Columbia Metals Corporation Limited

Columbia Metals Corporation Limited

January 11, 2007 16:08 ET

Columbia Receives NI 43-101 Report for Lluvia de Oro Gold Property in Sonora, Mexico

- Bullion Shipment to Johnson Matthey Inc. - Agreement in Principle with BioteQ - DENM Engineering Ltd. Feasibility Near Completion - Start-up Financing Arrangements

TORONTO, ONTARIO--(CCNMatthews - Jan. 11, 2007) - Columbia Metals Corporation Limited (TSX VENTURE:COL) (the "Company") is pleased to announce that, following a review by the TSX-V, it has received a NI 43-101 compliant report by R. A. Blakestad, J.D., C.P.G., Q. P. for its Lluvia de Oro Gold Property located in Magdalena de Kino, Sonora, Mexico, the summary from which is reproduced below:


1.1 Project Overview

The Lluvia de Oro property is a former-producing, advanced-stage, gold project located 13 km northwest of Magdalena de Kino, Sonora Mexico. The project is being developed by Columbia Metals Corporation Limited (hereafter "Columbia Metals"), a TSX Venture Exchange listed company (Symbol: COL), through its Mexican subsidiary Minera Columbia de Mexico, SA de CV. Columbia Metals controls all mining, surface and water rights and the assets of the Lluvia de Oro property under a purchase agreement with Tara Gold Resources Corporation (OTCBB:TRGD), hereafter "Tara Gold") subject to a 20% net cash flow interest (NCF).

Assets of the Lluvia de Oro property include a complete recovery plant with three solution ponds, two 700 gal/min (2,650 l/min) carbon column sets, carbon stripping equipment, carbon regeneration unit, dore furnace and field office facilities are in-place at the mine. In addition, there is a double-lined leach pad with 2,921,000 tonnes placed on the pad by previous operators, and a drill hole database of 260 drill holes, which partially defines two zones of gold-silver-copper mineralization. The Upper Zone of mineralization includes the remaining un-mined resources in the floor and walls of the Creston Pit, and northeast extensions of that mineralization from near-surface to a depth of approximately 75 meters below surface.

A Lower Zone of mineralization, identified by previous work on the property and partially confirmed through drilling by Columbia Metals in 2006, is a relatively flat-lying zone of mineralization, below the Upper Zone. This Lower Zone mineralization is only partially identified by drilling. Due to the apparent higher grade and potential for greater lateral distribution of the Lower Zone of mineralization, as reported in this document, aggressive exploration of the zone is warranted.

1.2 Geology

Lluvia de Oro gold-silver-copper mineralization is primarily contained within the upper plate of a detachment fault block of Early Cretaceous sedimentary rocks. The detachment block is approximately 3,000 meters long, 800 to 1,500 meters wide, and 220 to +234 meters thick in the central portion. The allochthonous block lies in structural contact above metamorphosed Jurassic to Mid-Tertiary volcanic, sedimentary and intrusive rocks of the Magdalena Metamorphic Core Complex (Nourse, 1992).

1.3 Exploration and Resource Status

Exploration of the Lluvia de Oro mine area is in an advanced stage with 264 exploration and resource definition drill holes comprising more than 26,000 meters of drilling. Work to date has identified two envelopes of gold-silver-copper mineralization comprising the Upper and Lower Zones. Mineral resources for the two zones are defined in a series of grade-tonnage tables for a variety of gold cutoff grades. The Measured and Indicated resources for the Upper Zone are shown in Table 1.1, while the Inferred Resources for the Upper Zone are shown in Table 1.2. The resources are reported for a cutoff grade of 0.4 g/t Au. The Measured and Indicated resources at the 0.4 g Au/t for the Lower Zone are shown in Table 1.3, while the Inferred Resources for the Lower Zone are shown in Table 1.4.

Au/t Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
0.40 263,000 0.693 5,860 2,130,000 0.632 43,280 2,390,000 0.639 49,101
Table 1.1: Measured and Indicated Resources -- Upper Zone.

Au/t Tonnes g Au/t Oz Au
0.40 3,410,000 0.588 64,455
Table 1.2: Inferred Resources -- Upper Zone.

g Au/t Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
0.40 25,000 1.328 1,067 480,000 1.17 18,056 636,000 1.025 20,959
Table 1.3: Measured and Indicated Resources -- Lower Zone.

g Au/t Tonnes g Au/t Oz Au
0.40 5,760,000 0.716 132,595
Table 1.4: Inferred Resources Lower Zone.

