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South American Gold and Copper Company Limited (the
"Company") (TSX-SAG) reported today that its Board of Directors has
made a decision to reverse split the Company's shares on the basis of ten old
shares for one new share subject to shareholder approval at the Company's
Annual and Special Meeting of Shareholders to be held on March 28, 2011. The
Company will also seek shareholder approval to change the name of the Company
to "Cerro Grande Mining Corporation". The Company also intends to
change its TSX stock symbol to "CEG" subject to approval of the
name change by the shareholders.
The financial reasons given for this decision are:
- The
Company's Pimenton Gold/Copper mine is
expected to continue producing at gradually increasing rates. The
Company has also recommenced work on its porphyry deposit at Pimenton. The number of shares currently outstanding
dilutes the earnings per share and gold ounces produced per share of the
Company to a level which makes it extremely difficult to obtain
institutional investor interest.
In addition to the positive performance of the Company's Pimenton Gold/Copper mine, adequate recognition of
the Company's exploration and development program both in the Pimenton mine and on its porphyry deposit are not
being given full credit. An up date of these
activities is as follows:
-
- Drifting
on the 3375 and 3315 levels at the northern end of the Lucho vein has shown an increase in mineralization
width.
On the 3375 level, the last 43 meters to the north averaged, over a
width of 0.86 meters, 11.36g/t gold, 1.02% copper and trace silver.
On the 3315 level over 90 meters, the first 50 meters averaged, with a
1.32 meter width , 22.65 g/t gold, 2.55% copper and trace silver. The
second 40 meters averaged, over 0.97 meter width, 11.83 g/t gold, 1.66%
copper and trace silver.
The average vein width to date within the Pimenton
mine area has been less than 35 centimeters which is diluted out to a
minimum of 80 centimeters for mining. The associated alteration adjacent
to the vein has also increased in width from a few centimeters to
several meters. The increased width with good grades and increased
alteration is in line with the long held view that the Pimenton veins will improve with depth.
-
- A
crosscut being driven on the 3260 Esperanza level will come under the
main producing veins. At 185 meters from the surface portal, a 345
degree trending structure with strong mineralization has appeared. This
structure has been followed for 170 meters. At its southern end a strong
vein at 325 degrees strike cuts obliquely across the main structure and
has been drifted on for 40 meters averaging over a 0.64 meter width,
4.76 g/t gold; 51.58 g/t silver and 3.37% copper. At the northern end of
the main structure and over an open length of 65 meters to the north,
there is a well developed stockwork
which is in the order of 30 meters wide. Assays from samples on 2 meter
centers within two remuck crosscuts across the
structure average:
Stockwork Assays:
Southern crosscut: over 18 meters 1.66 g/t gold, 0.128 copper with trace
silver. Northern crosscut: over 20 meters 1.26 g/t gold, 0.07 % copper
with trace silver.
The importance of the 30 meter wide stockwork
referred to above is that it is thought to be near porphyry copper gold
mineralization. The trace of the northwest striking prominent Pimenton Valley fault coincides in the mine area
with a strong gold, copper, and molybdenum Mobile Metal Ion anomaly as
well as an induced polarization anomaly. The fault lies approximately
400 meters to the southwest of the near parallel crosscut on the 3260
level. This target is well within the capacity of the new drill. In the
coming winter, when the rig cannot be used on much of the surface at Pimenton due to snow conditions, drilling
underground will probe at depth the northwest trending mineralization
referred to above as well as the parallel Pimenton
Valley Fault.
-
- Presently
a start has been made on a new diamond drill hole, PP-001, 200 meters
due north of Rio Tinto's hole PMDD-004. PP-001 is located at UTM
coordinates: 6407079 north; 385871 east; altitude 3532 meters; azimuth
90 degrees and an inclination of 65 degrees. This hole will check for a
northern extension of the Resource estimate of 40,000,000 tons running
0.37% copper and 0.42 g/t gold made recently by Watts, Griffiths and McOuat Limited. Drilling will continue on the
surface until the onset of winter in late April or early May 2011.
-
Positive cash flow and earnings from the Pimenton
Gold/Copper mine has made this aggressive exploration possible. As the
positive earnings and cash flow from Pimenton
continue to increase, exploration of the porphyry deposit at Pimenton will advance concurrently at increasing rates.
The Board believes that the achievements made to date and the prospects for
the Company's future are not recognized by the financial markets and believes
the reverse split will attract greater institutional interest in the Company.
Dr. David R. S. Thomson, EVP and Director of Exploration and a
Director of the Company, is a Qualified Person under NI 43-101 has reviewed
and approved this News Release.
South American Gold and Copper Company Limited is a minerals
producing, exploration and development company with properties currently
focused in Chile.
FORWARD-LOOKING INFORMATION
This news release contains certain "forward-looking information".
