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Constitution Mining Makes Significant Discovery in the Gold Sands
of Peru
Lima, Peru - July 23, 2010 - Constitution Mining Corp. (CMIN.OB)
reports that drilling at its Peruvian Gold Sands project has
uncovered two large, variable-grade systems of mineralization returning
values as high as 212.95 milligrams of gold per cubic meter over widths of
4.20 meters (13.77 feet). Both systems lie near the surface, and both
contain ore with gold grades well above the Company's targeted 50mg/cubic
meter cutoff standard for economic consideration. Based on these results,
the Company is developing plans for a pilot dredging and production
operation as a preliminary step towards full-scale production.
To date, CMIN has completed 53 holes of its Phase II, 100-hole drill
program in Gold Sands Drill Grid 1 (GSDG1). The drilling discovered two
large auriferous fluvial channels that meander just below the surface.
Within the channels, the higher-grade gold mineralization tended to be
associated with higher concentrations of quartz pebbles.
The first system of gold mineralization (HBD-33) was discovered near the
mid-point of GSDG1. Five holes were drilled using hand Banka drills at
20-meter spacing. Assuming a 50mg/cubic meter cutoff grade, the drilling
yielded average gold grades of 159.3mg/cubic meter (within a range of 101.1
to 216.0 mg/cubic meter).
The width of the potential pay horizons averages 3.07 meters (10.07
feet) with a range of 2.2 meters to 4.70 meters. The gold is contained in
volcanic-quartz type fluvial gravels beneath an average of only 2.73 meters
(8.95 feet) of sandy overburden. CMIN believes that the shallowness and
accessibility of this pay horizon could contribute significantly to the
economic feasibility of CMIN's Gold Sands project.
The second system of gold mineralization (HBD-XX) trends
northeast-southwest through GSDG1. It was identified in January 2010,
during CMIN's Phase I drill program, by Banka holes 21, 22 and 23.
Subsequent infill drilling, at 30-meter spacing, during the current Phase
II program outlined an average grade of 86 mg/cubic meter along a linear
110 meter (361 feet) channel with an average width of 40 meters (131 feet).
The grade of this fluvial system is well above the 50mg/cubic meter
standard for economic consideration. As with the other fluvial channel
discovered, it is close to surface.
James Prudden, Constitution Mining's Chief Geological Consultant
commented, "The Gold Sands district is formed by meandering rivers
that flow from the mouth of the Manseriche Gorge, which acts as a giant
natural sluice box. Just below the gorge, these waterways deposit gold that
was eroded and transported from the mountains of Peru and Ecuador. The
process has been going on for millions of years. What we have discovered
are two resulting channels of gold mineralization that lie near the surface
and contain grades that far surpass our 50/mg standard cutoff requirement
for economic consideration. Our technical focus now is to follow these
channels through the entire district to build a base of potentially
mineable gold while also looking to discover new channels of
mineralization.''
Consultation With MTI Holland (IHC Merwede's Knowledge Center)
Regarding Pilot Scale Production
Between 2009 and 2010 Constitution Mining executives have had several
meetings with senior representatives of Dutch-based dredging-equipment
manufacturer MTI Holland/IHC Merwede to discuss the economic feasibility of
putting a test dredging operation into production with the goal of moving
into full-scale production as the project advances.
In a detailed report prepared for Constitution Mining by MTI Holland
/IHC Merwede in 2009, it estimated that the costs of gold production will
be US$1.60 - US$2.40 per cubic meter at full-scale production. Based on
CMIN's current preliminary results and a gold price of $1,200/ounce, James
Prudden calculates recoverable gold values from the HBD-33 channel to be
approximately $6.15 per cubic meter.
Constitution Mining CEO, Dr. Michael Stocker stated, "Based on
these results, pilot scale mining the above channels at a rate of 2,000
cubic meters per day appears to be feasible and justifiable."
In late August, MTI Holland/IHC Merwede is sending a senior consultant
to visit Constitution's technical team in Lima, Peru to work on structuring
a feasibility plan to determine the economic viability of implementing a
pilot dredging and processing operation.
