Vancouver — Underground sampling by
Extensive channel sampling recently yielded significant zinc and germanium values across long, continual lengths in the past-producing workings. A total of 160 samples, each 1.5-metres long horizontally, averaged 17% zinc and 96 grams germanium per tonne. Samples were taken around the external periphery of stopes and pillars in accessible portions of level 6.5 and portions of level 6 that were mined by Zinc Nacional de Mexico.
The Tres Marias mine operated from 1952 to 1992, and reportedly produced about 125,000 tonnes of high-grade oxide and sulphide zinc-lead-germanium ore. Besides Zinc Nacional’s main operations from 1987 to 1992, Eagle Picher Mining also worked the project from 1952 to 1963. The average grade of mined material was 20% zinc and 300 grams germanium.
War Eagle’s review of the underground workings shows them in good condition and readily accessible. The company estimates about 500,000 tonnes of zinc-lead-germanium mineralized breccia is situated within 300 metres of the existing Tres Marias mineshaft.
Tres Marias mineralization is associated with a low-temperature style of Mississippi Valley-type geology. The zinc-lead-germanium has been deposited into Cretaceous-aged Santa Elena limestones, which included reef formations comprised of shells and seawater. Oil field brines containing sulphur, zinc, lead, iron, germanium and hydrocarbons migrated from adjacent basins and mixed with the seawater in the reef zones. Chemical reactions in the mixing brines caused the formation of breccia bodies, collapse zones and deposition of sphalerite (also containing germanium), galena, iron sulphides and gypsum.
The collapse structures provide a readily identifiable surface expression that can be used as an exploration tool. Aerial examination of the Tres Marias area shows over 50 such structures, or depressions, within a 9 by 2-km zone indicating significant potential for additional mineralization.
Drilling has tested a number of these features. Results from a recently concluded 9-hole, 1,500-metre diamond drill program are anticipated by late October.
What is germanium?
Primarily a byproduct of zinc ore, germanium is a hard greyish-white material that is a semi-conductor and has unique optical properties. It is principally used in manufacturing fibre-optic networks and infrared night vision systems, and as a polymerization catalyst.
Demand for the element has surged due to growth in infrared security products and silicon-germanium based wireless telecommunications networks. Germanium’s recent market price has been around US$600 per kg.
War Eagle has been in discussions with Umicore, one of the world’s largest suppliers and marketers of germanium, on the establishment of a long-term supply contract.
War Eagle initially acquired rights to the Tres Marias project in 2001. For a 100% interest, the company is obligated to make cash payments of US$315,000 and for work commitments of US$575,000 over four years. Remaining cash payments of US$225,000 remain outstanding. A 3% net smelter return (NSR) and a 1% net profits interest is held by the vendor (Tombstone Aruba) with an option to repurchase 2.5% of the NSR for US$500,000. An additional 2.5% NSR is held by a private financing group.
The company recently closed a $1-million private placement financing deal to continue mine development and exploration on the project.
War Eagle posts a $9-million market capitalization, given its recent 45-per-share trading level and 20.7 million shares outstanding. The stock has seen a 52-week trading range of 18-52.
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