Marifil Acquires Promising Limestone Project
+100 Million Tonne Target of Cement-Grade Limestone
Spokane, Washington -- October 21, 2008 -- Marifil Mines Ltd. (TSXV: MFM) ("Marifil" or "the Company") is pleased to announce it has acquired a 100% interest in the Punta Colorado limestone deposit located on the Atlantic coast, near Sierra Grande, Rio Negro Province Argentina.
The 545 hectare Punta Colorado property, comprised of two blocks, is dissected by a narrow access corridor occupied by a good road, a 132-kilovolt power line and a natural gas line with a capacity of 5 kg/cm2.
Marifil originally acquired the property as part of the land package owned by Marifil S.A. Hierro Patagonico Rionegro S.A. (HIPARSA) granted a contract to Marifil to develop the limestone but retained a 20% interest; however, this same contract granted Marifil a 20% interest in any minerals, other than iron, in the Sierra Grande iron deposit. In 2006, HIPARSA sold the Sierra Grande iron mine; this sale precipitated HIPARSA's request to Marifil to either move forward or relinquish the property.
Marifil, the Province of Rio Negro, and HIPARSA have signed a new, superceding contract on August 1, 2008. In the new contract Marifil owns a 100% interest in the limestone deposit, subject only to a 32 hectare parcel which the Province wishes to use for a duty-free industrial area. The Province of Rio Negro has one year to develop a duty-free area on the 32 hectare parcel or it reverts to Marifil under the terms of the present agreement.
Under the terms of the agreement, Marifil is granted a six year term to carry out exploration, followed by a 30 year term for exploitation. The project is subject to a 5% royalty on the mine mouth value of the limestone; the royalty is payable to the Province annually.
The nearby Sierra Grande project is a large, inactive underground iron mine developed by HIPARSA. The mine infrastructure includes an iron pelletizing plant and a kilometer-long, 1,800 tonne-per-hour capacity automated deep-water loading dock capable of handling bulk cargo ships. Built around 1980, at a cost of over $35 million, the loading dock is Argentina's only bulk loading facility.
"As exciting as the size and quality of this deposit is, the adjacent ocean port infrastructure dramatically increases its value and potential to be developed," said John Hite, CEO of Marifil. "It has taken us three years to clarify the legal and title issues as a key step towards developing what we feel is a little known but valuable property for the Company and its investors."
The Punta Colorado limestone beds are flat-lying, and covered by a thin layer of overburden averaging about 0.5 m thick. An upper limestone layer with higher magnesium (MgO) content partially overlies a lower layer with very low MgO content. The upper limestone layer becomes thinner towards the south and is totally removed by erosion in a large valley near the center of the property. Along the margins of the valley, channel samples of the lower limestone contain less than 0.5% MgO (generally, cement-grade limestone contains less than 4% MgO).
The thickness of this limestone layer is probably more than ten meters over most of the 545 hectare property, suggesting a resource of more than 100 million tonnes, supporting previous estimates that had been based on drilling conducted during the 1980s by HIPARSA (this resource estimate is not NI 43-101 compliant). Assay results from this previous testing indicate that the limestone is low in magnesium, sulphur and iron content; evidence it may be cement-grade limestone.
Marifil completed a widely spaced 12 hole test drill program in December 2005 that confirmed the presence of limestone containing <4% MgO. The <4% MgO limestone is partially overlain by a limestone bed containing >4% MgO in the north block but the Company believes that some of the higher MgO content rock could be blended with low MgO rock to make an acceptable feedstock. The drilling results, in addition to evidence gathered from channel samples from several pits and from outcrops along the coastline, indicates a more detailed drilling program is warranted.
The Company plans to carry out market studies and economic analyses to determine whether the resource could support a "cement clinker" plant (clinker is an intermediate product in production of Portland cement) or direct shipping limestone for smelter flux as well as options for agricultural, chemical and other industrial usages.
The Company is considering a number of options with regard to the best way to leverage this potentially valuable asset to the benefit of its shareholders.
This press release has been reviewed and approved by John Hite, President of Marifil Mines Ltd. and by Richard Walters, Executive Vice President of Marifil. Both are Qualified Persons, as defined by National Instrument 43-101, under whose direction the exploration programs are being carried out.
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For further information on the Company and its projects, please refer to Marifil's website www.marifilmines.com
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