Canasil Signs Letter Agreement to Acquire El Terco Gold Project in Sonora State, Mexico
June 1, 2005
VANCOUVER, June 1, 2005 – Canasil Resources Inc. (Canasil, TSXV: CLZ) announces that the Company’s wholly owned Mexican subsidiary, Minera Canasil S.A. de C.V. (Minera Canasil), has signed a letter agreement providing for the acquisition of the El terco gold project in Sonora State, Mexico. The agreement provides Canasil with the option to acquire 100% interest in the project over five years, against total payments amounting to US$700,000 and up to 1.5% Net Smelter Return Royalty. The agreement is subject to a further property visit by Canasil, planned for the first half of June 2005, and approval by the Board of Minera Canasil. The project has potential for hosting “Mesquite” type gold mineralization, and is located on the continuation of a trend of similar gold deposits from the Mesquite mine in Southern California to the La Colorada mine in Sonora.
The El Terco project covers 96 hectares, located 20 km North Northwest of the city of Navojoa in Southern Sonora State, Mexico. The infrastructure at the property is excellent, with access via paved highway and 16km of all weather gravel road, which is in very good condition. The CFE (Federal Power Authority) power line is close to the property, and water is supplied from underground sources as well as from creeks in the property area. Supplies, medical services, banks, services and labour are available from the nearby city of Navojoa. The climate and topography are characteristic of the coastal plains in Southern Sonora with an elevation of 100m to 150m above sea level, and a generally dry and warm climate with the exception of the rainy season between July and October.
The gold mineralization observed at the El Terco project is consistent with that seen at a number deposits occurring along the trend running towards the southeast from the Mesquite mine in Southern California, including the La Choya, La Herradura, the San Francisco and La Colorada mines in Sonora State, Mexico. Mineralization is hosted by metamorphic rocks of Jurassic age, with strong regional deformation with gold mineralization occurring in fractures and silicification within the structure. There is evidence of several small mine workings operated by local miners on the property, with visible gold observed in the surface pits at these sites.
In 1994 Minera Glamis SA de CV, a subsidiary of Glamis Gold Corp. (Glamis) investigated a 30 hectare zone in the centre of the project area. Glamis sampled this zone and drilled up to 58 short holes with a track drill down to a depth of 30 metres, looking for mineralization close to the surface. A number of these holes intersected the gold bearing structure and gave the results shown in the attached table.
The mineralized structures observed in past exploration at the project indicate several zones returning gold values between 1.0 – 3.0 g/t over drill intercepts of 3 – 12 metres. While the gold values reported are very encouraging, the drill intercepts are relatively narrow for this style of mineralization. However the mineralized zones have not been fully investigated because of the shallow drilling down to a depth of only 30 metres, and the relatively small area of 30 hectares covered by the drill program. This project is of significant interest because of the presence of gold amenable to low cost mining and processing due to the style of mineralization and the project location.
The Company plans to complete the final evaluation visit for the project in early June 2005, and if warranted proceed with the completion of the agreement providing for the acquisition of the project. The El Terco project is an advanced exploration project with the potential to move rapidly towards further drilling and possible development of a low cost gold mining operation.
About Canasil:
Canasil is a Canadian-based mining and mineral exploration company with interests in base and precious metal properties in British Columbia, Canada, and Durango State, Mexico. The Company is reviewing a number of other gold and silver properties in Mexico for acquisition. The management team is focused on identifying and implementing strategies to increase the value of the Company’s mineral properties through cost effective and responsible development.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.For further information please contact:
Mr. Bahman Yamini
President and C.E.O.
Canasil Resources Inc.
604-709-0109
www.canasil.com
Drill results from 1994 drilling by Glamis at the El Terco project, Sonora, Mexico:
This information from drilling completed by Glamis in 1994 has been provided to Minera Canasil by the property owners as part of the data package on the El Terco project. While Canasil and Minera Canasil are not in a position to verify these results, there is no reason to assume that these results are not an accurate reflection of the findings during the drill program.
Location map of the El Treco Project, Sonora, Mexico:
Trend showing mines with “Mesquite” type deposits in California and Sonora:
