The offering should close on Nov. 10, and the securities issued will be subject to a four month hold period. Also, the financing is subject to regulatory and TSX Venture Exchange approvals. 

The Saskatoon-based company plans to use profits from the offering to continue development at its Steenkampskraal project, in South Africa, as well as for general corporate purposes.

Great Western's rare earth specialty alloys are used in the battery, magnet and aerospace industries, and are produced by its two subsidiaries: Less Common Metals in Birkenhead, UK, and Great Western Technologies in Troy, Michigan.

Aside from its Steenkampskraal mine in South Africa, the Saskatoon, Saskatchewan-based company also holds interests in six rare earth exploration properties in North America.

Nextraction Energy and Magnum amend joint venture deal for Viking oil property

Nextraction Energy Corp. (CVE:NE) said Monday that it has amended its joint venture agreement with oil and gas company Magnum Energy (CVE:MEN) relating to their Viking oil property, in eastern Alberta.
The property, situated in the Provost Field, is known for its prolific Viking A formation whereby vertical wells have produced up to 300,000 barrels of oil each.
According to the initial joint venture deal, Nextraction was supposed to cover the costs to drill, complete and tie in two horizontal wells to earn a 50 percent working interest in each well and future development.
Under the amended deal, Nextraction immediately becomes vested in the property, decreasing the earn-in provision of the agreement from two horizontal wells to one well.
In exchange for the reduction in the required number of drilled wells under the joint venture deal, Nextraction has agreed that the $1.19 million remaining loan Magnum owed the company has now been repaid in full as of October 1.
Nextraction said that reducing the earn-in commitment allows the company to drill two wells – at 50 percent working interest – rather than one well for the same capital outlay, thereby increasing the production, reserves and value of the expenditure for Nextraction’s shareholders.
On October 6, Nextraction finished its first horizontal Provost Viking well. For the first five days of testing, the 1,200 metre horizontal leg, which had been fractured in 13-stages, flowed at 177 barrels of oil equivalent per day. Average flow rates were comprised of 109 barrels of oil and 410 million cubic feet per day of natural gas, with a 75 percent watercut, the Canadian junior oil and gas company said.
Under the terms of the new deal, Nextraction will complete and solely pick up the cost for the construction of a pipeline to tie-in this first horizontal well that has been completed.
The permitting of the pipeline is underway, and Nextraction expects construction to be completed late in the fourth quarter. Once the pipeline has been constructed, Nextraction and Magnum will continue to advance the development of the Provost property.
In addition to developing the Provost light oil pool, Nextraction is producing light oil and liquids rich gas at its Pinedale Anticline resource play in Wyoming, and is testing for horizontal shale gas development on its lands in the southern Appalachian Basin of the eastern United States.
The Calgary-based company’s stock traded flat at 31 cents a share, while Magnum Energy’s shares rose 5.88 percent to 18 cents on Monday early afternoon.

IBC Advanced Alloys posts 37% higher 2011 sales, increased gross profit

IBC Advanced Alloys Corp. (CVE:IB) released Monday results from its fiscal 2011 fiscal year ending June 30, announcing an 87 percent increase in gross profit and a 37 percent boost in sales from the prior year.

The vertically integrated rare metals-based alloys and advanced cast product maker said that sales for the year came in at $20.46 million, versus $14.93 million a year earlier.

IBC makes and distributes rare metal alloys that are used in a variety of industries, including nuclear energy, automotive, telecommunications, and a range of industrial application. It has 80 employees, with production facilities in Indiana, Massachusetts, Pennsylvania and Missouri.

"Over the last four years, IBC has developed and implemented an advanced alloys business to support its mine-to-market business strategy," said CFO, Simon Anderson.

"Our fiscal 2011 revenue growth is clear proof that IBC's vertically integrated model is sound and that the business has a strong foundation. We have successfully integrated our operating facilities, introduced a range of new high performance alloys and begun business development efforts into several new markets."

Indeed, gross profit for the year jumped a whopping 87 percent to $3.93 million, from $2.10 million, in fiscal 2010, on increased sales and improved operating practices, the company said.

Losses for 2011 were wider, however, at $4.66 million, or $0.02 per share, up 13 percent from the previous year, reflecting both business expansion and one-time expenses related to plant re-location.

"While the company as a whole is not yet profitable, we were very encouraged by our 2011 financial performance and expected the increased costs in fiscal 2011, which relate to the expansion and upgrading of our manufacturing base to support future revenue growth," added Anderson.

Operationally, IBC made significant progress during the year, including the construction of a new factory in Massachusetts, and the closing of an $8.2 million financing to fund a mineral exploration program at its beryllium properties in Utah, as well as other new business development initiatives.

In May, IBC opened a new 63,000 square foot manufacturing facility in Wilmington, MA to support the growth of the company's Engineered Materials division and its ultra-lightweight cast alloys.

A month later, the company also inked a memorandum of understanding with its Kazakh suppliers, Ulba Metallurgical Plant, to further advance the company's relationship and to continue to target emerging opportunities in the global beryllium and rare metals market.

Earlier in the year, the alloys manufacturer also renewed its collaborative research agreement with Purdue and Texas Engineering Experiment Station, a member institution of the Texas A&M University, with regards to their commitment to develop a beryllium-enhanced nucleur fuel.

Moreover, IBC said last Thursday that it signed a preliminary agreement with Ceramic Tubular Products to jointly develop their respective nuclear fuel technologies. The two technologies, which will be advanced to address operational and performance issues with light water reactor fuel systems, are complementary, the companies said, and have the ability to deliver "significant" fuel performance improvements and safety benefits.

Aside from its alloys manufacturing facilities, and nuclear fuels initiative, Vancouver-based IBC owns prospective beryllium properties that consist of 371 claims, totalling about 7,630 acres, and are adjacent to the large Spor Mountain beryllium mine.

The first phase drill campaign at its Juab County project in western Utah will consist of up to 35 holes, totalling 5,250 metres of reverse circulation drilling to test target zones in the volcanic tuff and in the underlying Bell Hill Dolomite unit, in the claim area south of the Starvation Canyon Wash.

The company ended the year with cash and equivalents of $7.51 million.

Black Iron posts "impressive" PEA for Shymanivske, showing 42.1% IRR, and $3.0bln net present value

