Golden Reign Resources Ltd TSXV:GRR announced assays from the San Albino Mine area of its San Albino-Murra gold property in Nueva Segovia, Nicaragua. Results include
85.86 g/t gold and 35.1 g/t silver over 2 metres
(including 171.62 g/t gold and 68.8 g/t silver over 1 metre)
4.48 g/t gold and 12.3 g/t silver over 4 metres
(including 15.08 g/t gold and 24.3 g/t silver over 1 metre)
4.22 g/t gold and 9.1 g/t silver over 1 metre
Golden Reign expects to complete drilling in March 2012 and the NI 43-101 compliant resource calculation in the first half of 2012. The company has three drill rigs turning at the San Albino Mine area.
President/CEO Kim Evans tells ResourceClips.com, “[San Albino-Murra] was owned by an American metallurgist in the early 1920s. He developed the mine there, but the Spanish were the first ones into this particular area back in the 1790s and were reportedly pulling about two-ounce material at surface from this area. The property is a fairly sizeable concession—it’s 87 square kilometres located in the north-central part of Nicaragua. It is a property we’ve been on since about mid-2009 and really have started advancing in the last year. We’ve done a fairly extensive drill program within the last year and are looking to wrap it up in about the end of March or early April. We are looking to complete our maiden resource calculation on a historical mine called the San Albino mine and a prospect called Arras. What we’re really focused on at this particular juncture is a two-square-kilometre area within the 87-square-kilometre property. That is our first target within the project area.
Capex costs are quite low—say $50 million to $100 million only—and it has very nice little cash-cow potential—Kim Evans
“The [assays] are quite spectacular as you can tell. It is rare nowadays for projects to see multi-ounce material as prevalent as this. Nicaragua is virtually untapped because of its history of conflict, but it’s been a stable democracy since the 1990s. I think they’re just starting to emerge as a major area for mining exploration and development.
“It is the safest country by far in Central America,” Evans continues. “It is actually ranked as being much safer than a number of the big US cities such as New York and Boston. Of course, it is considered a developing Third World nation, and so there is a wide pool of available talent and the people are quite fantastic. We’ve had nothing but great experience and work very closely with the mining ministry and all the different mining groups. It is a very pro-mining country and a very good place to be doing business.”
Evans reports that San Albino-Murra’s first resource estimate should be out by July 2012.
Regarding the current drill program, she says, “We’re doing 25,000 metres in this two-square kilometre area. I had rolled a third rig which is currently joined up with the other two I have active in that area. In the late fall it been [used for] a small program about 1.5 kilometres south of the San Albino mine area. I think that based upon the results we’re seeing from there we’ll put a rig or possibly two down there to start off. Then we’ll be coming back to the San Albino mine area itself. It’s open in all directions and at depth at this point and our program will finish likely with it open in all directions and at depth. So what I would like to do is start spacing the drill holes tighter so we can take it from what will likely be an inferred category—with the possibility of some indicated—to more of a reserve level, and then we’ll start stepping out as well to try to define the outer boundaries of the San Albino area.
“We’re primarily explorationists,” Evans notes, “so I have a feeling that we probably won’t get a chance to play the production game. That said, just based on the level of interest I’m seeing already for doing this type of deposit, your capex costs are quite low—say $50 million to $100 million only—and it has very nice little cash-cow potential.
“We operate out of the local municipality—a little town called El Jicaro—and it’s about seven miles from the San Albino mine area. We have good all-weather roads all the way in; we have power in; and we’re right beside the river.
“We have over $3 million in the bank. My biggest costs by far are drilling costs because everything else is very inexpensive to run in that country. Working in a country that is a developing nation, your costs are considerably lower. We’ve got a number of warrants, all of which are in the money, which would drive in about another $13 million.
“We’re a very aggressive company, so in the last year we’ve progressed significantly,” Evans concludes. “I think we’re going to see another big step up this year with the initial resource and then with opening up other areas. There are actually three contiguous blocks that comprise this property, and right now we’re just focused in the very southern one, the San Albino block. We believe we can replicate what we’re seeing in that block in each of the blocks we have within the property boundary and also with the new property that I’ve just added south of us. We think there is huge potential and we’re looking at a possibility of a number of sizeable deposits. This isn’t elephant country where you’re going to see one big deposit of five million ounces. What we think we have the potential for is a number of small, one-million (give or take) ounce deposits. We think we can do that throughout the project area, so it’s going to be very interesting. We have some amazing targets down there.”
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