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![]() | ![]() Nuevo Milenio Property, Nayarit, Mexico
A geological report on the Nuevo Milenio Project, dated September 28, 2003, compliant with National Instrument 43-101 ("NI 43-101") was prepared for Cream Minerals Ltd. by Henry M. Meixner, P.Geo., and filed on SEDAR on October 23, 2003. (Please click here to view report) Subsequently, a geological report on the Dos Hornos and Once Bocas gold-silver zones, dated February 16, 2006, compliant with NI 43-101, was prepared for Cream Minerals Ltd. by Ferdinand Holcapek, P.Eng., Geology, who is also Director General of the Company's wholly owned subsidiary, Cream Minerals de Mexico, S.A. de C.V. ("Cream Minerals de Mexico" or "CMM"). This report was filed on SEDAR on March 1, 2006. (Please click here to view report) A geological report on Cerro Chacuaco - Arroyo Chacuaco Silicified - Quartz Stock Work Zone, dated January 30, 2007, compliant with NI 43-101, was prepared for Cream Minerals Ltd. by Ferdinand Holcapek, P.Eng., Geology, who is also Director General of the Company's wholly owned subsidiary, Cream Minerals de Mexico, S.A. de C.V. ("Cream Minerals de Mexico" or "CMM"). This report was filed on SEDAR on February 15, 2007. (Please click here to view report) INTRODUCTION:
NUEVO MILENIO SILVER GOLD PROJECT - NAYARIT STATE, MEXICO
The 100% owned Nuevo Milenio silver-gold project ("Nuevo Milenio") encompasses 2,560 Hectares (Ha) and is located in Nayarit State, Mexico. Nuevo Milenio is 27 kms driving distance (24 kms of which are by highway and paved roads, 3km's are by gravel road) from Tepic, the capital of Nayarit State. Tepic is an important commercial centre with a population of over 300,000 people located 150 kms northeast of Puerto Vallarta. Cost effective access to infrastructure is an important feature of Nuevo Milenio with easy access to power lines, water, a railway, a highway, and an airport. In July 2009, Cream signed a binding Letter of Intent (LOI) with Roca Mines Inc. ("Roca") to option Nuevo Milenio. Under the terms of the LOI Roca has committed to exploration expenditures of US$12 million over a four year term ending on July 24, 2013. If Roca completes the US$12 million in exploration expenditures on or prior to the four term Roca will at that time earn a 50% interest in Nuevo Milenio. Roca then has the option to earn a further 20% interest in Nuevo Milenio, for a total interest of 70%, through the completion a positive feasibility study within three years of November 24, 2013. Should Roca earn an interest in Nuevo Milenio Cream and Roca would then participate proportionately in the further development of Nuevo Milenio. Cream is very pleased that Roca, after assessing several advanced stage project opportunitites has chosen to partner with Vream on Nuevo Milenio. The Nuevo Milenio meets Roca's criteria of revenue growth through the potential near-term development of new mining operations, exposure to additional mining friendly jurisdictions an diversification of metals production that could generate a natural hedge to global economic and financial conditions. Regionally, Nuevo Milenio is situated within an early Miocene volcanic caldera field of the Sierra Madre Occidental Volcanics, which is traversed by the Tepic -- Zacoalco rift zone, an en echelon extensional structural zone forming the boundary zone with the Jalisco block. The Tepic area is overlain by the young volcanics of the Trans Mexican Volcanic Belt. The Nuevo Milenio Project is a low sulphidation, epithermal precious metal prospect containing gold-silver mineralization in quartz veins and in quartz stockwork zones within an area of Miocene volcanics in a collapsed caldera structure. EXPLORATION HISTORY Nuevo Milenio has been explored by the Company beginning in 2000. There are four major areas of gold-silver mineralization; Veta Tomas, Dos Hornos, Once Bocas and Chacuaco-Cafetal. They have been identified within a small portion of the Nuevo Milenio that has widespread exploration potential for similar mineral occurrences. In January 2008, the Company filed a National Instrument 43-101 Technical Report outlining a silver equivalent Inferred Mineral Resource of 71,000,000 ounces (50:1 ratio) contained within 17.9 million tonnes. A review of the exploration data was conducted with the objective of defining the high grade underground zones within the Veta Tomas, Dos