Black Iron (TSE:BKI) announced early Monday the results of its preliminary economic assessment (PEA) for its Shymanivske iron ore project in Kryviy Rih, Ukraine, indicating a low cost pellet plant feed operation with a projected high value and net cash flows.
The preliminary report, completed by BBA of Montreal, Quebec, considered two production scenarios over a 28 year mine life, the first being a 7.3 million tonne per year iron ore pellet plant feed, and the second being a production alternative for producing 7.6 million tonnes per year of iron ore pellets.
The first option dictates a projected 42.1 percent internal rate of return (IRR), with a whopping US$3 billion net present value, at an 8 percent discount rate. Total capital costs came in just shy of $900 million, with a payback period of 2.2 years, and an estimated operating cost for the average initial 20 years of $52.40 per tonne.
The iron grade of the final product from the pellet plant feed is to be 67 percent iron, the report said, compared to the benchmark grade of typically 62 percent, said the company on a conference call Monday, with every one percent of grade adding $5 per tonne to the product. Iron ore is the raw material used to make pig iron, which is one of the main raw materials used to make steel, and is therefore one of the most integral commodities to the global economy.
The second scenario for Shymanivske outlines the option to produce a higher margin pellet product of 65 percent iron grade, generating a much higher net present value of US$4.1 billion at the same discounted rate, but with a reduced 35.2 percent internal rate of return, due to raised construction costs, Black Iron said.
This alternative option sees a slightly higher output rate of 7.6 million tonnes per year, and a pellet sales price premium of $35 per tonne, but operating costs over the initial 20 years are projected at $64.15 per tonne, with estimated total capital costs of $1.57 billion and a payback period just under three years.
The company said that it plans to construct the mine and concentrator to produce pellet feed for start-up in late 2015, and use cash generated from operations to potentially construct a separate pellet plant, or rather increase pellet feed production and double existing capacity three to five years after start of initial output.
The final product, Black Iron said, will be dependant on the needs of its future offtake partner, and will therefore be decided once an agreement is signed.
Average annual cash flows for the first 20 years are pegged at $382.8 million for the pellet feed operation, versus  $540.7 million for the pellet production case.
"The operation outlined by this PEA for the Shymanivske Project indicates the potential for a high value, low net cost iron ore development project," said president and CEO, Matt Simpson.
"The projected high NPV, net cash flows, and relatively low unit cost for pellet plant feed arise from Black Iron's advantages, including an iron ore deposit with significant infrastructure (existing railway, power lines and port) and access to skilled labour.
"Our results to date, coupled with this engineering study, make a compelling case for expediting the development of the Shymanivske Project."
Indeed, the company said that the operations outlined in this PEA are projected to generate over US$856 million in average annual revenue over the first 20 years of mine life for the pellet feed scenario, and over US$1.15 billion in the alternative option.
The location of the Shymanivske project is ideal, as it is surrounded by seven other iron ore mines, including ArcelorMittal's iron ore complex, and it is nearby key European and Turkish customers.
Based on metallurgical work completed for the report, the process weight recovery of 29.6 percent would yield a project life of about 28 years with the current estimated NI 43-101 compliant resources, which stand at 345 million measured and indicated tonnes grading 32% iron, and an additional 469 million inferred tonnes grading 31% iron.
Black Iron said it is working to improve both technical and metallurgical aspects of the project, as part of a feasibility study that will begin once the PEA report is finalized. Work to further streamline and simplify operations, as well as reduce mining and concentrator costs for the pellet producing option, is expected to lower capital costs.
The company's COO, George Mover, added: "Through the process we gained considerable insight into potential opportunities for further improvement in the already attractive overall potential economics, including an increase in weight recovery and the simplification of the process flow sheet.
"These opportunities...should further reduce the capital and operating costs. The relatively low unit operating cost of production coupled with close proximity to Turkish and European customers, means this operation has the potential to remain profitable despite any fluctuations in the iron ore price as both demand and supply increase in the future."
Last week, the company received a favourable court ruling allowing it to resume drilling activities at the project.   The Dnepropetrovsk District Administrative Court ruled in favour of the company with respect to a temporary suspension of activity at the site, imposed by the Dnepropetrovsk Region Ecological Inspectorate.
Following the decision, the company has already started its first definition and exploration program, which is aiming to upgrade and increase the size of the resource at the property to 1.0 to 1.8 billion tonnes at a grade of 28% to 32% iron, including the nearby exploration permit located adjacent to Shymanivske, known as the Zelenivske project.
With a successful exploration and definition drill program the company expects to be able to support increased production scenarios, which would further increase the already strong project net present values, Black Iron said.
The iron ore explorer will be drilling at the northern end of Shymanivske, with 20,000 metres expected in the next year. However, Black iron cautioned that further drilling is not necessary for its mid to late 2015 production target, and if markets continue to falter, drilling could be scaled back to conserve cash. Assay results are anticipated to flow out in the next four to six weeks.
CEO Simpson concluded that with an "impressive" 42.1 percent IRR for the pellet plant feed scenario, there are "substantial opportunities" for share price appreciation, given Black Iron's current market cap of over $115 million.
Shares of the iron ore company were up 1.22 percent in early morning trading Monday, to $0.83 as of 9:33am ET.

Tirex Resources appoints president

Tirex Resources (CVE:TXX) said Friday it has appointed Fred Tejada as president of the company.
Tejada has 30 years of international mineral industry experience, working with both major international mining companies and exploration focused organizations.
Prior to joining Tirex, where he was VP of operations and exploration until recently, he was VP of exploration for Panoro Minerals, where he directed the resource definition drilling of its two major copper projects in Peru.
For seven years, Tejada was country manager and president of Philippine subsidiary companies of Phelps Dodge Exploration Corporation.
While with Phelps Dodge, he was responsible for corporate matters and exploration activities from project generation, property acquisitions and permitting. In this role, he led the acquisition of Mountain Mines in Batong Buhay and Taysan copper deposits.
"Tirex recently announced and described an arrangement through which the company intends to target a fast track into copper and gold production via a mining partnership in Albania," said CEO, Bryan Slusarchuk.
"This comes after the company has spent more than four years and more than $25 million on the Mirdita VMS Project. On October 18th, we announced that our mining plans have received official community support from all of the host communities where the mining permit applications are located.
"Mr. Tejada's leadership in Albania and corporately in Canada, based on his 30 years of international mineral industry experience, will serve the company well during this process. His operational leadership in Albania will allow me to remain devoted to raising the profile of the company through my role as CEO, internationally as we advance corporately."
Tirex is an exploration-stage company exploring and developing natural resource properties in Albania. It is explores for various metals like copper, zinc, gold and silver.

Rare Element Resources reports encouraging 2011 drill results from Bear Lodge

Rare Element Resources (TSE:RES) (AMEX: REE) announced late Thursday rare earth element (REE) assay results from 21 drill holes completed during its ongoing 2011 core drilling program at the company's Bear Lodge property, located in northeastern Wyoming, intersecting many high grade REE zones.
Holes from the Whitetail Ridge target were all step-offs from the resource, and the holes at East Taylor confirmed and expanded the encouraging initial reverse circulation drill results reported in August, the company said.
Highlights from the Whitetail Ridge area included 31.8 feet at 3.94% total rare earth oxide (TREO), including 27 feet at 4.68% TREO in hole RES11-10; 113 feet at 2.52% TREO in hole RES-11-12; 48.25 feet at 2.9% TREO in hole RES11-14; and 108 feet at 3.81% TREO in hole RES11-25.
At East Taylor, hole RES11-26 returned 41.5 feet at 4.15% TREO.
Meanwhile, the company also drilled at the Bull Hill resource area, where notable intersections returned 58 feet at 4.88% TREO in hole RES11-27; 40 feet at 3.21% TREO in hole RES11-21 and 115 feet at 3.38% TREO; and 64 feet at 5.48% TREO in hole RES11-22.
"We continue to receive encouraging results from the Bull Hill resource area, and we are extending that mineralization west of the Bull Hill drainage," said VP of exploration, Dr. Jim Clark.
"Our results at the Whitetail Ridge Resource Area confirm the company's initial impression regarding the potential size and tenor of the REE mineralization there, and the East Taylor target is an exciting find, with the original RC drill assay values now confirmed with core drilling,"
"We are investigating the significance of the overlapping REE and gold mineralization at both East Taylor and Whitetail Ridge."
In June, the company published an updated NI 43-101 compliant resource report for the Bull Hill and Whitetail Ridge areas. According to the updated report, a total of 4.9 million tons were estimated in the indicated category at a grade of 3.77% rare earth oxides (REO), increasing the total pounds of REO contained in the Bull Hill high grade deposits by 20%, from 1,210 pounds to 1,450 pounds, at a 1.5% REO cut-off grade.
In addition, 17.8 million tons of inferred resources were established, at a grade of 3.03% REO.
The rare earth explorer's latest estimate, conducted by Ore Reserves Engineering, was based on data from 86 core drill holes completed by the company between 2008 and 2010, for a total of 19,093 metres. These new holes were substituted for those drilled before 2008, as well as for those completed prior to 2004 by other companies, Rare Element said.
The aim of the current drilling program is to continue to expand and upgrade the Bull Hill and Whitetail oxide resources, and to explore for additional REE resources at the East Taylor target, which is located approximately 760 metres west of the main Bull Hill rare-earth deposit.
Rare-earth elements are key components of green energy technologies, used in everything from hybrid automobiles, to advanced wind turbines and computer hard drives. China currently produces more than 96 percent of the 130,000 tonnes of rare-earths consumed worldwide each year, but has recently begun reducing its export quotas, making the metals more and more critical.

Sunday, 30 October 2011

African Energy Resources extends potential investor reach to Botswana with BSE listing

African Energy Resources (ASX: AFR) joins a growing list of international resource companies as it prepares to list on the Botswana Stock Exchange (BSE) following approval for the dual-listing.

The company will join the likes of Discovery Metals (ASX: DML), A‐Cap Resources (ASX: ACB) and CIC Energy (TSX: ELC) when it begins trading on the BSE later today.

The move will place increased investor focus on its wholly owned Sese Coal Project, where the company continues to make rapid progress towards developing the 2.7 billion tonne project.

Importantly, Botswana is an emerging global coal province widely perceived as an excellent investment destination by mining companies.

The dual-listing provides African Energy with access to an additional shareholder base within Botswana that includes a number of significant institutional investors and pension funds.

A formal ceremony will be held in Gaborone today to mark the admission of the company to the BSE.

The Sese Coal Project
The Sese Coal Project is supported by good infrastructure 25 kilometres to the east, including road, rail and a 220 kilovolt power line.