Dr. Stocker continued, "A successful pilot dredging operation could
potentially generate substantial cash flow that can be used to offset the
future costs associated with furthering the development of both
Constitution's Gold Sands project and the gold assets in Nevada it has
proposed to acquire from Seabridge Gold (SA: NYSE.AMEX)."
About The Phase II, 100-Hole Drill Program
On April 8, 2010, Constitution Mining initiated a 100-hole drill program
designed to define a measureable quantity of gold resources within a
targeted zone on CMIN's 461 square kilometer (178 square mile) Gold Sands
project and determine whether the gold that has been found to exist within
this targeted zone is of sufficient quantity to support commercial
production.
CMIN deployed 4 Banka drills which are currently drilling for 16-hours
per day. Each drill is operated by 2 teams, each comprised of 8 laborers
and 1 supervisor. More than 80 local area residents are now working on the
project, including field geologists and laboratory personnel. Additionally,
CMIN's churn drill is used selectively to drill holes to depths of up to 30
meters (98 feet), where deeper channels are believed to exist.
The Phase II 100-hole program consists of definition drilling a 2.5
square kilometer area that is situated over a large paleo channel
identified during the 26-hole property-wide Phase I exploratory program.
The drilling is being done on a grid of 4 lines, spaced 250 meters apart
with holes on each line spaced at 100 meter intervals. The depth of the
Banka holes is up to 12 meters (40 feet). Infill drilling is also being
conducted, which is designed to follow the discovery channels and continue
to expand on the mineralized zones.
Sampling Methods
Drill samples 0.50 meter in length are processed at the drill site to
support two compatible quality data bases. Each sample is screened, and the
+4 mm fraction is analyzed for detailed sedimentological and lithological
information, which is recorded in both graphical and columnar format. This
detailed information enables the site geologist to define the stratigraphic
levels encountered in the drilling, which aids in optimizing drill hole
interpretation. Such information would be an important guide to value
control during any dredging operation.
The second sample processing step is gravity concentration of the sand
fraction. A wooden batea is operated by a trained native panner to process
the sand fraction. The resulting individual gold grains are counted, and
the total for the specific interval is noted in the related drill log.
Approximately 95% of all drill intervals analyzed so far contain some
gold mineralization. Upwards of 672mg/cubic meter of gold was encountered
in one drill sample (HBD-50). The higher gold values correlate with both
increased grain weight and concentration, which also coincides with high
quartz pebble percentages. Drill site procedures use an individual grain
weight average of 0.010mg for field value estimates.
Gold morphology measurements, using Corey Shape Factor determinations,
range from 0.01 to 0.33. The untarnished nature of the gold grains renders
laboratory amalgamation direct and complete. Drill hole logging records #4
colors, which would indicate a gold size in the 100 to 200 mesh range.
Larger gold grains have been logged in some drill samples.
Constitution Mining's VP of Exploration, Gary Artmont, evaluated today's
news. "During my 33-year mining career, I have served as Chief
Geologist for some of the world's largest and most successful mining
companies, such as Freeport-McMoRan. While with Freeport, I oversaw the
successful drilling of more than 120,000 meters in 17 different prospect
areas that led to the discovery of more than 8 million ounces of gold. I
believe what we are dealing with at our Gold Sands project has similar -
perhaps even greater - potential."
About IHC Merwede Group
IHC companies have been involved in the design and fabrication of dredge
mining equipment since the end of the 19th century. Most of this equipment
is used in dredge mining projects all around the world, thus generating a
great deal of in-house knowledge and furthering technical development.
Beyond their important innovations such as like the dredging wheel,
dredge mining automation systems, submerged pumping technology and track
chain bucket ladder systems, IHC Merwede is constantly trying to improve on
its state-of-the-art designs for dredge mining systems.
For more information about IHC Merwede, visit http://www.ihcmerwede.com/dredging-mining.
