Excellon parts with portion of Platosa JV

Vancouver-based Excellon Resources (EXN-V) has decided to part with a third of its stake in a joint venture with Apex Silver Mines (SIL-X) for just less than $1.3 million.

Excellon is earning a 51% interest in the 141-sq.-km Platosa and Saltillera properties in west-central Mexico. To do so, it must spend US$2.2 million on exploration by Aug. 1, 2003. So far, the company has spent US$631,000. Excellon is the project operator.

Under the latest proposal, Toronto-based Destorbelle Mines (YDB-V) can pick up a third of Excellon’s eventual stake, or 17% of the two properties, for US$1.3 million. However, Apex retains the right to buy back 2% of the joint venture properties from Excellon for a sum equivalent to 2% of the project’s anticipated value (to a maximum of US$1 million) based on a preliminary feasibility study. Should Apex decide to exercise its option, Destorbelle’s stake would fall to 16.3%.

To maintain its interest, Destorbelle must cover a third of certain future exploration expenses on the properties.

Excellon has just launched an exploration program which includes 6,000 metres of diamond drilling, geophysical and geochemical surveying, mapping and sampling. Once this is completed, Excellon has a 60-day window in which it can require Destorbelle to complete a business combination. If it goes ahead with the combination, Excellon would hold two-thirds of the post-amalgamation company and Destorbelle would have the remaining third. The relative holdings would change slightly on adjustments for assets not related to the joint venture and for liabilities.

Last fall, drilling on the properties confirmed lateral offsets of flat-lying replacement bodies. Hole 30 cut 1.3 metres grading 295.5 grams silver per tonne, 4.1% lead, and 4.1% zinc from a down-hole depth of 146.6 metres, whereas hole 33 returned 16.8 metres averaging 892.7 grams silver, 6.7% lead, 8.4% zinc and 0.12% copper.

Situated in Durango state, the project hosts tabular bodies known as mantos. Three of these were mined locally in the 1970s, and in 1999 Apex drill-tested two more. The style and complexity of the mineralization encountered suggested a large-scale, silver-lead-zinc replacement system. The mantos are hosted by a paleo-channel of dolomitic grainstone in limestone sedimentary debris breccias.

In other news, Excellon has increased to 5.8 million shares a previously announced non-brokered private placement of 5 million shares at 20 per share. The price of the shares will not change.

A portion of the proceeds from both sales will be used to fund US$850,000 worth of exploration and pay off outstanding loans and accounts payable.