VANCOUVER, Feb. 1 /PRNewswire-FirstCall/ -- Mexivada Mining Corp. is pleased to announce that it has entered into a letter of intent with StoneShield Capital Corp. (TSX-V: STS.P) pursuant to which StoneShield has been granted an Option to earn up to a 70% undivided interest in the Jefferson Gold/Silver property, located 50 miles north-northwest of Tonopah, Nevada and three miles east of Round Mountain, Nevada. The Property comprises a contiguous block of 85 unpatented lode mining claims, totaling approximately 1,750 acres.
Under the terms of the Option agreement, StoneShield can acquire an initial 51% interest in the Property by incurring a total of US$3,500,000 in exploration expenditures on the property as follows: a minimum US$100,000 in expenditures on the Property to be incurred in the first year following TSX Venture Exchange acceptance ("Acceptance") of the agreement, a minimum US$150,000 in expenditures in the second year, and a total US$3,250,000 in expenditures on the project in the third and fourth years. In addition, StoneShield will make cash payments of US$50,000 to Mexivada on Acceptance and US$50,000 to Mexivada on the first, second and third anniversary dates of Acceptance as well as issue to Mexivada 100,000 shares of StoneShield on Acceptance, 150,000 shares on the second anniversary and an additional 250,000 shares upon notifying Mexivada that StoneShield has completed the stipulated requirements for earning a 51% interest in the property. StoneShield shall also pay all County, BLM and lease-option payments required to hold all of the existing Jefferson property mining claims and any additional claims and other properties acquired during the life of this option agreement and the subsequent Mexivada-StoneShield joint venture.
StoneShield can acquire an additional 19% interest (for a total 70% interest) in the Jefferson property by incurring an additional US$2,500,000 in expenditures within 24 months of the date upon which StoneShield earns an initial 51% interest in the Jefferson Property and completing a mining feasibility study within 30 months of that date, at which time StoneShield must issue a further 250,000 shares to Mexivada. Each party shall then be responsible for financing its own share of the proposed mining operation. At this point, StoneShield and Mexivada will also have the pro-rata right to purchase a 3% net smelter royalty ("NSR") from property lessor at the rate of US$1,000,000 for each 1% of NSR purchased (70% as to StoneShield and 30% to Mexivada).
The Jefferson property is situated along the Round Mountain-Northumberland Gold Trend, an Oligocene- to Miocene-age structural zone that hosts the Barrick/Kinross' 14,000,000 ounce Round Mountain Mine and the nearby Gold Hill gold mine and Newmont/Fronteer's Northumberland Mine, a Carlin-type, open pitted former gold producing mine. The Jefferson Canyon mining district was mined for silver and gold beginning in the late 1870's, and was explored by drilling by Echo Bay and its predecessor companies in the mid 1980's. It has since lain mostly dormant with only minor exploration by third parties, until the arrival of Mexivada, which has conducted an extensive exploration program in 2005 and 2007, laying the foundation for renewed drilling of gold and silver targets. Mexivada feels that the Jefferson Property holds good potential to host a new gold-silver mine, with the delineation of several new open pit and underground mine targets.
Six target areas of interest have been identified on the Jefferson property: West Vein (Vein Swarm and Disseminated Ag-Au target); Zone "Pit A" (open pit disseminated/vein Ag-Au); Zone "Pit B" (Open Pit Round Mountain type Au-Ag); Mogul (Vein type Au-Ag); SG-1/SG-2 (Open Pit Disseminated Round Mountain type Au-Ag); and Porphyry Hill (Vein/Disseminated Ag-Indium; Vein-type Au; Open Pit Round Mtn type Au; Room-and-Pillar bulk mineable Skarn Gold; Skarn base metals associated with deep Porphyry; Pluton-centered Carlin-type gold replacements).
2008 Exploration Program ------------------------
Significant geologic mapping, geophysical data collection and interpretation, and geochemical sampling were completed on the Jefferson project based on recommendations in a technical report prepared in 2005 pursuant to National Instrument 43-101. StoneShield has commissioned the preparation of an updated 43-101 Report to assess the results of recent work programs and to make further recommendations.
Priorities in the 2008 exploration program contemplated by StoneShield include acquiring more data from prior exploration companies that worked on the project (Kinross/Barrick; Prochnau). Additionally, several old adits and dumps are available to map and collect rock samples. Once acquired, all the available geologic and geophysical data will be merged into one digital platform for drill target definition. A 5,000-foot drill program will target the highest priority targets. Total exploration cost for this first phase of exploration is estimated to be about US$400,000.
Completion of any and all transactions contemplated by the Letter of Intent is subject to, among other things, acceptance by the Exchange and all other necessary regulatory approvals.
About Mexivada Mining Corp. ---------------------------
Mexivada is a diversified Canadian mineral exploration company that controls a large portfolio of highly prospective Gold-Silver, Molybdenum, Diamond, and Rare Metal exploration projects in Mexico, Nevada, and the Republic of Congo ("ROC"). Mexivada's business plan is focused on prospecting for, identifying, and acquiring high-grade mineral resource properties, conducting initial exploration evaluations and tests of these properties, and joint venturing the properties to exploration and mining companies that can facilitate taking these properties though mining feasibility and into production. Managed by experienced and successful board members and advisors, Mexivada is well financed with no debt. For further information, including area maps and photos, please visit our web site at http://www.mexivada.com/.
ON BEHALF OF THE BOARD OF DIRECTORS "RICHARD R. REDFERN" Richard R. Redfern President The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Caution Concerning Forward-Looking Statements
This news release and related texts and images on Mexivada's website contain certain "forward-looking statements" including, but not limited to, statements relating to interpretation of mineralization potential, drilling assay results, future exploration work, and the expected results of this work. Forward looking statements are statements that are not historical facts and are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: risks related to fluctuations in metals and diamond prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical, governmental, social, or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the company's projects; uncertainties involved in the interpretation of sampling and drilling results and other tests; the possibility that required permits and access agreements may not be obtained in a timely manner; risk of accidents, equipment breakdowns or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in these work programs.
Forward-looking statements contained in this release are based on the beliefs, estimates, and opinions of management on the date the statements are made. There can be no assurance that such statements will prove accurate. Actual results may differ materially from those anticipated or projected. Mexivada Mining Corp. undertakes no obligation to update these forward-looking statements if management's beliefs, estimates, opinions, or other factors, should change.
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