India is considered the likely market for Sese thermal coal, with demand set to increase from 50 million tonnes per annum in 2010 to 210 million tonnes per annum by 2025.

China is also experiencing a surge in demand for the resource with thermal coal imports expected to double to 213 million tonnes by 2025.

In September, African Energy Resources received results from a Concept Study that confirm the technical and commercial viability of the project.

Robust cash flows and strong operating margins are possible under a variety of scenarios that do not require new rail and port infrastructure.

The study concluded that the project could be developed through a staged approach. An initial, up to 1 million tonnes per annum operation (Stage 1) can generate cash flows from 2013 and involves selling washed coal into domestic and regional markets.

Additional coal sales to a power station, and moderate volumes of export sales could expand Sese into a 3‐5 million tonnes per annum (Stage 2) operation.
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Baraka Energy & Resources and JV partner PetroFrontier spud oil shale play in Georgina Basin

Baraka Energy & Resources (ASX: BKP, RBD: GR) has reported that joint venture partner Petrofrontier Corp (TSX-V: PFC) has spudded the MacIntyre-2 well in the Northern Territory.

PetroFrontier is believed to be the first company to introduce open hole horizontal and multi-stage fracing technologies to unlock unconventional oil potential in Australia.

The drilling of EP127 well has been highly anticipated by investors as well as Baraka, as the company has a 25% undivided working interest.

The objective is to drill the well to 500 metres horizontally into the shale and “hot shale” Basel Arthur Creek Shale, which commences at a depth of approximately 770 metres vertical depth.

Petrofrontier then intends to frac and complete the well using multi-stage open hole techniques.

Baraka also retains an undivided 75% working interest in about 75 square kilometres around the Elkedra-7 well on EP127, where previous drilling has indicated oil shows that could lead to a discovery.

Petrofrontier has also recently completed a well at Baldwin-2 in the Georgina Basin on EP103 only 60 kilometres away.

When final results are released from MacIntyre-2, the completions crew will subsequently return to Baldwin-2 to conduct a similar program there.

It has always been PetroFrontier's strategy to frac MacIntyre-2 and Baldwin-2 back to back in order maximize cost controls.

PetroFrontier intends to use Schlumberger, the Australian representatives of Packers Plus, to run the multistage open hole completion string and conduct the fracture stimulation program.

These technologies have been widely successful in unlocking North American unconventional oil reservoirs such as the Bakken formation, and Baraka and PetroFrontier expect them to assist in establishing commercial production.

Ryder Scott Report on Potential Oil Resource Estimates

Consultants Ryder Scott Company Petroleum have written a report entitled Evaluation of the Hydrocarbon Resource Potential Pertaining to Certain Acreage Interests in the Southern Georgina Basin.

Ryder Scott Petroleum Consultants evaluated Baraka’s concessions in the Georgina Basin and estimated the lands to hold a prospective resource potential of 76.65 billion barrels of oil (unrisked, P50 estimate).

Ryder Scott estimated The Arthur Creek “Hot Shale” potential resource at 7.53 billion barrels and is the primary focus for PetroFrontier and Baraka.

Frankfurt Exchange

Meanwhile, Baraka has also announced that its application to list on the Frankfurt Exchange (FSE) has been approved and is now trading under the code (RBD: GR).

Baraka said that having initially assessed the benefits that could flow to the company and shareholders from a greater exposure to large cash rich Fund Managers and Institutions in Europe, the company carried out serious dialogue and costing to analyse the cost-reward benefits of the listing.

The company believes that it would appeal to the European investors because of the strength of the Australian currency, and the potential success of Baraka’s oil shale project in the Northern Territory, as well as its cash reserves, nil liabilities, strong management and possible acquisition/joint venture of other assets.

Baraka intends to commence a marketing and promotional program throughout Europe to educate the European investors on Baraka’s financial position and project potential, possibly with a follow up road show to selected interested Institutions either this year or in the New Year.

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Phoenix Gold boosts Eastern Goldfields footprint, eyes more acquisitions along Zuleika shear

Phoenix Gold (ASX: PXG) has reached an agreement to acquire 100% of the Red Dam Gold Project in Western Australia’s Eastern Goldfields from Carbine Resources (ASX: CRB).

Red Dam covers more than 270 hectares in the heart of the Eastern Goldfields, adjacent to Phoenix’s Broads Dam Gold Project on the Zuleika Shear, a major northwest trending lineament and host to numerous multi-million ounce gold deposits.

Carbine Resources has stated that Red Dam contains more than 147,000 ounces of gold at 2.5 grams per tonne (g/t) gold, with the most recent drill program, for infill and extension work, completed in 2007.

The project is highly prospective due to previous intersections such as 5 metres at 44.07g/t gold from 32 metres, 14 metres at 8.27g/t gold from 97 metres and 18 metres at 4.88g/t gold from 76 metres.

The project area is open along strike and at depth.

Phoenix plans to begin a 5,000 metre extensional drilling program at Red Dam in the March quarter of 2012.

Phoenix managing director Jon Price told Proactive Investors today that many existing high grade hits including the 5 metres at 44.07g/t gold are outside of the current 147,000 ounce resource, and this acquisition could be just the beginning for the company.

"We will certainly be looking for new acquisitions in the future along the major shear zone of Zuleika."

The Red Dam acquisition comprises consideration of a $50,000 non-refundable cash deposit on signing the formal agreement, a $50,000 cash payment at settlement, 8 million Phoenix Gold shares (at a deemed price of $0.23) and a gross production royalty of $10 per ounce.

Phoenix and Carbine expect to execute and complete a Formal Sale Agreement by December 2011, subject to any approvals required.

Broads Dam extension
Red Dam is one of a number of strategic acquisitions made by Phoenix in recent times to extend the Broads Dam project.

This strategy is looking to be a success, with the company intersecting more gold at the project in early October.

Highlights from the reverse circulation drilling included 13 metres at 4.85g/t gold from 16 metres, 2 metres at 13.74g/t gold from 105 metres and 2 metres at 9.04g/t gold from 108 metres.

Early cash flow

Phoenix recently secured an agreement with FMR Investments to treat a parcel of ore through FMR’s 1 million tonne per annum Greenfields processing facility near Coolgardie in Western Australia.

This agreement allows Phoenix to realise early cash flow from the surface stockpiles, possibly as early as the December quarter 2011, with minimum haulage required.

Phoenix has around 19,000 ounces in stock piles at various grades which it is looking to begin processing in the December quarter.

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Minbos Resources to raise up to A$4.9m to progress African potash projects

Minbos Resources (ASX: MNB) is currently in a very interesting position due to holding some high grade potash projects in Angola and the Democratic Republic of Congo - covering a significant 400,000 hectares.

To progress these projects, Minbos has placed 9.6 million shares at $0.28 to raise A$2.7 million with clients of Patersons Securities and Macquarie Equities.

A one for ten rights issue has also been launched at the same price as the placement, which has the potential to raise another A$2.18 million.

Minbos has already highlighted funds will be used for a desktop study at the Kanzi deposit in the Democratic Republic of Congo - which just last week delivered a high grade maiden phosphate JORC Resource of 46 million tonnes at 17.2% phosphate, including a high grade zone of 31 million tonnes at 21.4% phosphate.

Money will also be allocated for a scoping status for the Cacata deposit (which already has an Indicated JORC Resource of 22.5 million tonnes at 21.4% phosphate) and, if warranted, commencement of a Bankable Feasibility Study.

The capital injection will also provide a boost to general further exploration drilling and analysis at the company's projects.

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Stellar Resources granted trading halt to finalise acquisition of 40% stake in Heemskirk Tin Project

Stellar Resources (ASX: SRZ) is in pre-open as it finalises a Sale and Purchase Agreement to acquire Gippsland’s (ASX: GIP) 40% carried interest in the Heemskirk Tin Project in Tasmania.

Stellar is confident it will be able to make a joint announcement with Gippsland regarding the acquisition by the commencement of trading on Wednesday, November 2.

The Heemskirk Tin Project, located near Zeehan on Tasmania’s West Coast, is estimated to have a JORC compliant resource of 4.4 million tonnes grading 1.1% tin, or 48,000 tonnes of contained tin.

A scoping study showed potential for economic development with a 3.5 year payback on $108 million pre-production capital and a competitive cash operating cost of US$12,780 per tonne of tin.

