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Overview

Option Agreement to Acquire an Interest in the Tres Marias and Cebollas Gold/Silver Properties in Durango State, Mexico

October 21, 2003

VANCOUVER, October 21, 2003 – Canasil Resources Inc. (Canasil, TSXV: CLZ) is pleased to announce the signature of an option agreement with Wheaton River Minerals Ltd. (Wheaton River, TSX: WRM) and its wholly owned subsidiary Minas Luismin S.A. de C.V. (Luismin) to earn up to a 75% interest in the Tres Marias and Cebollas Gold / Silver properties located in Durango State, Mexico.

The Tres Marias and Cebollas properties cover 1,860 hectares, and are located 150 km west of the city of Durango and 14 km southeast of Luismin’s San Dimas/Tayoltita mine. The properties are situated on the prospective northwest to southeast structural trend from the San Dimas/Tayoltita mine. The regional and property geologic setting provide a favourable environment for the occurrence of economic high-grade gold / silver epithermal vein type deposits. Past production from the San Dimas/Tayoltita deposits has been 19 million tonnes of ore with 9.1 million ounces of gold and 654 million ounces of silver for a total gold equivalent of 19.2 million ounces (Wheaton/Luismin data). 

Activity at the Los Laureles vein at Tres Marias was first recorded in 1949 with smelter shipments of 73 tonnes of ore grading 40 g/t gold and 2,918 g/t silver (hand sorted ore in a 4:1 ratio). Chip sampling and regional mapping undertaken by Luismin in 2003 identified the potential for multi-directional vein structures, including the Los Laureles vein, with a possible strike length of over 1,200 metres and assays up to 10.14 g/t gold and 333 g/t silver over 1.7 metres. In addition 5 to 10 metre wide zones of breccia, stockwork and intense silicification along the flanks of these veins have yet to be systematically sampled for gold and silver mineralization. The Tres Marias and Cebollas properties have been sporadically worked by family miners and have never been systematically explored or drill tested.  

Under the agreement, Canasil can earn an initial 51% interest in the properties by issuing 50,000 shares to Wheaton / Luismin and incurring US$ 1.0 million in exploration expenditures over five years. Canasil’s interest may be increased to 75% in the sixth year by incurring a further US$ 700,000 in exploration expenditures. The agreement provides Wheaton / Luismin with an option to buy back a 35% interest in the properties for US$ 1.7 million after Canasil has acquired a 75% interest. A finder’s fee is payable for this acquisition. The agreement and the finder’s fee are subject to approval by the TSX Venture Exchange.

This agreement fits Canasil’s objective of acquiring properties with exceptional geologic potential and the possibility to add significant future value through cost effective exploration. The opportunity to cooperate with Wheaton River and Luismin will be very beneficial given Luismin’s well-established operations and infrastructure in Durango State.


About Canasil:

Canasil is a Canadian-based mining and mineral exploration company with base and precious metal properties in British Columbia, Canada.  The Company is reviewing a number of other gold and silver properties in Mexico with outstanding potential and anticipates completion of further acquisition agreements in the near future. The Company’s management team is focused on identifying opportunities 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

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