Tuesday, August 14, 2007
A Message from the President
This past year has proved to be a defining period in the brief history of Marifil Mines Ltd., a time during which the strength of our joint-venture focused business model has been clearly demonstrated and our asset base has been measurably increased. These two accomplishments - both of which we continue to advance - represent our company's commitment to "Building Value in Argentina" for our shareholders.
Marifil's "Joint Venture Model" strategy to increase shareholder value is based upon identifying new projects with good exploration potential, acquiring them cheaply, leveraging our local and international exploration experience to improve them, and then bringing in well funded partners to finance development. As at this writing, the Company has joint-venture agreements on three of its properties, and we are in discussions with a number of other potential partners.
The Company remains committed to concentrating its efforts in Argentina, a country as prospective as Nevada was 100 years ago, but which Marifil is approaching with modern exploration techniques. While there is some anti-mining sentiment in a few areas, most of the country remains very "mine friendly".
JOINT VENTURES
Las Aguilas Project:
Castillian Resources Corporation ("Castillian") may earn up to 65% in the "Las Aguilas" property, a 3,359-hectare copper-nickel-PGM property that is a part of Marifil's 58,150 hectare San Luis Nickel-Copper-Platinum Project. Castillian has put this project on a fast track to establish proven ore reserves and on July 2 began a 6,000 meter drilling program.
San Luis Project:
Under a separate agreement, Castillian may also earn up to a 65% interest in Marifil's "San Luis" belt in San Luis province and has recently launched a C$3.4 million exploration campaign on this 54,791-hectare nickel-copper-PGM ("platinum group metals") property located along a prospective belt of layered ultramafic rocks believed to be highly prospective for PGM's, particularly platinum.
Amarillo Project:
ATW Venture Corp. ("ATW") may earn up to a 70% interest in our "Amarillo" gold-copper-silver property, located in San Juan province within the Veladero-El Indio gold belt on the Argentine side of the Andes. This belt is rapidly attracting major mining companies investing substantial funds exploring for world class gold deposits. The belt has already revealed several discoveries, including Barrick Gold's two deposits lying to the north of Amarillo, Veladero (12.6 million ounce gold reserve) and Pascua Llama
(18.3 million ounces of gold), as well as the very high grade El Indio copper-gold mine.
Key Marifil Projects
Marifil continues to focus on advancing a few key projects of our own; at the same time we are looking for additional opportunities to add to our strong project portfolio that now includes 34 properties covering more than 395,000 hectares of exploration land prospective for precious and base metals in 14 Argentine provinces.
San Roque Project:
Management is convinced we have discovered a major base metal system at San Roque. In recent months, the Company has been aggressively advancing our 12,700 hectare San Roque project, where we have completed a 28-Diamond drill hole (DDH) program that intercepted high-grade Indium (In), Zinc (Zn), Silver (Ag) and Gold (Au), along with other base metals, particularly Lead (Pb). This includes 5.1 meters of 2.61 g/t Au; 24 g/t Ag; and, 30.4 g/t In in DDH 11 and 0.75 meters of 2.05 g/t Au; 0.22 % Pb; 0.32% Zn; and, 448 g/t In. in DDH 7 and 117 m of 0.95% Zn in DDH 4.
The Company is carrying out an extensive examination and compilation of all existing data and is re-interpreting this information in the light of the bulk tonnage base metal potential. Strong mineralization has been found within a structural corridor at least 10 kms wide and 20 kms long, which has yielded surface samples as high as 1.5% Indium.
Indium is currently selling for about US$850 per kilogram (US$386/lb) or about twice the price of silver and three times that of uranium. Indium is a little known mineral, almost 50% of whose production is used for thin-film coatings to make electronic devices such as thin-film solar panels and liquid crystal displays (LCDs), screens that transform electricity into light energy (i.e. television screens and computer monitors). It is also used for making semiconductors, high speed transistors, specialized solders and other specialized alloys.
Toruel Project:
The Company is also continuing to examine our wholly-owned Toruel epithermal Silver-Gold-Copper Project in Rio Negro Province where we have identified several large mineralized veins and ore shoots. Potential Joint Venture discussions on this project are progressing.
The table below sets out descriptions of many of our properties and their current status.
In addition to the important steps we have taken to advance our business through joint-ventures, project development and acquisitions, the Company has also strengthened its exploration team, particularly with the addition of Pedro R. Vera, formerly Senior Geologist with Barrick Exploration Argentina-Chile, who has joined us as Senior Geologist and Project Coordinator. Mr. Vera, who was born and lives in Argentina, has been a geologist for 20 years, including the last 15 years specializing in exploration working for numerous global public mining and exploration companies. One of the most widely known and respected exploration geologists in the country, he has worked all of the major geologic provinces in Argentina.
Marifil's share price and trading volumes have continued to appreciate and our ongoing marketing efforts to institution and retail investors as well as market newsletter writers are paying off as still more investors recognize the Company and its growing potential. Still, our market capitalization remains low relative to other public exploration companies, despite the unparalleled size and prospectivity of our asset portfolio and business partnerships. We are endeavoring to further build shareholder awareness and support a strengthening of our share price.
In summary and as our loyal shareholders are aware, our business plan is quite straight forward - identifying, acquiring and advancing good properties in preparation for longer term financing and development by joint-venture partners. Since our inception just two years ago, we have successfully executed this plan many times over. During the past year, we were still more successful than during our first year. Looking ahead, we expect that the coming twelve months will show even greater evidence of our value, one which we believe will better reflect the results our investors expect.
On behalf of Marifil's Board and Management, we would like to thank our employees, including the rest of our highly skilled and experience board and management team, as well as our loyal investors, for their support.
John B. Hite,
President & CEO
| Richard R. Walters,
Executive Vice President |
MARIFIL MINES: PROJECT STATUS
| PROJECT |
PROVINCE |
TARGET |
COMMENTS |
BUSINESS / WORK PLAN |
HECTARES |
| San Luis |
San Luis |
Nickel-Copper-PGM in Layered Ultramafic Complex |
Targeting nickel-copper-PGM (“platinum group metals”) mineralization along a prospective belt of layered ultramafic rocks believed to be highly prospective for PGM’s, particularly platinum. |
Farmed out to Castillian Resources, which is conducting a $3.4 million exploration / drilling program on the property. |
54,791 |
| Las Aguilas |
San Luis |
Nickel-Copper-PGM in Layered Ultramafic Complex |
The ore targets include the Las Aguilas mine containing an historic ore reserve of 2.2 million tonnes grading 0.52% Ni, 0.50% Cu, 0.037% Co, and about 0.4 g/t PGE’s (about 90% of PGM’s are Pt). The layered ultramafic complex is perhaps ten kms wide and more than 100 km in length. Ore targets include massive sulfide deposits of Cu-Ni-Co and layered belts of PGE minerals. |
Farmed out to Castillian Resources. |
3,359 |
| Amarillo |
San Juan |
Epithermal Gold and Porphyry Copper-Gold |
Ore targets include bonanza grade Gold and Copper-Gold porphyries in Late Tertiary intrusive rocks. The target area includes nearly 30 square kilometers of alteration in the Veladero-El Indio gold belt. This is a high Andes project but does have road access. |
Farmed out to ATW. |
4,706 |
| San Roque |
Rio Negro |
Epithermal Gold-Silver |
Ore targets are bulk tonnage , open-pittable zinc and lead with significant credits in Indium, Gold, and Silver in Jurassic volcanics. |
We are currently re-interpreting all prior data in the light of then new target concepts |
12,700 |
| Toruel |
Rio Negro |
Silver-Gold-Copper in Epithermal Breccias |