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Circadian Technologies moves into clinical development phase on approval of IND for cancer drug

Circadian Technologies (ASX: CIR) will soon begin clinical trials of its VGX-100 antibody to treat cancer after its wholly owned subsidiary, Vegenics, received U.S. Food and Drug Administration (FDA) approval for its Investigational New Drug application to initiate clinical trials of VGX-100.

Chief executive Robert Klupacs said the FDA's acceptance of the company’s Investigational New Drug application represents an extremely important milestone for Circadian.

“We are well advanced in finalising clinical trial sites in the USA and expect clinical trials to commence before the end of 2011 with results becoming available from the study in the second half of 2012,” he said.

The first trial, or Phase I, will involve the treatment of a variety of different cancer types in patients with late stage cancer.

Circadian is focused on developing VGX-100, a human antibody against VEGF-C, as a treatment for solid tumours – including glioblastoma and colorectal cancer – as the first target indications for VGX-100.

VGX-100 works by blocking the growth of lymphatics.  Circadian has already invested considerably in the VGX-100 molecule in terms of manufacturing, toxicology studies and other pre-clinical activities.

Circadian is also developing VGX-100 for a number of other cancer indications, as well as an agent to treat front-of the-eye diseases.

Studies to date

Preclincial animal model studies across a wide range of tumour types have shown that when combined with Avastin® and chemotherapy, VGX-100 can significantly reduce tumour growth and tumour spread.

As well, studies have shown that VGX-100 can significantly improve tumour inhibition, over and above that of Avastin® and/or chemotherapy alone.

Recent studies have also implicated VEGF-C as a key mediator of disease progression during Avastin® treatment, implying that combination therapy with VGX-100 and Avastin® could significantly improve treatment outcomes in cancer patients.

Circadian’s wholly owned subsidiary, Vegenics Pty Ltd, owns worldwide rights to an extensive intellectual property portfolio covering the angiogenesis and lymphangiogenesis targets VEGF-C, VEGF-D and the receptor protein VEGFR-3.

Vegenics has also been granted exclusive worldwide rights to intellectual property filed by Schepens Eye Research Institute, covering the use of anti-lymphangiogenc molecules for the treatment of Dry Eye Disease.

Late last month Circadian filed its Investigational New Drug application, which is a request for authorisation from the FDA to administer an investigational drug to humans.

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Gold One International substantial shareholder increases stake

Gold One International (ASX: GDO, JSE: GDO) significant shareholder Water Island LLC has increased its interest in the company.

Water Island acquired 13.17 million shares during October to move to 61.92 million shares equal to a 7.65% stake.  Consideration was an average price of $0.53 per share.

Gold One International (ASX: GDO) is currently under an offer from a Chinese consortium which includes a cash offer of A$0.55 per Gold One share and a minimum A$150 million capital injection into Gold One - which would secure a 60% to 75% stake. The consortium currently holds around a 19% stake.

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Black Fire Minerals eyes maiden tungsten JORC Resource at Pilot Mountain

Black Fire Minerals (ASX: BFE) is preparing to drill the Pilot Mountain Tungsten-Copper Project located in Nevada, U.S., after recently taking up an option to wholly own the project.

A diamond drilling contractor has now been secured to commence the first program of resource definition drilling at the Desert Scheelite Prospect commencing in December 2011. A JORC Resource is targeted by mid-2012.

Highlighting the potential at the prospect, over 150 drill holes were previously completed by Union Carbide. Best results include:

- 12.6 metres at 0.59% tungsten, 0.32 ounces per tonne (oz/t) silver and 0.48% copper;
- 16.6 metres at 0.40% tungsten, 1.63oz/t silver and 0.42% copper; and
- 13.3 metres at 0.37% tungsten, 2.87oz/t silver and 0.10% copper.

These deposits were never exploited due to a significant collapse in tungsten prices in the mid 1980’s and no significant modern exploration has been undertaken on the project since then.

Consequently, the project represents an advanced opportunity for Black Fire to capitalise on the increasing demand for tungsten which has seen significant price growth both before and since the global financial crisis.

In addition, the project has the potential for significant copper and silver credits.

Union Carbide’s historic reporting of their activities at the Desert Scheelite, Gunmetal and Garnet deposits is not compliant with the JORC code and therefore cannot be reported by the company.

However, Black Fire’s initial exploration target for these 3 deposits is 7-9 million tonnes at 0.30% to 0.37% tungsten. This target tungsten grade, which is based on extensive historic drilling, is considered very competitive with many current global tungsten mines and resource projects.

The drilling program

The planned program will comprise up to 4,000 metres over 18 holes to twin and infill selected holes out of the plus 100 historic holes that were drilled predominantly on 33 metre by 33 metre centres.

The aim of this program is to provide confirmatory assay and geological information so that the extensive historic database may be brought into a maiden JORC Resource.

Should this program be successful, a considerable saving will be possible in terms of both drilling costs and time and should allow a maiden resource for Desert Scheelite to be delivered by the end of the June 2012.

Desert Scheelite - one of three advanced prospects

Providing a further boost to the potential of the Pilot Mountain Project, the Desert Scheelite Prospect is only one of three advanced prospects at the project.

The project has been historically extensively drilled and subjected to mining Feasibility Studies by Union Carbide Corporation during the early 1980’s.

In addition, Desert Scheelite was also trial mined with the successful extraction of a 70,000 tonne bulk sample.

Union Carbide “mothballed” the project in the mid 1980’s in response to a significant fall in tungsten prices at that time. There has been no significant exploration undertaken since that time.

Location and tenure

The Pilot Mountain Project comprises 154 unpatented Mineral Claims for 12.9 square kilometres, located on the eastern flank of Pilot Mountain, 250 kilometres southeast of the city of Reno and 20 kilometres east of the town of Mina.

This ground package is the result of a consolidation program undertaken by Black Fire who staked 109 claims to secure additional nearby prospects prior to acquiring the rights to PGC’s 45 claims over the historic deposits.

The project is located on open rangelands with excellent infrastructure including grid power and intrastate highway less than 20 kilometres to the west.
Nevada is the “mining capital” of the U.S. with a favourable regulatory environment and availability of equipment and a skilled workforce.

Geology and mineralisation

The Pilot Mountain project area is located within a thick package of bedded marine sediments of the Jurassic Luning Formation, which importantly comprises units of limestone and calcareous sediments which are the host to the tungsten-copper mineralisation.

Intruding these sedimentary rocks are a series of Cretaceous age quartz monzonites and granodiorites which have developed the skarn style mineralisation within the limestone beds.

Mineralisation is therefore effectively stratigraphically controlled where the favourable beds are in contact or close proximity to the causative intrusives. The principal tungsten mineral present is scheelite (CaWO4).

To date, mineralisation has been traced up to 200 metres away from the intrusive rocks and up to 600 metres along strike with widths ranging from 2 metres to 10 metres.

Three advanced prospect areas are known including Desert Scheelite, Gunmetal and Garnet and it is these prospects that were extensively drilled by Union Carbide between 1977 and 1983. A further 11 prospects at various stages of exploration fall within the project area.

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Friday, 28 October 2011

Xmet hits near-surface high grade gold at Shaft zone, Duquesne Ottoman

Xmet (CVE:XME) announced Friday positive drill results from the first seven holes as part of the ongoing phase two program at the Duquesne-Ottoman project in Quebec.
Phase two drilling began in early September, with two rigs targeting the expansion of Xmet's current inferred resource at the project of 727,000 ounces of gold, or 853,000 ounces uncut.
The company said drill intersections show good continuity of high grade gold mineralization identified previously by surface trenching during this past summer's exploration program.
Highlights of the results from the Shaft Zone reported today include drill-hole DO-11-38, which intersected 11.66 grams per tonne (g/t) of gold (8.77 g/t Au cut) over 5.10 metres, while hole DO-11-41 returned 7.84 g/t gold over 2.75 metres.  True widths are considered to be 80 percent of reported core lengths, Xmet said.
Senior VP of exploration for the company, Bill Yeomans, said: "These latest results demonstrate excellent continuity of mineralization down dip from high grade gold mineralization exposed on surface during the 2011 trenching program.
"Current drilling is targeting potential extensions of shallow mineralization below and to the southwest of exposed Shaft Zone mineralization, which trends at N070 degrees and dips 75 degrees southeast."
A second drill rig is also testing potential extensions of mineralization on the Fox zone, considered to be another high priority target, the company added.
Xmet has completed 2,900 metres of the 7,000 metre phase two drilling program, with additional results to be reported as they become available. Mineralization on the Shaft Zone has been exposed for over 150 metres along strike and the system is open in both directions.
Xmet, through its subsidiary Duquesne-Ottoman Mines, carries out gold resource exploration and development. Under the terms of a mining option agreement between Duquesne-Ottoman Mines and Duparquet Assets, Duquesne-Ottoman Mines can earn an option to purchase 75% of Duparquet Assets, which owns the Duquesne-Ottoman project.
The property consists of 20 claims (commonly referred to as Duquesne West) and 40 claims (commonly referred to as Ottoman) covering an area of 928.6 hectares, located within the townships of Duparquet and Destor in Quebec.