All information, other than information pertaining to historical fact which
addresses activities, events or developments that the Company believes,
expects or anticipates will or may occur in the future constitutes
forward-looking information. Forward-looking information is often, but not
always, identified by the use of words such as "seek",
"anticipate", "believe", "plan",
"estimate", "expect", and "intend" and
statements that an event or result "may", "will",
"can", "should", "could", or "might"
occur or be achieved and other similar expressions. Such forward-looking
information includes, among other things, statements relating to: the
expectation that further drilling will add substantially to existing
reserves, the proximity of the 30 meter wide stockwork
to the porphyry copper gold mineralization, underground drilling during the
coming winter, the expected timing for continuation of surface drilling and
the expected effect of the reverse split.
Forward-looking information reflects the current internal projections,
expectations or beliefs of the Company based on information currently
available to the Company. Forward-looking information is subject to a number
of risks and uncertainties that may cause the actual results of the Company
to differ materially from those discussed in the forward-looking information,
and even if such actual results are realized or substantially realized, there
can be no assurance that they will have the expected consequences to, or
effects on, the Company. Factors that could cause actual results or events to
differ materially from current expectations include, among other things:
changes in mineral prices; changes to government regulations and policies
affecting the Company's business and activities, including tax and trade laws
and policies; delays in obtaining or failure to obtain required regulatory
permits and approvals from government authorities; uncertainties relating to
the availability and costs of financing needed in the future; the
uncertainties involved in interpreting drilling results and other geological
data; the possibility that future exploration results will not be consistent
with the Company's expectations; environmental and safety risks including
increased regulatory burdens; weather and other natural phenomena; seismic
activity; risk relating to the labour supply and
the other risks involved in the mineral exploration and development industry;
changes in the anticipated demand for minerals including factors related to
world population growth, and income per capita; changes in equity and debt
markets; inflation; changes in exchange rates; exploration costs varying
significantly from estimates; delays in the exploration and development of,
and/or commercial production from the properties the Company has an interest
in; equipment failure; unexpected geological or hydrological conditions;
political developments in Chile; imprecision in preliminary mineral resource
estimates; success of future exploration and development initiatives; the
existence of undetected or unregistered interests or claims, whether in
contract or in tort, over the property of the Company; risks related to the
exploration stage of the Company's properties; other exploration, development
and operating risks; liability and other claims asserted against the Company;
and volatility in prices of publicly traded securities.
Any forward-looking information speaks only as of the date on which it
is stated and, except as may be required by applicable securities laws, the
Company disclaims any intent or obligation to update any forward-looking
information, whether as a result of new information, future events or results
or otherwise. Although the Company believes that the assumptions inherent in
the forward-looking information are reasonable, forward-looking information
are not guarantees of future performance and accordingly undue reliance
should not be put on such statements due to the inherent uncertainty therein.
Mineral resource figures included in this news release are estimates
and no assurances can be given that the indicated levels of gold will be
produced. Such estimates are expressions of judgment based on knowledge,
mining experience, analysis of drilling results and industry practices. Valid
estimates made at a given time may significantly change when new information
becomes available, including as a result of future exploration activities.
While the Company believes that the mineral resource estimate included in
this news release are well established, by their nature mineral resource
estimates are imprecise and depend, to a certain extent, upon statistical
inferences which may ultimately prove unreliable. The technical report
entitled "A Technical Review of the Pimenton
Properties in Central Chile for South American Gold and Copper Company Limited"
dated January 31, 2011 prepared by James A. McGregor of Watts, Griffis and McOuat Limited and
Marco A. Sironvalle contains additional information
relating to the Pimenton properties. A copy of this
technical report is available under the Company's profile on SEDAR at www.sedar.com.
The extent to which mineral resources may ultimately be reclassified
as proven or probable reserves is dependent upon the demonstration of their
profitable recovery. The evaluation of mineral reserves or mineral resources
is always influenced by economic and technological factors, which may change
over time. No assurances can be given that any mineral resource estimate will
ultimately be reclassified as proven or probable reserves.
If the Company's mineral resource estimates for its mineral properties
are inaccurate or are reduced in the future, this could have a material
adverse impact on the Company.
Mineral resources are not mineral reserves and do not have
demonstrated economic viability. Measured and indicated mineral resources are
sufficiently well defined to allow geological and grade continuity to be
reasonably assumed and permit the application of technical and economic
parameters in assessing the economic viability of the resource. Inferred
mineral resources are estimated on limited information not sufficient to
verify geological and grade continuity or to allow technical and economic
parameters to be applied. Inferred mineral resources are too speculative
geologically to have economic considerations applied to them to enable them
to be categorized as mineral reserves as there is no certainty that mineral
resources can be upgraded to mineral reserves through continued exploration
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