The ore targets are large epithermal veins and breccias hosted in Jurassic volcanics. The veins and breccias contain silver-copper-gold plus lead and zinc. Some of the drill intercepts contain bonanza grades exceeding 1,000 g/t silver and 5% copper. Veins and breccias occur across a belt more than 2 km wide and more than 8 km in length. The Company has drilled 63 holes and is now calculating preliminary reserves. |
We expect to farm this property out to a joint venture partner in the coming months. |
34,921 |
| Los Menucos |
Rio Negro |
Epithermal Gold-Silver deposits in Jurassic Volcanics |
Ore targets include high grade gold-silver in veins and bulk tonnage disseminated gold silver deposits. The project area also includes a possible disseminated bulk tonnage molybdenum deposit. |
We expect to farm this property out in the coming months. |
35,342 |
| Tembrao |
Rio Negro |
Epithermal Gold-Silver |
The ore targets are large epithermal quartz and quartz-sulfide veins containing gold and silver. Recent sampling returns up to 700 g/t silver across a 2.5 m wide vein as well as disseminated gold in a silicified flow dome. Recent prospecting reveals visible gold in wallrocks. |
We plan to carry out additional trenching in the coming months. |
6,000 |
| APG |
Chubut |
Epithermal Gold-Silver |
Ore targets are high grade epithermal gold in silicified rhyolite dikes and quartz vein stockworks adjacent to the dikes. Land applications submitted and pending. |
Field work is planned for2008. |
12,320 |
| Punta Colorado (Sierra Grande) |
Rio Negro |
Cement grade limestone |
The ore target is a 100 to 200 million ton limestone deposit. The beds are flat-lying and some are of cement grade. The deposit is located adjacent to a deep water bulk loading Terminal with ample supplies of water, electricity, gas, and roads. |
We are awaiting approval of the contract by the Provincial Government and for settlement of certain title questions including trading up to 100 hectares to the government for a duty-free port in return for reduced rates to use the loading dock. |
6,760 |
| Araucana |
Mendoza |
Porphyry Molybdenum |
The ore target is a “Climax” type bulk tonnage molybdenum deposit containing significant amounts of tin and tungsten |
This is a grass roots project with mapping planned for 2008 |
500 |
| Alto Chubut |
Rio Negro |
Gold (Copper?) in Jurassic Volcanics |
The property covers a very large color anomaly with associated gold anomalies in stream sediments |
This is a grass roots project with exploration planned for 2008. |
9,300 |
| Esperanza |
Neuquen |
Copper-Silver and Uranium in Cretaceous Sandstones |
The ore targets are “roll front” type disseminated copper-silver deposits in gently dipping Cretaceous age sandstones. These sandstones are believed to contain roll front U deposits. |
We are looking for a farm out partner |
27,000 |
| Valle Daza |
La Pampa |
Ni-Cu-PGE in layered ultramafic complex |
The ore targets are Ni-Cu-PGE’s in a Paleozoic layered ultramafic complex. The target was discovered by analysis of airborne geophysical anomalies. The area may have an access problem. |
We expect to farm this project out within the next few months (see San Luis Project). |
28,000 |
| Maipu |
Santa Cruz |
Silver- Zinc in Jurassic Breccia |
The ore target is a large Silver/Zinc bearing breccia occurring along the margin of an altered Jurassic porphyry. The breccia is well exposed in a canyon and measures 70 to 90 m wide, more than 500 m vertically, and has a possible strike length in excess of 2,500 m. |
Exploration is planned for late 2008. This could be a huge Ag deposit; perhaps more than 100 m ounces of Ag. |
3,000 |
| Ferrocarillera (Minas Lago Fontana) |
Chubut |
Epithermal Gold-Silver-Base Metals |
The ore targets are high grade gold-silver-base metals epithermal veins in Jurassic volcanics. The project has been optioned to Apex Silver Corp. and Marifil retains a 30% carried interest through to production. |
We plan more work in the coming field season. |
17,498 |
| Carmen Hydrocarbon |
Chubut |
Oil and Gas target |
The ore targets are Oil and Gas in Cretaceous Sediments; primarily a Glauconite Horizon of a Sub-basin to the San George Basin. |
Producing wells are located nearby but we do not plan to spend money on this project. |
2,001 |
| 18 Other Properties |
Various |
various |
|
|
136,431 |
| TOTAL |
|
|
|
|
394,629 |
|