Great Western Minerals announces min $15 mln private placement financing

Great Western Minerals (TSE:GWG) (OTC:GWMGF) said late Thursday that it plans to launch a brokered private placement financing for a minimum of $15 million in common shares.
The company has hired a syndicate of agents for the offering, co-led by Byron Capital Markets and Cormark Securities.
The pricing of the offered shares will be determined by the company and agents in the context of the market, Great Western said.
Proceeds will be used for the continued development of the company's Steenkampskraal rare earth project in South Africa, as well as for general corporate purposes.
President and CEO, Jim Engdahl, said: "This financing will move GWMG one more important step toward its goal of being a fully integrated rare earth producer. We have carefully considered the various financing options available and feel an equity financing will provide the company with the greatest flexibility in the short term.
"Ensuring we have adequate capital on hand puts our company in a much stronger position as we continue to evaluate non-dilutive financing mechanisms such as joint ventures/off-take agreements and debt instruments."
The company also said it has deferred its planned special meeting of shareholders originally scheduled for November 22. Great Western said it had been contemplating a re-confirmation of shareholder approval for undertaking a share consolidation, initially approved by shareholders in August, but because of the current state of global financial markets, the company has decided that such a plan would not be in the best interests of stakeholders.
Engdahl commented: "Our company evaluated this strategic decision very carefully. A share consolidation can be a catalyst that enables GMWG to fully access a broader capital markets strategy, and on that basis, could be of benefit to shareholders. The current financial market conditions, however, intervened and the company's assessment was that shareholders' interests would not be served by proceeding at this point."
In September, Great Western said an NI 43-101 compliant report from Steenkampskraal is due in the first half of next year, with the facility to begin full operations on both the mining and processing side by the first quarter of 2013. Anticipated total capital costs for the Steenkampskraal facility amount to $60 million.
Demand for rare earths is boooming, as despite being used in relatively small amounts, the metals are necessary to the growing production of energy-efficient green products, mobile electronics and electric vehicles.
Deposits of the metals are not actually rare, but high capital costs, difficult metallurgy, marginal ‘heavy’ rare earths grades, and a lack of people with significant rare earths processing experience are major hurdles to bringing new mines to production, bringing Great Western's advanced Steenkampskraal mine to investors' attenion.

Gold Resource Corp declares October monthly dividend

Gold Resource Corp (AMEX:GORO) declared Thursday its instituted monthly dividend of five cents per common share for October, payable on November 23 to shareholders of record as of November 11.

The company, which began commercial production in July 2010 from its El Agula operations, is a low-cost gold producer with operations in southern Mexico.

The dividend today represents the sixteenth dividend in as many months of commercial production and the tenth of 2011, and increases the total dividends declared since commencing commercial production to 58 cents per share to date. This means the company has returned over $30 million to its shareholders.

Gold Resource Corp has 100% interest in six potential high-grade gold and silver properties in Mexico’s southern state of Oaxaca.

Fission Energy to launch $10 mln bought deal financing

Fission Energy Corp. (CVE:FIS), a junior mineral explorer, reported Thursday that it has agreed to a $10 million bought deal private placement financing, from which proceeds will be used to fund exploration on its Canadian properties.
The miner said a syndicate of underwriters led by Dundee Securities has agreed to buy 11.8 million flow-through shares at a price of $0.85 each.
In connection to the offering, Fission will pay a cash commission fee equal to six percent of the gross proceeds raised and that number of non-transferable broker warrants equal to 6.0% of the number of flow-through shares sold.
Each broker warrant will be exercisable into one common share of Fission for a period of 24 months from the closing date for 85 cents per share.
The offering is slated to close on November 17, and the securities issued are subject to a four month hold period.
The gross proceeds will be used to fund exploration of the company’s Canadian-based projects, it said.
Fission Energy’s exploration focus is Saskatchewan’s Athabasca Basin, with its Waterbury Lake joint venture property located next to takeover target Hathor Exploration's Roughrider deposit. The majority of the company’s properties were acquired by staking in 2003 and 2004.

St Andrew Goldfields bolsters board of directors with new member

St Andrew Goldfields (TSE:SAS) said Thursday it has appointed Catherine A. Gignac to its board of directors.
Gignac most recently held the position of managing director and analyst with NCP Northland Securities. She has covered the mining and minerals sector, including large to small cap, precious and base metal mining companies for over 25 years.
Gignac has previously held positions with several Canadian brokerage firms including UBS Securities, RBC Capital Markets, Merrill Lynch Canada and Wellington West Capital Markets.
Prior to this, she was an exploration geologist with Barrick Gold Corporation (TSE:ABX). Gignac is also a member of the Mineral Resources Analyst Group, the CFA Institute, the Canadian Institute of Mining and Metallurgy and the Prospectors and Developers Association of Canada.
"We are delighted to have Catherine as a member of our Board of Directors", said St Andrew chairman, Louis Gignac.
"She is highly respected and held in high regard within the mining industry. Her expertise in valuation analysis, her knowledge of the capital markets as well as her background in geology will be a great addition to the board."
St Andrew is a gold mining and exploration company with a land package in the Timmins mining district, northeastern Ontario which lies within the Abitibi greenstone belt. The company is focused on developing its assets in the Timmins Camp with three producing mines and exploration activities across 120 kilometres of land straddling the Porcupine-Destor Fault Zone.

PMI Gold confirms high-grade intersections at Obotan Project

PMI Gold (CVE:PMV, ASX:PVM) Wednesday confirmed the internal continuity of its flagship Obotan project in Ghana, with the occurrence of a higher grade core with further wide and high grade intersections from Nkran.

Obotan, located in south-west Ghana, comprises four known deposits: the larger Nkran deposit, and the smaller satellite deposits at Abore, Adubiaso and Asuadai.

Highlights of assays from an additional 35 diamond drill holes for 7,614 metres showed 3.47 grams per tonne gold (g/t) over 30 metres and 51.17 g/t gold over 8 metres.

The latest data will be incorporated in a resource re-estimate, planned for early 2012.

The upper portion of the Nkran, Abore and Adubiaso deposits were previously mined by Resolute before closing in 2002, after producing a total of 730,000 ounces at an average grade of 2.2 g/t gold, during a period of low gold prices of less than $350 per ounce. Approximately 590,000 ounces of Resolute's total production was from the Nkran pit.

Since acquiring the Obotan project, PMI Gold has completed 225 resource extension, confirmation and in-fill diamond drill holes for 59,084 metres of drilling, with emphasis on the larger Nkran deposit.

Three diamond core rigs are currently active at Obotan on continued resource definition drilling.

PMI Gold said that a pre-feasibility study for Obotan remains on target for completion in December 2011 to be immediately followed by a bankable feasibility study scheduled for completion mid-2012.

These studies have been significantly de-risked by Resolute's successful mining history, which was carried out during a period of substantially lower gold prices and reported few mining and processing issues. The company also had a good correlation between the resource model and grade control drilling, PMI said.

In mid-October, PMI Gold unveiled an NI 43-101/JORC compliant estimate, completed by SRK Consulting, comprising measured resources of 14.67 million tonnes at 2.66 grams per tonne (g/t) of gold for 1.22 million contained ounces; indicated resources of 27.5 million tonnes at 2.32 g/t for 2.00 million gold ounces; plus an additional 17.54 million tonnes of inferred resources grading 2.35 g/t gold, for 1.29 million contained ounces.

Over three quarters of these resources  - 2.5 million ounces measured and indicated grading 2.54 g/t gold and 1.02 million ounces inferred grading 2.54 g/t gold - fall within the Nkran deposit.