About Constitution Mining Corp. (CMIN.OB)
The Company's goal is to locate large-scale commercially viable gold
deposits and continuously increase the amount of gold underlying its
outstanding shares. The Company is interested primarily in geographical
areas that are home to several significant proven gold deposits, including
highly prospective districts likely to hold further large deposits.
Peru
The first and most active project is in the Gold Sands region of Peru -
laid down by eons of alluvial erosion. For millions of years, the waters of
the Santiago and the Maranon rivers have been carving their way through the
gold-rich mountain canyons of the Andes, carrying off vast amounts of gold
and depositing it in the loose gravels and sands - Gold Sands - in the area
the Company now controls.
Results from test holes drilled during CMIN's 26-hole Phase I
exploratory drill program indicate the presence of significant alluvial
gold. The Company is now actively engaged in conducting a Phase II drill
program focused on grid drilling a 2.5 square kilometer region. While the
results from the Phase I drill program and the initial results of the Phase
II, 100-hole drill program are highly favorable, further results are needed
to determine the full feasibility of the project.
The full implementation of these programs will require the Company to
secure additional financing.
Nevada
On April 1st, 2010 CMIN executed a definitive and binding Asset Purchase
Agreement with Seabridge Gold Inc. to acquire 30 Nevada-based gold projects
comprised of 2,141 claims, primarily located in the heart of Nevada's
prolific Walker Lane gold belt.
The most advanced project in the 30-property package of mineral claims
the Company is seeking to acquire is the Castle Black Rock gold project in
Esmeralda county, which has an NI-43-101-compliant gold resource of 215,000
ounces in the measured and indicated categories (12.38 million tonnes
grading 0.54 gram of gold per tonne) and 93,000 ounces in the inferred
category (7.95 million tonnes grading 0.37 gram of gold per tonne). For
further information about the Nevada gold resources, click here: http://www.seabridgegold.net/resources.php.
The closing of the Agreement, which is anticipated to occur on or before
September 30th, 2010, is subject to certain conditions, including, but not
limited to: (1) Seabridge obtaining certain authorizations, approvals and
consents necessary to transfer the assets to the Company; (2) the accuracy
of the parties' representations and warranties; and (3) material
performance of all of the agreements and obligations of the parties.
Further information about Constitution Mining Corp may be found at: http://www.ConstitutionMining.com.
On behalf of the Board:
Dr. Michael Stocker - CEO
Constitution Mining Corp. (CMIN.OB)
Investor Inquiries:
Toll Free: 888-906-5656
Direct Dial: +41 (0) 71 791 0080
Email: Info@ConstitutionMining.com
Disclaimer: This release contains
forward-looking statements that are based on beliefs of Constitution Mining
Corp. management and reflect Constitution Mining Corp's current
expectations as contemplated under section 27A of the Securities Act of
1933, as amended, and section 21E of the Securities and Exchange Act of
1934, as amended. When we use in this release, the words
"estimate," "project," "believe,"
"anticipate," "intend," "expect,"
"plan," "predict," "may," "should,"
"will," "can," the negative of these words , or such
other variations thereon, or comparable terminology, are all intended to
identify forward looking statements. Such statements reflect the current
views of Constitution Mining Corp. with respect to future events based on
currently available information and are subject to numerous assumptions,
risks and uncertainties, including but not limited to, risks and
uncertainties pertaining to development of mining properties, changes in
economic conditions and other risks, uncertainties and factors, which may
cause the actual results, performance , or achievement expressed or implied
by such forward looking statements to differ materially from the forward
looking statements. The information contained in this press release is
historical in nature, has not been updated, and is current only to the date
shown in this press release. This information may no longer be accurate and
therefore you should not rely on the information contained in this press
release. Constitution Mining Corp. cautions that it has not verified or
confirmed the accuracy of the gold resource estimate concerning the Castle
Black Rock gold project in Esmeralda county that was prepared at the
direction of Seabridge in October 2000.To the extent permitted by law,
Constitution Mining Corp. and its employees, agents and consultants exclude
all liability for any loss or damage arising from the use of, or reliance
on, any such information, whether or not caused by any negligent act or
omission.
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