Vancouver-based junior
In February 1999, Far West signed an option agreement with
To earn its interest, Far West is required to:
– spend US$5.5 million on exploration over three years;
– issue 1 million Far West shares to Aztec Silver; and
– make a US$500,000 cash payment.
Geochemical surveying at the Lobo 14b property has indicated the presence of several base and precious metal anomalies associated with buried intrusive rock and major structures. Three of these targets — San Vicente, Carmen and San Antonio — will be tested over the coming months.
The joint-venture partners have budgeted US$1.2 million for exploration up to July 31, 2000. Work will include 4,800 line km of airborne magnetic and radiometric surveying, magnetotelluric and geochemical surveying and up to 10,000 metres of drilling.
Last year, the partners spent $1 million on the nine properties, including 14,500 line km of magnetic-radiometric surveying over portions of eight properties and 400 line km of airborne magnetic-electromagnetic surveying over the remaining property. In total, the airborne surveying covered only 20% of the land holding.
Based on those data, the partners selected 54 targets for follow-up geochemical testing in areas believed to host buried Tertiary intrusives. The work returned 27 silver/base-metal anomalies, eight of which were followed up with gradient and pole-dipole geophysical surveys.
Late last year, 1,200 metres of drilling were completed on two targets at Lobo 10. However, the holes did not reach the potential host rocks, owing to block faulting. Further drill testing is planned for Lobo 10 at a later date.
In early March 2000, Far West completed a $1.7-million financing with a private investor. The funds will be used to explore the Zacatecas silver and base metal project.
Pursuant to this financing, the private investor acquired 2 million Far West units priced at 85 apiece. Each unit comprises one share and one warrant, with each warrant exercisable into one share at $1.50 for the first year after closing and $2 for the second year after closing.
For its part, Aztec Silver holds 13 properties in Zacatecas and San Luis Potosi states: the nine under option to Far West; two optioned to
The total option commitments of the three joint ventures exceed US$14.5 million in cash payments, share purchases and exploration expenditures over three years. Aztec manages the joint ventures for Far West and Mill City.
Noranda is to begin a drilling program on the Lobo 6 and Lobo 8 properties during the second quarter of 2000. The program will test four large but weak induced-polarization/resistivity geophysical anomalies in areas covered by thin desert pediment.
Noranda can earn a 51% interest from Aztec in either property by making certain cash payments or investments and by spending US$1.6 million on exploration. Noranda can boost its stake to 70% in either property by delivering a bankable feasibility study.
Aztec Silver has filed a preliminary prospectus, which is under review by the British Columbia Securities Commission and the Canadian Venture Exchange.
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