Gowest Gold signs exploration pact with Mattagami and Matachewan First Nations

Junior bullion company Gowest Gold (CVE:GWA) said on Thursday that it has struck an exploration pact with the Mattagami and Matachewan First Nations to promote an ongoing co-operative discussion between the parties tied to its Frankfield East deposit, in Ontario, and other targets as part of its North Timmins gold project.
The Frankfield East gold project, comprised of 42 claims on 2,444 hectares, currently is estimated to contain 348,000 ounces of gold in the indicated category and 839,900 ounces of gold in the inferred category. The deposit is situated 42 kilometres north east of Timmins in the southwest part of Tully Township.
The exploration agreement establishes the framework for discussions by setting out provisions, which include business, employment and training opportunities activities for members of the two First Nations groups to participate in the exploration around the project.
In addition, Mattagami and Matachewan First Nations, along with Gowest, have agreed to negotiate an impact benefits agreement should the project continue as planned.
Gowest’s chief executive, Greg Romain, said: "The signing of this agreement is a further demonstration of the positive working relationship established with both Mattagami First Nation and Matachewan First Nation, two key stakeholders in our North Timmins gold project."
In a statement, Jason Batise from the Wabun Tribal Council, added: "The signed exploration agreement between the parties shows a respect by this mining interest with regard to First Nations traditional territory and the community understanding as to the needs of the company to develop its property."
Gowest, formerly Gowest Amalgamated Resources, is a gold explorer looking for additional gold targets in its Frankfield land package.

inShare Pdf Kimber Resources intercepts 4.5 metres of 26.6 g/t gold below Carmen resource

Kimber Resources (AMEX:KBX) (TSE:KBR) announced Thursday results from a further ten holes at its Monterde project in Mexico, intersecting high grade gold and silver over notable widths below the current deposit resource.
Nine of the holes were drilled at the Carmen deposit, with the aim of expanding and upgrading the mineral resources amenable to underground extraction, while one hole was drilled into Veta Minitas, to boost existing high grade resources.
Drill hole MTRD-513 returned 26.6 grams per tonne (g/t) gold and 12.1 g/t silver as well as anomalous base metals over 4.5 metres, demonstrating the continuity of high grade mineralization over a strike length of 125 metres, the company said.
"The intercept of 4.5 metres grading 26.6 g/t gold and 12.1 g/t silver in hole MTRD-513 provides yet another excellent high grade gold-silver intersection in the Carmen structure, at a considerably deeper level than existing mineral resources, bolstering the potential for the definition of a deeper, high grade mineral resource under the currently defined Carmen deposit," said president and CEO Gordon Cummings.
"In addition, the Carmen, Cob and Hilos structures were intercepted at depth at the south end of the Carmen deposit in several holes, indicating potential for additional high grade gold-silver mineralization along strike to the south at deeper levels than previously drilled."
Indeed, hole MTRD-515 returned 2.5 metres grading 2.7 g/t gold and 8.8 g/t silver in the projection of the Carmen structure, and an interval from the hanging wall of the Hilos structure returned 1.5 metres grading 6.1 g/t gold and 127.0 g/t silver.
Drill hole MTC-126 also returned 2.9 metres of 2.6 g/t gold from the Cob structure. Kimber started a drilling program focused on the Cob structure in September, with the aim of exploring the depth and strike potential of the mineralization, as well as upgrading existing resources.
The company said a total of 12 drill holes are planned to test for extensions of the Cob structure, the first batch of which saw notable intersections, including 1.0 metre of 4.3 g/t gold and 5.7 g/t silver in hole MTC-134; and 3.9 metres of 1.8 g/t gold and 41.2 g/t silver in hole MTRD-506.
Meanwhile, drill hole MTRD- 521 was designed to test the strike extent of Cob to the north. The only significant value was 2.7 metres of 1.6 g/t gold and 22.7 g/t silver from a structure between Cob and Hilos, Kimber said.
At Veta Minitas, the first completed hole, LMRD-63, returned 5.5 metres of 1.0 g/t gold and 89.1 g/t silver. Diamond drilling at Veta Minitas will progress over the remainder of this year, with potential for expansion into 2012.
Kimber owns mineral concessions covering in excess of 39,000 hectares in the prospective Sierra Madre gold-silver belt, including the Monterde property, where three gold-silver mineral resources have already been defined. The most advanced of these, the Carmen deposit, has been extensively drilled and has undergone detailed geologic modeling.
Since the last mineral resource estimate, Kimber has drilled over 32,000 metres at Carmen.  Because of the high grade discoveries below the current resource, the company said the inclusion of the new results could lead to changes in open pit configuration and require more underground mine planning to optimize project economics.
At the Monterde property, a preliminary economic assessment (PEA), which was updated in June 2011, estimated measured mineral resources of 2.54 million tonnes grading 0.88 g/t gold and 102.4 g/t silver for 71,700 ounces of gold and 8.37 million ounces of silver, at a 0.3% cut-off grade.
The PEA also estimated a 15.5-year mine life, in an open pit-underground production scenario. Total life-of-mine capital costs were projected at US$119.3 million, with total anticipated production of 744,000 ounces of gold and 20.2 million ounces of silver over the mine life.

IBC signs agreement with Ceramic Tubular to develop nuclear fuels technologies

IBC Advanced Alloys Corp. (CVE:IB) (OTCQX: IAALF) said Thursday it has signed a memorandum of understanding agreement with Ceramic Tubular Products to jointly develop their respective nuclear fuel technologies.

The two technologies, which will be advanced to address operational and performance issues with light water reactor fuel systems, are complementary, the companies said, and have the ability to deliver "significant" fuel performance improvements and safety benefits.

Ceramic Tubular has been developing an advanced nuclear fuel ceramic cladding, known as silicon carbide triplex cladding, primarily for existing Light Water Reactors (LWRs), which aims to improve the economics of the nuclear industry by increasing safety margins and overall fuel performance.

The company has been awarded multiple grants, including one from the US Department of Energy, to further research, identify and evaluate complementary fuel forms, such as IBC's beryllium-enhanced fuel that could contribute by facilitating the cladding to achieve full potential in commercial service, IBC said.

"We look forward to working with IBC and their advanced nuclear fuel R&D program," said CEO of Ceramic Tubular, Herb Feinroth.

"Our respective technologies not only complement each other from a technological and commercial perspective, but are also very timely, given recent developments in the nuclear industry after the accident of the Fukushima LWR reactors in Japan."

Under the terms of the agreement, IBC and Cermaic will collaborate to develop, test and potentially commercialize their combined respective technologies.

IBC, with Purdue and Texas A&M universities, will assist in analyzing how IBC's beryllium oxide-enhanced responds and performs in LWRs. IBC's beryllium-enhanced fuel is being developed as a high thermal conductivity nuclear fuel that is more efficient and safer, for use in both current and future nuclear power reactors.

IBC's president and CEO, Anthony Dutton, said: "IBC is excited to develop and collaborate with CTP on alternative nuclear fuel technologies that directly address economic performance and industry safety.

"IBC's objective is to commercialize its BeO enhanced fuel and to position itself as an essential part of the nuclear industry's supply chain. Our work with CTP will provide both parties with an opportunity to contribute to improved margins and cost efficiencies for the nuclear industry."

Aside from its prospective beryllium properties, Vancouver, BC-based IBC makes and distributes rare metal alloys that are used in a variety of industries, including nuclear energy, automotive, telecommunications, and a range of industrial application. It has 80 employees, with production facilities in Indiana, Massachusetts, Pennsylvania and Missouri.
IBC announced in February that it had completed the first phase of its research and development project on nuclear fuels - with positive results.

Edgewater Exploration completes 100% purchase of Corcoesto, PEA near finished

Edgewater Exploration (CVE:EDW) said Thursday it has completed the 100 percent acquisition of the Corcoesto gold project in Galicia, Spain from a subsidiary of Lundin Mining (TSE:LUN), by making a final cash payment of US$3.0 million.
To acquire a 100% interest in the Corcoesto project, Edgewater paid a total of US$8.0 million over a 12 month period. Lundin Mining will retain a 1.5% net smelter return (NSR) royalty once commercial production from the Corcoesto project begins, subject to Edgewater having the right to purchase 1.0 percent of the NSR royalty at any time for US$1.5 million.
In May,  Edgewater announced the updated NI 43-101 compliant resource at Corcoesto, which consists of a measured and indicated resource of 5.78 million tonnes grading 1.74 g/t gold, containing 325,000 ounces at a 0.65 g/t gold cut-off.
The property also hosts an NI 43-101 compliant inferred resource of 20.27 million tonnes grading 1.76 g/t gold containing 1.15 million ounces of gold.
The latest resource will form the basis for a preliminary economic assessment on the project, which is now nearing completion. Edgewater said it expects the results to be announced  in the next several weeks.
The economic report will also form the basis for all documentation required by the government of Galicia to initiate the exploitation permitting process, a major step in allowing the company the right to construct and operate a gold mine at Corcoesto. Permit applications are expected to be submitted by the end of 2011, Edgewater said.
"Since acquiring the Corcoesto Gold Project in July, 2010 Edgewater has completed 12,400 metres of infill and step-out diamond drilling and has successfully increased the gold resource by over 400%," said president and CEO, George Salamis.
"Over the past year Edgewater has made great progress at Corcoesto and has assembled a world-class team of gold project builders, environmental managers and engineering consultants, all of whom have a proven track-record to advance Corcoesto into its next phase of growth.
"With the PEA nearing completion and after recently spending some time at Corcoesto I am very encouraged on how the project is advancing both from an economic and mine permitting stand point."
Edgewater now has four diamond drill rigs conducting a program of infill and step-out drilling on the project, with results returning intersections including 16.45 metres of 2.08 g/t gold in hole DDH11W38.

