La Cobriza PROPERTY (Mexico)
A Gold – Silver Past Producer with Blue Sky Upside
The La Cobriza Gold and Silver Property, located 125 kilometers Northeast of Mazatlan and 150 km West Northwest of Durango City, Durango Mexico, adjoins the Tayoltita mine of Primero Mining Corp. A satellite portion of the property, the Temehuaya Concession, lies 25 kilometers to the East.
LA COBRIZA PROJECT HIGHLIGHTS
- La Cobriza lies in the centre of the rich historical San Dimas mining district where high-grade gold-silver veins were discovered around 1757 (Dahlgren, 1882). The district has produced 9.5 million ounces of gold and 750 million ounces of silver (Megaw 2004).
- High-grade gold-silver low sulphidation epithermal veins, intermittently mined on the Cobriza property will be the primary exploration focus.
- The five concessions total 854 hectares. Four mineral structures occur within the Cobriza group, and five within the Temehuaya concession.
- A 40-tonne-per-day flotation mill, previously operational, lies 1,000 metres from the mine.
- The flotation plant occupies one hectare of privately owned land. An option may be exercised in 2018 to purchase a total of 280 hectares including the aforementioned one hectare. The plant site was chosen because beneficiation activities have always existed on-site since early last century. This plant pre-existed the 1985 change in the mining law, is thus classified as an old plant, and is “grandfathered”. Under the old regulations a final permit may be more easily achieved.
- Of the four Temehuaya area quartz veins and quartz veinlet stringer zones, two are three to five m wide, and one reportedly reaches eight m. Legerman (1976) reported samples up to 2.6 g/t Au, 323 g/t Ag, 0.76 per cent zinc and 2 per cent copper. These veins are comparable to Tayoltita, and San Dimas district-style veins and represent current exploration targets as the Temehuaya area is undeveloped, possibly because infrastructure is poor.
Cobriza, an old Spanish mine, has undergone extensive work in both the early 1800s and the 20th century. More recently, it has been explored, but has also seen occasional production since 2006. The properties have not been explored systematically with modern methods such as diamond drilling. In 2006, the Mexican government financed ($40,000 (U.S.)) for a small study on the Cobriza area which suggested 12,000 tons with grades of 1.5 g/t Au and 622 g/t Ag. The reader is cautioned that these values have not been confirmed and therefore cannot be relied upon. Resampling under the currently anticipated exploration program will be necessary to confirm any tonnage or grade on the Cobriza target.
The first modern studies conducted on the mine were undertaken by Olagaray and Madero, who suggested a substantial tonnage potential. Multiple reports have since been written on the Project including Buen Paso 1996, FIFOMI, COREMI, Megaw (2004) and Sookochoff (2007).
TERMS OF AGREEMENT
HAWKEYE Gold & Diamond Inc. entered into a Letter of Intent (LOI) with a third party independent vendor whereby it may earn a 50-per-cent interest in the La Cobriza Project by paying $4.5-million to the vendor over two years. The LOI provides for a 45-day due-diligence period (DDP) allowing completion of a site visit and evaluation of the property. Due-diligence will include a detailed mapping and sampling exercise, a review of the processing plant, and an analysis of the cost of rehabilitating the plant. This work is expected to take three months. Upon HAWKEYE electing to move forward with the property after the DDP, the terms and conditions of the LOI will be incorporated into a definitive option purchase agreement (DOPA) subject to TSX Venture Exchange approval. Upon the expenditure of $600,000, the company will secure the right to earn 50 per cent of net cash flow from the project. When HGO earns its 50-per-cent interest, the DOPA will transition into a standard mining JV agreement between the parties.
LA COBRIZA PROJECT (MEXICO) A Gold, Silver Past Producer Project with Blue Sky Upside