Southern Rio gains BC foothold (November 16, 2001)

Shifting its focus from South America to precious metal properties in Canada, Vancouver-based Southern Rio Resources (SNZ-V) has inked a deal to acquire privately held Kleinebar Resources’ Duke copper property, 30 km west of Merritt BC.

Under the agreement, Southern Rio can acquire a 100% interest, subject to a 1% net smelter return royalty payable to Kleinebar, by paying $5,400 in cash and issuing 50,000 shares at a deemed price of 10 per share. The deal is subject to regulatory approval.

The 0.5-sq.-km property covers an outcropping copper occurrence hosted by quartz-feldspar porphyry and mafic volcanic rocks. A dozen holes in the 1960s returned several shallow intersections, including 0.55% copper over 51.8 metres, 0.63% copper over 57.9 metres and 0.61% copper over 33.5 metres. The core was not assayed for molybdenum or gold.

Subject to securing financing, a program of magnetic and induced polarization surveying is planned to define drill targets on the property, which is mostly covered by glacial material or younger volcanic rocks.

In late October, Southern Rio agreed to buy Kleinebar’s Tam property in central BC. Rio can acquire a 100% interest in the property, subject to a 1% NSR royalty, by paying $4,700 in cash and issuing 10,000 shares.

The 3.5-sq.-km property, situated 120 km southwest of Vanderhoof, BC, covers several outcropping epithermal quartz vein systems discovered in 1994 following initial work by the BC Geological Survey in 1993. Surface prospecting yielded up to 19.2 grams gold and more than 100 grams silver from quartz vein outcrops and float. Results from nine holes by Phelps Dodge (PD-N) in 1996 on two of the veins were highlighted by 22 metres (estimated true width 6.5 metres) running 8.9 grams gold and 394 grams silver from the Ted vein. The holes were the last on the property and several other surface vein occurrences remain un-drilled.

The property is located immediately east of Teck Cominco‘s (TEK-T) Tsacha property, where a number of similar veins occur. Drilling on one of these, the Tommy vein, has defined a resource of 478,600 tonnes grading 8.7 grams gold and 82 grams silver.

Rio plans a program of prospecting, ground geophysics and follow-up drilling for the coming summer season.