Aside from Corcoesto, Edgewater is developing the Enchi gold project in Ghana, West Africa.

WesternZagros sells first oil to market

WesternZagros Resources (CVE:WZR) said Thursday that it has received payment for its first sale of crude oil to the domestic market in the Kurdistan region of Iraq.

First oil production from the Sarqala-1 extended well test was achieved on October 18, and first lifting occurred by truck today.

Shares of the company were up 2.94% to $0.7 as of 12:47pm ET.

"Production start-up marks a new chapter in the company's history, as WesternZagros takes its first steps to become an exploration and production company, rather than a pure exploration company," said CEO Simon Hatfield.

"We are appreciative of the process established by the Kurdistan Regional Government's Ministry of Natural Resources, which requires pre-payment directly to WesternZagros for the contracted volumes. Thanks to the diligence of our in-country operations personnel, the start-up was conducted in a safe, responsible manner and ahead of schedule."

Production started at approximately 2,000 barrels of oil per day (bopd) and is anticipated to increase towards 5,000 bopd in the near future, the company said.

WesternZagros signed an initial sales contract for delivery of approximately 33,500 barrels of oil, priced in the range of US$50 to US$60 per barrel. The company said it plans to use the information from the extended well test to determine future development activities, including increased production potential.

The company also gave updates on two of its exploration wells, the Mil Qasim-1 and the Kurdamir-2 wells. At Mil Qasim-1, the company's third exploration well, the rig is currently drilling ahead at 1,800 metres in the targeted Upper Fars Reservoir, which has a mean estimate of 106 million barrels of oil for gross unrisked prospective resources. Following a delayed spud date, drilling is now proceeding on time and on budget.

At Kurdamir-2, the exploration well spudded on October 25, and is anticipated to be completed by June 2012. The well is being drilled on the flank of the Kurdamir structure approximately two kilometres from the Kurdamir-1 discovery well. The combined mean estimate of the gross unrisked prospective resources for the Oligocene, Eocene and Cretaceous reservoirs being targeted by the Kurdamir-2 well is over 585 million barrels of oil.

WesternZagros is an international natural resources company developing and producing crude oil and natural gas in Iraq. The company, through its wholly-owned subsidiaries, holds two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq.

Black Iron to release PEA for Shymanivske project on Monday

Black Iron (TSE:BKI) said Thursday that it plans to release the initial results of the company's preliminary economic assessment (PEA) for its Shymanivske iron ore project in Kryviy Rih, Ukraine prior to market open on October 31.
The company, which completed its initial public offering in March, continues to advance its project and remains on track for anticipated production in fiscal year 2015, it said.
Yesterday, Black Iron annonced that it received a favourable court ruling allowing it to resume drilling activities at its Shymanivske iron ore project.
The Dnepropetrovsk District Administrative Court ruled in favour of the company with respect to a temporary suspension of activity at the site, imposed by the Dnepropetrovsk Region Ecological Inspectorate.
Following the decision, the company will now apply for the required drilling permits and mobilize diamond drill rigs back to site in preparation for its first definition and exploration program, which is aiming to increase the size of the resource at the property to 1.0 to 2.0 billion tonnes at a grade of 28% to 32% iron.
Currently, the Shymanivske project has an existing NI 43-101 compliant measured and indicated mineral resource containing 345 million tonnes grading 32% iron, and an additional inferred mineral resource containing 469 million tonnes grading 31% iron.
The company's new targets are based on known mineralized zones open along strike to the north and at depth, as well as on results from a recently completed ground geophysical program.
The initial definition and exploration drill program will consist of 20,000 metres of drilling, laboratory assays of core, and an updated independent resource estimate by Watts, Griffis and McOuat Limited - due out in the second quarter of 2012.
The drill campaign will start with seven drills once necessary permits are received, and is expected to take five months to complete.
The Shymanivske project is surrounded by five other operating mines including ArcelorMittal's iron ore complex. Black Iron also holds an exploration permit for the adjacent Zelenivske project which it intends to further explore.

Digital Shelf begins Direct Response TV campaign in Canada for GSP RUSHFIT DVD series

Digital Shelf Space Corp. (CVE:DSS)(OTCQX:DTSRF) said Thursday it has now started its Direct Response TV campaign in Canada for its GSP RUSHFIT DVD home workout fitness series, starring Montreal-based Mixed Martial Arts (MMA), World Welterweight Champion, George St-Pierre.
"Now that we are in over 80% of the potential Canadian retail doors available, we are excited to launch our new two minute, one minute and 30 second Direct Response TV infomercials, to help support our Canadian retail sell through and drive increased sales online at," said president and CEO, Jeffrey Sharpe.
The infomercials will air on a selection of channels, including Sportsnet One, Fox Sports World and Showcase Action among others, the company said.
Indeed, the GSP RUSHFIT DVD series is already carried in Canada by major retailers including Sears Canada, Zellers, Walmart, Future Shop, National Sports, Sports Experts, Sport Check, Best Buy, and Canadian Tire. It is also carried in the US by The Sports Authority and Academy Sports and Outdoors, with the Direct TV infomercial campaign beginning there earlier this month.
The GSP RUSHFIT DVD series was designed to appeal to those with an interest in MMA and MMA training methods, for a complete and efficient home fitness workout program, with minimal equipment. The DVD series uses various MMA conditioning exercises, intense circuit style training and body weight training for fitness consumers to build muscle, cut weight and get in shape.
In the six months ending June 30, Digital Shelf generated sales of $1.14 million. Second quarter sales rose 3.6% sequentially, to $582,251 over the first quarter. These numbers are expected to improve further in the second half, as the number of stores selling GSP RUSHFIT continues to increase.
Over 25,000 copies of the DVD series have already been sold.
Last week, Digital Shelf said that as of the end of the third quarter, its GSP RUSHFIT DVD workout series has now been placed in over 4,000 stores across Canada, beating the company's own initial target of 3,000 stores, now capturing over 80 percent of the key Canadian retail distribution channels available.
The GSP RUSHFIT DVD series is now represented in more than 90 countries around the world, through Digital Shelf's global distribution agreement with Northern Response.
With the fourth and first quarter being the peak season for selling fitness products of this nature, Digital Shelf said it anticipates "increased awareness, consumer demand and ultimately increased Canadian and International retail distribution for GSP RUSHFIT" as a result of the launch of its Direct Response TV campaign in North America.
Aside from retail stores, the product can also be purchased through the GSP RUSHFIT website (
Digital Shelf Space is an independent producer of home entertainment content and online delivery technology provider to digital retailers, content owners and aggregators.

Mountain Lake releases latest holes from Leprechaun, shows promise for upcoming estimate

Mountain Lake Resources (CVE:MOA) announced Thursday the latest drill results from the Leprechaun deposit, part of the joint venture Valentine Lake gold property in central Newfoundland, showing good potential for the upcoming new resource estimate.

The company, along with its 50/50 joint venture partner Marathon Gold (TSE:MOZ), received results from eight holes, including 5.99 grams per tonne (g/t) of gold over 10.8 metres in hole VL-11-345, which hosts 28.88 g/t gold over 1.8 metres.

Results are still pending on the final 22 of 145 resource expansion holes completed at the Leprechaun deposit in 2011, with the program now completed, the companies said.

Other notable results released today include 3.69 g/t gold over 12.4 metres, including 39.8 g/t gold over 1.0 metre in hole VL-11-343; and 3.34 g/t gold over 9.0 metres, including 9.52 g/t gold over 2.7 metres in VL-11-344.

