Linear Metals expands Cobre Grande

Using assays from the last two reverse- circulation holes on its Cobre Grande copper project in Mexico, Linear Metals (LRM-t) has extended the El Oso mineralized zone to a strike length of 300 metres. El Oso is 500 metres west of the main zone, which has been drilled along a 1.6-km strike.

The Cobre Grande project is located in Oaxaca state, 60 km southeast of the city of Oaxaca and 190 km northeast of the Pacific port of Salina Cruz. The project is accessed on a 56-km highway (federal highway 190) from the city of Oaxaca, followed by a 6-km gravel road and a 6-km dirt road. The nearest town is San Baltazar de Guelavila, a distance of 6 km.

Of the latest results, hole 18 returned 132 metres (not true width) of 0.84% copper, 0.031% molybdenum, and 13 grams silver per tonne, or a copper equivalent of 1.12%, starting at a depth of 28 metres, including 40 metres of 1.43% copper.

Hole 19 returned an 18-metre interval starting at 40 metres depth grading 0.5% copper, 0.015% moly, and 11 grams silver, and a second 52-metre interval at 80 metres of 0.57% copper, 0.063% moly, and 16 grams silver, or a copper equivalent of 1.08%. The latter interval included a 4-metre portion grading 3% copper, 7.7% zinc, 0.031% moly and 63 grams silver.

Typical zinc grades in the two holes are 0.09% to 0.93%.

The same drill program included 10 holes to test geophysical and geochemical anomalies north and west of El Oso. The highlight was hole 23, which cut 30 metres of 1.1% zinc.

So far, Linear Metals has released assays of 11 holes in El Oso, nine of which have cut mineralization. El Oso’s discovery hole, no. 68, returned 228 metres (not true width), starting at a depth of 29 metres, and grading 0.62% copper, 0.07% zinc, 0.034% moly and 10 grams silver per tonne, or a copper equivalent of 0.91%.

The longest molybdenum intersection on the property was seen in hole 60,which returned 332 metres of 0.058% molybdenum starting at a depth of 4 metres.

Linear Metals has released a National Instrument 43-101-compliant inferred resource for the main zone at Cobre Grande (excluding El Oso) of 50 million tonnes at 0.5% copper, 0.04% moly, 0.22% zinc and 13 grams silver, equivalent to 0.92% copper. This translates to 545 million lbs. copper, 44 million lbs. moly, 243 million lbs. zinc and 21 million oz. silver.

Geologically, the Cobre Grande area is a structural window of altered and weathered Cretaceous sedimentary rocks flanked to the north and south by Tertiary volcanic rocks.

The main skarn zone is characterized by well-defined copper-molybdenum- zinc mineralization with silver occurring with both the copper and zinc. It’s oriented north-south, extends over a distance of 1.6 km and is up to 250 metres wide and 200 metres thick.

The mineralization types are well sorted from west to east as molybdenum sulphide stockwork, copper sulpide skarn, and zinc sulphide skarn.

Surface oxidization locally results in copper oxide mineralization, partially oxidized molybdenum mineralization, and chalcocite- enriched partially oxidized copper mineralization.

Linear Metals has completed metallurgical test work, with recoveries from copper sulphide skarn at 95% for copper and 83% for silver. Molybdenum recovery from molybdenum sulphide stockwork was 90%.

Linear Metals has an option to buy 80% of the Cobre Grande property. In March 2004, Linear Gold (LRR-t), a related company, acquired a five-year option to buy a 100% interest in Cobre Grande by making a series of cash payments to the community of San Baltazar Guelavila and spending US$420,000 on exploration.

The purchase option entitles the holder to buy Cobre Grande in exchange for either US$12 million in cash, a 2% net smelter return royalty or a 15% carried joint-venture interest in the project, subject to the community’s decision.

In 2006, before being spun out from Linear Gold as a distribution-in- kind to shareholders of Linear Gold, Linear Metals was granted an 80% interest in the Cobre Grande option in exchange for making all remaining option payments due to the community of San Baltazar Guelavila and incurring all remaining expenditure commitments. Linear Metals may also elect to buy the remaining 20% for $1.2 million at any time before 2009. If it elects not to purchase the remaining 20% interest, an 80/20 joint venture will be formed between Linear Metals and Linear Gold, with Linear Metals acting as operator.

Linear Metals’ other flagship project is the KM61 molybdenum property in northwestern Ontario, where a resource estimate is due in the fourth quarter. On July 31, the company’s net current assets (current assets less current liabilities) stood at $3.8 million, and it had 46.4 million shares fully diluted.