Nov 19 2010
Crown Gold Corporation (TSX VENTURE:CWM) has announced it has entered into a Memorandum of Understanding with American Mining Corporation, a private Nevada corporation, along with Versatech Capital for Mining, a private Nevada corporation, to provide processing at AMC's facility in the vicinity of Crown's flagship Monte Cristo property, near Tonopah, NV.
The MOU also applies to Crown's other Nevada properties, including Sugarloaf Peak.
The McLean Lode deposit at Monte Cristo, located approximately 45 km north of Silver Peak in Esmeralda County, is a high grade gold and silver epithermal vein system, the top of which was mined by open pit in the 1980's. Crown's drilling beneath the old pit has extended the mineralization to a vertical depth of approximately 300 m with every indication that it is open along strike and further down dip. Crown's exploration work has so far delineated a NI 43-101 compliant inferred resource estimate of 1,025,700 tonnes grading 7.2 g/t gold at a 2 g/t gold cut off. Silver grades, as high as 1500 g/t, were intersected in core holes but a silver resource cannot be quantified because samples from extensive shallow drilling prior to Crown's work were never assayed for silver.
The McLean Lode has many geological similarities to individual orebodies of the Comstock Lode and the Monte Cristo claim block covers a major through going fault zone in an andesite volcanic sequence that, as a whole, displays remarkable similarities. The Comstock orebodies produced approximately 8 million ounces of gold and 200 million ounces of silver from many separate ore shoots. The McLean system covers approximately twice the strike length of the Comstock host structure.
AMC & VCM's processing facility at the 16 to 1 mine site near Silver Peak, offer companies with high grade precious metals deposits an opportunity to extract ore that might normally be years from cash flow. By utilizing the Silver Peak facilities, Monte Cristo's high grade ores can be successfully processed by shipping it to AMC's, "minimal disturbance mining, hub and spoke" Silver Peak ore processing operation.
There are many advantages for such a facility and for the success of this MOU. Crown can now concentrate on Monte Cristo's immediate underground development and further delineation of their resource without the necessity of onsite ore processing with its attendant capital and permitting requirements. With minor transportation costs and modest fees for processing, Monte Cristo can benefit from the positive effects of extraction accompanied by immediate processing at optimum recoveries.
Crown Gold, formed by the recent amalgamation of Crown Minerals and Gold Summit, is exploring for high grade gold and silver deposits in Nevada and high grade gold deposits in both Nevada and Ontario. In Nevada, Crown has NI 43-101 compliant inferred resources totalling approximately 337,000 ounces of gold at its Monte Cristo and Sugarloaf. These are the most advanced of five, high-grade, epithermal vein systems controlled by the company. The existing resources at Monte Cristo and Sugarloaf remain open along strike and at depth. Planning for further exploration and underground or open-pit development is underway. The three other Nevada properties, Blue Sphinx, Gold Springs and Black Warrior, all contain well-defined, essentially undrilled, targets.
Yesterday Crown reported encouraging assay results yesterday from drilling on its McKenzie Island property at Red Lake. Crown is planning additional drilling on the McKenzie Island project in the first quarter of 2011. Other northwest Ontario properties are Tabour Lake near Kenora and Surprise Lake in the Uchi Belt, east of Red Lake. At Tabour Lake, sampling and previous drilling at the old Sakoose Mine confirm that extension of previously mined grades of 14 g/t gold are present down plunge and open at depth. In northeastern Ontario, the company holds strategic land positions adjacent to Trelawney's Chester discovery, at the old Stairs Mine and in the Timmins camp.