Maxy Gold Corp and Western Mining China Group unveil the high potential Huangnan Copper-Gold Property as the first property of their strategic allianceadmin
Maxy Gold Corp. announced that Maxy and China’s Western Mining Group (“Western Mining”) have entered into a formal Joint Venture (JV) Agreement on the “HUANGNAN” Copper-Gold Project, located in Qinghai Province, China. This is the first Property incorporated under their Strategic Exploration Alliance Agreement announced on October 4th 2006. Maxy has signed four letters of intent with Western Mining to jointly explore gold and base metals properties held by them in Tibet and Qinghai Provinces in western China. The other three projects, which include Au-Cu and Ag, Pb, Zn prospects, are in the process of due diligence and will be announced during the first and the second quarters of 2007.
Under the JV agreement Maxy has the right to earn a 50% interest in the Huangnan property (the “Property”) by spending US$2 million dollars over a 2 year period. Should a discovery be made, Western Mining will have the right to earn back a 15% interest by completing a feasibility study and developing the mine to production. Maxy will be operator and manager of the exploration phase of the J/V and Western Mining will act as operator and manager of the development and mining operations and will be in charge of obtaining all the required mining permits. The JV agreement is for a 3 year period.
As announced October 12th 2006, Western Mining as part of this Strategic Alliance is investing $2,250,000 in Maxy by way of a private placement of 1,875,000 Units priced at $1.20 per Unit, being the approximate average of Maxy’s share price over the 3 month period, August to October 2006. The Units are comprised of one common share and one common share purchase warrant exercisable for a period of two years from closing, at $2.00 per share.
In July 2006, Maxy Gold announced that Mr. Mao Xiaobing, the Chairman and President of Western Mining Co. Group, Ltd., had joined Maxy’s board of directors.
THE “HUANGNAN” COPPER – GOLD PROPERTY
Access and Infrastructure
The Huangnan Property consists of 2 large exploration permits (the Duoba-Jijie and Danbolong blocks) totaling 203 km(2) located in Qinghai Province, western China. The area is located approximately 120 km east of Xining, the capital city of the Province, in the extreme east part of the Province near the border with Gansu province. The Property is at an elevation varying between 3000 to 4000 metres. Access to the Property is good and infrastructure is excellent with power, railway, communications, excellent water resources and the prefecture capital nearby Processing and smelting facilities are located in the Xining area where Western Mining’s milling and refining facilities are established.
The local Region has been prospected since 1966 by various government organizations. Numerous Au, Cu, As, Sn, Pb showings and deposits have been found and there are at least 7 medium scale to small scale operating Cu, Au and Cu-Au mines in the region and bordering the Property.
The Huangnan Property area itself was identified in 2005 through soil geochemical surveys, mapping and surface trenching. A regional survey by the Qinghai Non-Ferrous Metal Exploration No. 7 Group discovered 3 new mineralized alteration areas where 9 copper showings were identified and sampled as part of a 1:25,000 regional soil survey program (ridges and spurs) defining 11 anomalies. Additionally, 3 areas have been identified for further prospecting.
The Property is located within the triangle of Qinghai, Gansu and Sichuan Provinces, China’s “GOLDEN TRIANGLE”, a region with a well-established gold and base metal production base. Seven medium size to small scale operating mines are located near the Property. The main producers include the Shuangpegxi Gold mine, the Jiangligo Copper mine (2.5 Mt (at) 0.5 to 0.9% Cu (Au,W)) and the Qiarudong Cu – Ag mine. (0.6 to 1.5 % Cu). In total the region is host to more than 20 deposits.
Property Mineralization and Exploration Potential
Four (4) regional multi-element geochemical stream sediment anomalies have been defined within the Huangnan Property included in a 25 km long by 10 km wide structural corridor that is host to a number of mines bordering the Property. 3 anomalies are located on the Duoba-Jijie permit 1) a significant Au, As, Sb, Ag anomaly measuring 11 km x 2-3 km has been delineated 2) an Au Ag anomaly measuring 1.5 km2. 3) a small Au,As,Ag, Sb anomaly measuring 1.2 km2. On the Danbolong permit One (1) Cu, Zn, Au, Ag anomaly measuring 14 km x 4 km has been delineated. A wide range of mineralization and alteration styles have been identified including: Sedex base metals, Epithermal Au-Ag, Pb (both high and low sulphidation), skarn base metal and porphyry copper mineralization.
The Huangnan Property is considered a highly prospective, early-stage project with numerous metal anomalies, and significant mineral showings within a mining camp where many producing mines are located adjacent to the property. The potential to quickly define one or more deposits with resources on the Property is considered to be excellent.
The preliminary program will include a systematic compilation and base data reinterpretation (geology, geochemistry and airborne geophysics as well as satellite imageries) in the coming months, followed by an intensive prospecting and soil geochemistry campaign over selected areas, followed by ground geophysics as necessary. Drilling is targeted for the latter part of 2007.
Maxy will initiate its NI 43-101 report on the Property in January and is presently selecting the consulting firm to carry out the work and in conjunction with Western Mining, pursue the identification of other properties to include in the Strategic Alliance.
China is the world’s fourth largest gold producing country and is host to a number of world-class base and precious metal deposits with great geological potential. Maxy aims to participate in an exciting exploration and development period in China.
Andre Gauthier, President and CEO of Maxy, commented: “I am very excited by the gold, copper and polymetallic discovery potential of this new project and Maxy is very proud to associate itself with a creative leader in the Chinese mining and refining industry, and to participate in the promising exploration region of Qinghai province of Western China. Maxy’s team will benefit significantly from the expertise of such a renowned mining group in China and hopefully will lead Maxy and its shareholders to fully benefit from a significant discovery in Western China. We are pleased to further our objectives of increasing shareholder value and building a credible exploration and development group which will fully integrate into the Chinese Mining industry. The agreement will also enable Western Mining to increase significantly its already aggressive exploration programs in western China and to increase its chances of finding another world class discovery.”
ABOUT WESTERN MINING CO. GROUP, LTD.
Western Mining is one of the largest mining conglomerates in China, with diversified holdings that include four large and medium sized non-ferrous mines, one of which, the “Xitieshan” is China’s largest mine with annual production capacity of 1.5 millions tons of Pb-Zn minerals and 160,000 tons of Pb, Zn metals. Western Mining is based in the province of Qinghai and focuses on the mining, processing, refining and smelting of lead, zinc copper and other non-ferrous metal resources. It has a work force of more than 8,000 and an assets value in excess of US$ 10.5 billion, including subsidiary listing applications on the Hong Kong and London Stock Exchange.
ABOUT MAXY GOLD CORP.
Maxy Gold is focused on the acquisition, exploration and responsible development of precious and base metal properties in China, while building key strategic alliances, compiling a unique technical database and establishing the company at the forefront of China’s financial marketplace. Maxy Gold has assembled a technically oriented team that combines more than 25 years of exploration experience in China and aims to become a major player in the development of a strong mining industry and venture capital market in China over the next few years. The company’s current activities are focused on the MIDU and Joint Venture where gold and base metal mineralization has been identified, and on the strategic joint venture alliance with Western Mining Co. Group, Ltd. one of China’s largest mining and development companies.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Statements in this press release other than purely historical information, including statements relating to the Company’s Future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company’s business, including
Risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.
For further information
Maxy Gold Corp.: Andre Gauthier, President, Phone (604) 688-8811, email: firstname.lastname@example.org, Website: www.maxygoldcorp.com
Source: Maxy Gold Corp.