“Good lateral continuity between high-grade intercepts within the high-grade shoots of the Leprechaun Deposit continues to be demonstrated and this will have a positive impact on the upcoming new resource estimate," said president and CEO of Mountain Lake, Gary Woods.

Mountain Lake said the new Hanging Wall Zone reported in early October continues to expand with new mineralization intersected in drill holes VL-11-345 with 6.53 g/t gold over 2.6 metres, hole VL-11-347 with 4.41 g/t gold over 2.9 metres, and hole VL-11-343 with 2.15 g/t gold over 2.9 metres.

In addition, significant new Footwall Zone intercepts reported include 5.73 g/t gold over 2.4 metres with 17.09 g/t gold over 0.8 metres in hole VL-11-353, and 3.20 g/t gold over 2.8 metres in hole VL-11-355.

"The remaining 2011 drilling will focus on initial testing of the newly discovered J. Frank Zone and hanging wall mineralization where coarse visible gold has been exposed, as well as the underlying structurally equivalent setting to the Main Zone at the Leprechaun Deposit," added Woods.

Indeed, Mountain Lake said drill rigs have now been moved 1.5 kilometres southwest along strike to conduct initial drill testing of the newly discovered J. Frank Zone, where bedrock grab samples from trenching returned gold values from less tha 5 parts per billion (ppb) gold to up to 581,875 ppb, or 581.88 g/t.

The Valentine Lake Property is a 50/50 joint venture between Marathon Gold and Mountain Lake with the Leprechaun deposit situated at the south-western end of a 23 kilometre long, gold-bearing mineralized corridor. Marathon is the operator of the project, with both partners having jointly funded a $7.1 million resource expansion and exploration program in 2011, which has now been completed.

This year, 24,938 metres were drilled at the Leprechaun deposit, and an updated resource estimate is due out before year-end.
Currently, the deposit has an NI 43-101 compliant measured and indicated resource of 3.28 million tonnes grading 2.62 g/t gold for a total estimated 277,000 ounces of gold, and an associated inferred resource of 4.4 million tonnes grading 2.01 g/t gold for an estimated 285,000 ounces of gold. The 2010 resource was estimated using a 0.5 g/t gold minimum cut-off over a 3 metre minimum width.

Solitario Exploration: developing a multi-commodity mid-tier mining house

Solitario Exploration and Royalty (TSE:SLR, NYSE AMEX:XPL) continues to advance the Mount Hamilton Gold and Silver Project, located at the southern end of the Battle Mountain gold trend in Nevada. The Company is earning an 80% interest from Ely Gold and Minerals (CVE:ELY) who retain the balance of the minority interest.
The Mount Hamilton Project covers 3,900 acres, and is located in an established mining district which is 40 miles from Ely. The Project currently hosts a NI 43-101 compliant mineable in pit resource at the Centennial Gold Deposit of 17.7 million tonnes at 0.025 oz/t Au, for 444,000 ounces of gold, and 0.147 oz/t Ag, for 2,594,000 ounces of silver.
The Centennial Gold Deposit is a small part of a very significant strike line that extends over a length of 15,000 feet and variable width of up to 3,000 feet, and includes inferred non-compliant resources at Centennial Extension with 6.84 million tonnes at 0.018 oz/t Au, for 122,000 ounces, North East Seligman with 2.62 million tonnes at 0.035 oz/t Au, for 93,000 ounces, Chester with 0.87 million tonnes at 0.031 oz/t Au, for 27,000 ounces, and Fiveway with 0.79 million tonnes at 0.060 oz/t Au, for 48,000 ounces;  for a grand total of 11.12 million tonnes at 0.026 oz/t Au,  containing 290,000 ounces of gold.
Management recently indicated at the Denver Gold Forum that they believe that the Mount Hamilton Project may develop into a 1 to 2 million ounce gold resource across the entire strike line.
SRK Consulting is completing an independent Feasibility Study, and has proposed a number of improvements to prior plans that include a production increase from 5,000 to 8,500 tonnes per day, which equates to an annualized production rate of 3 million tonnes.
The Centennial Gold Deposit is contained within an open pit that contains a mineralized gold zone that measures 2,000 by 1,000 feet, where 20 foot benches will be excavated utilizing 100 ton capacity haul trucks that will deliver ore to crushers located next to the open pit. The life of mine waste to ore ratio is estimated at approximately 2.5 tons of waste, to 1.0 ton of ore, with waste ore hauled to a storage area constructed nearby the open pit.
The crushed gold ore will be sent down a 3,400 foot long conveyor to a secondary crusher that will reduce the ore to minus ¾ inch, and then delivered it to a heap for leaching. The leachate will be collected and piped to a standard adsorption and desoprtion gold recovery plant for the production of gold and silver, in the form of doré bars. Recovery rates are expected to be around 75% for gold, and 36% for silver.
Capital costs for the entire operation are still being developed as part of the Feasibility Study, but are anticipated to be $70 million, plus-or minus 15%.
Solitario is completing environmental permitting with state and federal agencies, as drilling continues to test extensions of higher grade mineralization along the eastern edge of the Centennial open pit deposit, and gold mineralization at the Chester Prospect, situated approximately one mile to the south of Centennial. The next resource upgrade is expected in 2 to 3 months and is expected to outline additional gold and silver ounces within the Centennial open pit.
The release of the completed Feasibility Study is expected at the end of the of the fourth quarter of 2011, and should establish a timeline for final development plans that lead to mine construction.
Solitario maintains a number of free carried minority interests in projects that are under active development that include a 30% interest in the Bongará Zinc Project in Peru, which is known as one of the world’s largest undeveloped zinc projects. Votorantim Metais, who are the world’s third largest zinc producer and own a zinc smelter based in Peru, are developing Bongará.
Bongará has potential to exceed 20 million tonnes of zinc at 9%, silver at 0.4 oz/t, and additional lead credits. The project is expected to produce 1.5 million tonnes of ore per year, yielding concentrates that contain 108,000 tonnes of zinc, 16,000 tonnes of lead, and 400,000 ounces of silver.
Undergrounding tunneling, development of road access, drilling, positive metallurgical testing and permitting continue towards the start of mine production planned for the first quarter of 2015.
Recovered ore is estimated to carry metal values of $200 per tonne, with zinc and lead valued at $1.00 per pound, and silver at $25.00 per ounce. Capital costs are estimated at $140 million, yielding revenues of $282.8 million per year.  Solitario will be free carried through to the start of production, and will reimburse the developer from cash flows generated from mining operations.
Solitario also retains a 30% free carried interest in the Pachuca Real high grade gold and silver project in Mexico, with Buenaventura (NYSE:BVN) holding the majority interest, and currently managing a 16,000 metre drilling and exploration program at Pachuca Norte.
The Pachuca Real Project is located to the north of Mexico City, and includes one of the world’s greatest silver districts that had historical production of 1.46 billion ounces of silver, and 7.0 million ounces of gold. Recent exploration efforts by Buenaventura at Pachuca Norte confirm the presence of widespread mineralization of a similar style to the mineralization that was mined in the historic district.  
The Pedra Branca Platinum and Palladium Project, in Brazil, has been joint ventured with Anglo Platinum (LON:AAL), who may earn up to a 65% interest, and will free carry Solitario for the next $10 million in exploration costs, and Solitario’s share of construction funding.
Pedra Branca has absorbed 318 drill holes, and hosts potential for 2 million ounces of platinum and palladium within the proposed Esbarro Open Pit. Anglo is undertaking geologic resource estimates, preliminary metallurgical testing and local mine infrastructure studies, having already spent $7 million. A major geophysical program is also underway to define new drilling targets within the project area.
The Company has an alliance with Newmont Mining (NYSE:NEM), who may earn up to a 75% interest, and is conducting a drilling program at the 100% owned Cerro Azul Gold and Silver Project in Peru. Cerro Azul contains high grade gold and silver veining that has been identified at surface, and covers an area that measures 3,500 metres by 2,000 metres.
Solitario holds $17 million in cash, and is joint venture funded for an additional $12 million over the current year on a number of advanced projects. The Company maintains a long history of minimal share dilution, with 36.6 million shares outstanding, capitalized at $58 million.
Solitario is developing into a mid tier mining house with zinc production forecast from Bongará in 2015, and awaits a development decision on the timeline for mine construction and gold production at Mount Hamilton; and mine development at Pedra Branca. The Company is also developing a pipeline of 100% owned projects for future joint venture funding.  A lot of ban