Hornos 1, Dos Hornos 2 and Once Bocas areas. The outcome of the data review was summarized in a National Instrument 43-101 Technical Report filed in December 2008. The technical Report outlined a silver equivalent Inferred Mineral Resource of 54,600,000 ounces (50:1 ratio) contained within 5.07 million tonnes. The precious metal mineralization discovered at Nuevo Milenio to date occurs in north-westerly aligned structural zones of silica alteration in the central part of two nested caldera structures. The detailed investigated mineralized zone has a strike length of about 5 kms and a width of 3 kms (1,500 Ha). Within this mineralized zone the core zone of mineralization is 3 kms x 2 kms (600 Ha) which hosts 3 mineralized zones, spaced 500 m apart. Each zone consists of a 150 metre wide alteration zone with quartz stock work cut by parallel quartz veins. Veta Tomas -- Dos Hornos 1 and Dos Hornos 2 zones were defined by diamond drilling (33 holes) for a strike length of 1,300 m intersecting 3 to 5 well mineralized quartz veins (2 to 4 m wide) cutting a 20 to 30 m wide quartz stockwork zone showing good silver-gold mineralization. Once Bocas was diamond drilled (8 holes) along a 350 metre segment and in combination with surface and underground sampling delineated a 100 metre wide zone of quartz stockwork cut by five (2 to 4 metre wide) almost parallel quartz veins suggesting open pit potential. The Once Bocas zone was traced by surface work for a total strike length of 1,600 metres. Chacuaco -- Cafetal Mineral Resource target was explored for a total strike length of about 2,100 metres. The work program concentrated on the northern 600 metres of Cerro Chacuaco. This is an area of silicification, quartz stockwork about 200 metres wide, which is cut by four (2 to 20 metres wide), near parallel quartz veins assaying silver-gold. This is a potential open pit area and is amenable to underground mining of the narrower high grade viens. Low Hills is 1.5 km north of this core mineralized area, showing silica capping, adjoined by areas of quartz veining and quartz stockwork zones which have had little or no exploration work performed except regional geological mapping and rock chip geochemistry. This is a prime area for potential disseminated silver - gold mineralization hosted by an intense argillic- sericite -- feldspar alteration zone in rhyolitic, lithic tuffs.
PREVIOUSLY REPORTED NI 43-101 INFERRED MINERAL RESOURCES
2006 and 2008
1. NI 43-101 Technical Report dated February 12, 2006, Dos Hornos & Once Bocas Gold Silver Structure Nuevo Milenio. 2. NI 43-101 Technical Report dated January 30, 2008, Evaluation Report Dos Hornos and Veta Tomas Gold Silver Structures Nuevo Milenio Project. Tonnes: 17,920,000 Au oz: 375,000 Ag oz: 52,212,000
Silver Equivalent (Gold -- Silver price Ratio = 50:1): 71,000,000 oz Assumes 100% Recovery The Inferred Mineral Resources reported in January 2008 were calculated during a period of historically high gold and silver prices. Consequently, the anticipated economic cut off grade at that time was estimated to be 60 g/t silver to 70 g/t silver. Following the correction in gold and silver prices beginning in March 2008, the Inferred Mineral Resource data was re-evaluated in light of gold and silver prices during the November 2008 to December 2008 time frame (approximately US$740.00 gold and US$10.00 silver). Based on the anticipated higher cut off grade of 160 oz silver per tonne to 170 oz silver per tonne narrower mineralized vein structures at significantly higher grades have been identified and are outlined below. REVISED NI 43-101 INFERRED MINERAL RESOURCES December 2008
Tonnes: 5,088,000 Au: 1.660 g/t, Ag 251.09 g/t Au: 271,500 oz, Ag: 41,072,000
Silver Equivalent (Gold-Silver price Ratio = 50:1): 54,647,000 oz, Assumes 100% Recovery NEW DISCOVERY In June 2009 a new discovery at Nuevo Milenio was made. A channel sample taken just inside a recently discovered historic Spanish working on Cerro Dos Pinos, which is located approximately 500 metres South East of the high-grade silver-gold Veta Tomas vein, yielded assays of 0.95 grams per ton gold and 452 grams per ton Silver respectively. Cerro Dos Pinos lies approximately 500 metres South East of drill hole DDH 07-23 which was drilled on the Veta Tomas Structure. The Company believes that the new discovery is a probable fault segment of the high- grade silver-gold Veta Tomas Structure and if correct extends the known strike length of the Veta Tomas - Dos Hornos Zones from 1,300 metres to 1,800 metres. The historic Spanish adit, which is 1.60 m wide and caved, was driven on a quartz vein structure outcropping within a window of younger devitrified rhyolite flows. The following assays are taken from various locations along the Veta Tomas vein structures to facilitate comparison of the new discovery with previous assays at Nuevo Milenio:
ROCA INITIAL EXPLORATION OUTLINE AND EXPENDITURE COMMITMENT Roca intends to follow-up and expand on Creams excellent work to date by aggressively pursuing several clear opportunities at Nuevo Milenio including the following:
In order to acquire a 50% legal and beneficial interest in Nuevo Milenio, Roca must spend a cumulative US$12, 000,000.00 in exploration work on the property by July 24, 2013, in accordance with the following schedule:
In support of the originally proposed underground program by Cream the Company has initiated the required environmental studies, including biological, hydrological and land use, as well as a survey of the areas required to support underground exploration. It is anticipated that the environmental permits will be granted in three months time. Powder magazines which comply with government specifications have been completed and application for permits to purchase and use explosives has been submitted. Negotiations have been initiated to secure surface land use rights and a contractor has been selected. Negotiations have begun to secure the necessary surface land use permits. LARGE SCALE EXPLORATION POTENTIAL Numerous additional areas of the quartz veins, quartz stockwork, or silica caps have been observed on the Nuevo Milenio. Some of these mineralized areas are extensions of the known Veta Tomas -- Dos Hornos System. Other silicified areas showing limited outcrops due to the Basalt cover have been observed as well. In addition, within the area of the silica caps, geological evidence suggests the presence of hydrothermal alteration favorable for disseminated gold -- silver mineralization. It is important to note these occurrences have been observed over a strike distance of 5 kms suggesting significant exploration upside potential on a very broad scale. LEVERAGE TO PRECIOUS METALS PRICES The presence of a significant silver equivalent Inferred Mineral Resource provides the Nuevo Milenio Project with excellent leverage to silver and gold prices. GEOLOGY Regionally, Nuevo Milenio is situated within an early Miocene volcanic caldera field of the Sierra Madre Occidental Volcanics, which is traversed by the Tepic -- Zacoalco rift zone, an en echelon extensional structural zone forming the boundary zone with the Jalisco block. The Tepic area is overlain by the young volcanics of the Trans Mexican Volcanic Belt. The Nuevo Milenio Project is a low sulphidation, epithermal precious metal prospect containing gold-silver mineralization in quartz veins and in quartz stockwork zones within an area of Miocene volcanics in a collapsed caldera structure. The Nuevo Milenio property originally consisted of 4 lots encompassing 6927.8482 hectares and was denounced in February 2000 by Arnoldo Carrera Gamboa on behalf of Cream Minerals de Mexico. Titles to the Lots were received in February 2001 with the agreements to transfer the Lots to Cream Minerals de Mexico signed in 2003 and registered with the Department of Mines with Cream Minerals de Mexico as beneficiary. In June 2005 an application to reduce Nuevo Milenio Fraccion 1 and to drop CMM II was filed with the Department of Mines. The remaining Lot comprises the current 2,500 Ha Nuevo Milenio property. During the mapping of the area it became evident that it is traversed by a multitude of old mule trails providing access to different mining areas. The Dos Hornos, Once Bocas, Chacuaco, Cafetal and Chacuaco West zones were identified during 2000 to 2003. Rock and soil geochemistry and channel sampling, followed by diamond drilling in August 2002 and November 2003, were completed as follows:
In November 2003, a major diamond drill program consisting of 19 holes was initiated and completed in April 2004. Although high-grade intersections were obtained, the results of the programs were considered inconclusive and further exploration was suspended in May 2004. A re-evaluation of the data was initiated during August 2005. This program concentrated on the Veta Tomas - Dos Hornos North and Once Bocas zones as the targets with the highest probability of success. Old Spanish mine sites, consisting of shafts, declines, adits and cross-cuts were identified, opened and sampled. The results obtained allowed the Diamond Drill data and surface data to be re-interpreted. VETA TOMAS AND DOS HORNOS ZONE The Veta Tomas - Dos Hornos Zone has a strike length of about 3 km. It consists of at least 4 parallel veins within a 150 m wide zone. Quartz stockwork and intense epithermal alteration consisting of silica flooding, argillic alteration and brecciation defines the zone. A geochemical soil survey, followed by mapping, caterpillar trenching, channel sampling and diamond drilling of 6 holes (DDH 01-03, 02, 11, 17, 18, 19) in 2003 was completed. In July 2005, a review of all data on the Nuevo Milenio project starting with the 2002 and 2003 diamond drill programs was initiated. This work led to the location of several old Spanish workings which were subsequently cleaned, opened and channel sampled. On Dos Hornos North, Vein 1, along a 550 m section Adit 1, Adit 2, Adit 3, x-cut Adit 4, Shaft 2, Shaft 4, Shaft 5 and 3 sublevels were cleaned, mapped and sampled. The information obtained established that:
Once Bocas is a zone of quartz veining, quartz stock work and quartz breccia up to 100 metres wide as indicated by surface mapping and DDH data. This is supported by mapping of old Spanish mine workings.
The Cerro Chacuaco, Cafetal and Chacuaco West zones had preliminary work completed consisting of rock geochemistry, soil geochemistry, regional mapping and sampling of underground and diamond drilling. The results on hand show areas of good grade mineralization with potential bulk tonnage but the drill results of DDH 03, 04, 05 -- 2003 and DDH 01, 02 -- 2002 are inconclusive pending further exploration work. The detailed investigation at Cerro Chacuaco helped to clarify the structural setting with the aid of underground data and drill data. Surface mapping shows that the zone explored at Mina Chacuaco dips at -67 SW. The azimuth of the drill was 1850 at -450 which was at a small angle to the strike of the zone, hence the apparent dip of -320 in the plane of the drill hole was too flat for the drill hole to intersect the structure. Detailed mapping and profiling suggest that future drilling will have to be located in Arroyo Chacuaco with Azimuth of N to N35E to intersect the mineralized zone. Further detailed mapping shows that the silicified quartz vein -- quartz stock work zone is exposed in the vicinity of the mine over a width of at least 20 metres. The slope of Cerro Chacuaco is a dip slope of the structure. Channel sampling and rock geochemistry along Cerro Chacuaco and along Arroyo Chacuaco confirm continuation of gold and silver values in sufficient concentration for possible open pit mining. Additional work consisting of trenching and drilling are required to define the indicated mineralized zone. Metallurgical Testing Cream Minerals has conducted four metallurgical tests on samples derived from Nuevo Milenio. The tests were conducted by Inspectorate America Corporation. The best results were obtain by a combination of Flotation with one cleaning circuit followed by cyanidation of the flotation tailings yielding a recovery of 94% for gold and 90% for silver. These are very encouraging test results and indicate the probability of very high gold and silver recovery rates for Nuevo Milenio. The purpose of the tests was to obtain initial results on gold and silver recovery on samples obtained from Nuevo Milenio and to establish parameters for further detailed metallurgical tests. The samples were taken from fresh and partially oxidized mineralized zones. Test materials were collected from historical Spanish workings on Dos Hornos 1 (cross-cut adit 4, Shaft 5 Sublevel 3), Veta Tomas ((Shaft 12) and Once Bocas (Stope). The initial Metallurgical Tests consisted of Cyanide Bottle roll tests, a Scoping Flotation test with one Cleaner circuit, followed, a Cyanide Leach of the flotation tailings and a Thiosulfate Leach Test. The following represent the average recovery for each test completed:
The tests results show that mineralization from Nuevo Milenio is amenable to both, Cyanide leach and or Flotation recovery techniques, followed by the Cyanide leach of flotation tailings. Additional tests are required to determine the effect of a Gravity circuit on total gold recovery and to reduce retention time in the Cyanide leach circuit and or enhance gold recovery in the flotation tests. Further tests would include a second or third cleaning circuit in the flotation test to increase silver recovery and a gravity circuit to scalp off coarse gold. These adjustments may be sufficient to upgrade gold and silver recovery to an acceptable level without the Cyanidation of flotation tailings. The Leach results are based on a 72 hour leach cycle from composite underground channel samples. The average particle size was 80% at 72 micrometers (passing 200 mesh screen). Average consumption of Cyanide (NaCN) was 0.92 kg/ton, average consumption of Lime was 1.68 kg/t. The tests results show that mineralization from the Nuevo Milenio is amenable to both, Cyanide leach and or Flotation, followed by Cyanide leach of flotation tailings. Metallurgical Tests – Summary of Samples
Assays Employed to Establish Head Grade for Metallurgical Tests
Cyanide Bottle Roll Test – 72 hours Leach Cycle
Average Results for Cyanide Bottle roll test Au: 94% Ag: 78% Scoping Flotation Test – 80 %~- 74 micron, 1 cleaning circuit
Average Extraction by floatation: Au: 66%, Ag: 81 % Cyanide Bottle Roll Test of Flotation Tailings – 96 Hour Retention
Average Recovery all Samples of Flotation Tails: Au: 88%, Ag: 56% Flotation Recovery plus Cyanidation of Tailings
Average recovery Flotation plus Cyanidation of Tailings: Au: 94 %, Ag: 90 % Thiosufate Leach Test Leach duration 4 hours
Average Result for Thiosulfate Leach: Au: 21%, Ag: 76% HISTORY In 1524 the Spanish Conquistadores arrived in Tepic and very quickly the search for gold - silver in the district began. The first mine found was at Jalla, followed by Espiritu Santa in 1560, Mina Miravalle in 1650 and the District of Compostela and Santa Maria del Oro. These Mines were Silver Bonanzas with grades up to 50% silver. The Huicillia Mines were explored by Arsarco during the mid 1930's. The old mines, trails, tahonas, dams etc. date back to the period before the War of Independence (1810). After the revolution, 30 years of Indian wars were followed by the Mexican revolution when bands of marauding soldiers, bandits and revolutionary fighters roamed the country site assaulting the miners and farmers. By 1920, when peace returned to Nayarit, all mining sites were overgrown, caved and lost in time. The Nuevo Milenio area was first worked by the Spaniards - pre 1810. Ore was produced from several mineralized zones but mining was restricted to high-grade ore only and hauled by mules to several treatment sites. A Hacienda Metallurgico (Tahonas and Planilla) and small smelters existed in the area. Two Dams, the first at Arroyo Guadalupana and the second at Arroyo Chacuaco were constructed to secure water the year round for milling of ore and to support mine workers and other residents. The main mining activities in the area stopped during the War of Independence against Spain in 1810. The increase of gold prices in the 1930's brought gambusinos back to the area. Numerous small lots were denounced for Precious Opal, but only a few for gold and silver. There is very little evidence of new mine workings for gold and silver originating during this period. Fred Holcapek, P.Eng., Director and Administrator General, Cream Minerals De Mexico, SA de CV, supervises exploration programs on the Nuevo Milenio Project. He is responsible for all technical reporting and is the Company's "Qualified Person" for the purpose of National Instrument NI 43-101. CAUTIONARY NOTE TO U.S. INVESTORS
Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources.
Cautionary Note to U.S. Investors concerning estimates of Inferred Resources.
Using definition Standards for Inferred Mineral Resources as published and adopted by the CIM Council on December 11, 2005: "An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits workings and drill holes." Noted uncertainties inherent in the definition are clarified by the CIM definition standard "Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies." We advise U.S. investors that while these terms are recognized and permitted under Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists, or is economically or legally mineable. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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