War Eagle cuts wide high-grade zinc at Tres Marias (October 31, 2007)

Vancouver – It looks like past mine operators left behind some pretty decent rock at War Eagle Mining Company‘s (WAR-V, WARGF-O) Tres Marias zinc-germanium project in Mexico’s Chihuahua State.

Underground drilling has tied into high-grade mineralization – returning up to 15.1 metres (from the drill collar) grading 31.25% zinc and 100 grams germanium per tonne in hole TE-40. Drilled from the 6.5-level, the hole included additional mineralized intercepts of 4.5 metres averaging 33.4% zinc and a half-metre of 35.3% zinc.

Other strongly mineralized intercepts include 3.9 metres in hole TE-45 averaging 37.7% zinc and 226 grams germanium.

An average grade of 18.8% zinc and 75 grams germanium is tabled for mineralized sections in the reported batch of 23 underground drill holes – using a 5% zinc and 50 gram germanium cut-off grade.

War Eagle is through almost two-thirds of a 90-hole drill program budgeted at about $10 million.

The company notes that while zinc grades tend to remain similar in sulphide, silicate and oxide material – germanium values are generally higher in sulphide mineralized zones.

Tres Marias is a former high-grade zinc and germanium mine first put into production in the late-1940s and operated until the early-1990s. It produced about 125,000 tonnes of high-grade oxide and sulphide zinc-lead-germanium ore reported to average about 20% zinc and 300 grams germanium.

Despite still being in ore, mining ceased in 1992 when the smelter it used became unable to continue processing the raw ore.

War Eagle is compiling data for a resource estimate from its definition drilling and underground sampling programs. It looks to delineate about a half-million tonnes of mineralized material in order to recommence operations in 2008.

A mine development application is underway looking to permit a roughly 3-by-4.5-metre two compartment shaft sunk to about 150 metres depth, below the existing 7th level of the past workings.

Mineralization at Tres Marias is associated with a low-temperature style of Mississippi Valley-type geology. Zinc, lead and germanium were 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 formation of breccia bodies, collapse zones and deposition of sphalerite (also containing germanium), galena, iron sulphides and gypsum.

Collapse structures provide an identifiable surface expression usable as an exploration tool. Aerial examination of the Tres Marias area shows dozens of such structures, or depressions, within a 9-km by 2-km zone giving the company additional targets.

Primarily a byproduct of sulphide zinc mining, germanium is a hard grayish-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 is robust with sustained growth in infrared security products, silicon-germanium based wireless telecommunications networks and usage in manufacturing of light emitting diodes. Germanium’s market price has risen from the US$250 per kg level in 2003 to a recent price of about US$1,250 per kg.

Shares of War Eagle closed up 22% on the high-grade assays, closing up 10.5 to 59 apiece in October 31st trading. The stock has a 52-week trading range of 46-89.