A resource analysis of the existing leach pad indicates that 30,100 ounces of gold remain in 2,921,000 tonnes of rock materials placed on the pad between 1996 and 1998.(1 see note below) Mineral Resource calculations show that an Indicated Resource of 10,926 ounces of gold are contained in 640,000 tonnes within 7.0 meters of the surface of the northeast end of the leach pad, as set forth in Table 1.5.

Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au Tonnes g Au/t Oz. Au
0 0 0 640,000 0.531 10,925 640,000 0.531 10,925
Tonnes g Au/t Oz. Au
725,600 0.378 8,818
Table 1.5: Summary table of Mineral Resources for the Lluvia de Oro leach
pad (2 see note below).

1.4 Data Integrity

Assay data and maps summarizing results of exploration by previous operators at Lluvia de Oro have been reviewed and corrected where necessary, to establish a reliable database for current and future resource assessment. The current database is considered to be reliable.

1.5 Conclusions

Lluvia de Oro is a detachment-fault, bulk-tonnage gold deposit with 264 drill holes and other exploration results that suggest a substantial in-situ gold-silver-copper resource with excellent potential for increasing the mineral resources. The data support recommendations to consider near-term production scenarios for a crush and re-leach plan regarding the northeast end of the leach pad, continued exploration and definition of resources for the in-situ mineralization defined for the Upper Zone mineralized envelope, and for additional exploration of the potentially larger and higher-grade Lower Zone mineralization. The recovery plant at Lluvia de Oro is in good condition, and additional improvements and rehabilitation are warranted.

1.6 Recommendations

Drilling is recommended to increase the resource base and convert established Inferred Resources to higher categories. Drilling should be conducted so that both the Upper Zone and Lower Zone mineralized envelopes can be evaluated by the same drill hole layout.

In conjunction with additional drilling, it is recommended that a detailed operating plan and capital expenditure budget be created to become the basis of an economic analysis of a "crush and re-leach" program for the Lluvia de Oro leach pad materials, and for potentially restarting mining at the Creston Pit. Said operating plans and budgets should incorporate the economics of copper recovery and cyanide regeneration from process solutions utilizing the BioteQ or SART recovery process.

The following exploration activities and support work are recommended:

- Conduct an induced polarization (IP) survey over the central portion of the detachment block to determine if IP will aid in selecting drill sites for defining the distribution and grade of the two mineralized envelopes.

- Conduct a topographic survey of the Creston Pit and mine facilities to tie the existing surface conditions to the pre-mining topographic map of the area.

- Conduct exploration drilling to evaluate the Lower Zone mineralization; to include 21 vertical RC drill holes west of the Lluvia Shear Zone and 8 vertical drill holes SW of the Creston Pit.

- Conduct resource definition drilling in addition to exploration drilling; 52 holes to include approximately 50% diamond drill holes.

- Complete metallurgical studies to define expected Au-Ag-Cu recoveries for the leach pad materials, and to evaluate recovery expectations for in-situ mineralization of the Upper Zone utilizing the BioteQ/SART recovery process.

- Conduct in-house feasibility analysis to evaluate restart of in-situ mining at the Creston Pit."

- Note 1: The basis of the resource estimate for the leach pad material is a historical estimate derived from mine production records and should not be relied upon. Columbia has not done the work necessary to verify the classification of the resource or reserve, Columbia is not treating them as a NI 43-101 defined resource or reserve verified by a QP and the historical estimates should not be relied upon.

Note 2: During June-July 2006, Columbia Metals carried out a comprehensive program of rock chip and channel-chip sampling of materials on the heap leach pad. Two sampling methods were employed (chip-channel sampling and trackhoe pit sampling) to systematically sample the materials on the leach pad. The Indicated Resource is calculated for northeast end of the leach pad materials to a depth of 7.0 meters and the Inferred Resource is calculated for the material between 7.0 and 14.0 meters.

The NI 43-101 report has been SEDAR filed and a link to the report will be provided on the Company's website.

Additionally, plant clean-up and refurbishment has been completed and a small amount of dore derived from the plant clean-up (53.319 ounces) was shipped to Johnson Matthey Inc. in Salt Lake City, Utah for storage and eventual refining.

An agreement in principle has been reached with BioteQ whereby BioteQ will build, own and operate a copper recovery and cyanide regeneration plant to remove and recover soluble copper from the gold-silver-copper Lluvia leach pad solution. BioteQ will recover its capital costs plus an appropriate interest through a metals revenue sharing agreement with Columbia.

D.E.N.M. (Engineering) Ltd. reports that their feasibility study concerning start-up capital and operating costs respecting re-leaching of the existing pad and the upper zone material is nearing completion and should be available next week.

Project financing arrangements for start-up financing for pad re-leaching and re-start of the Lluvia Mine based on the existing resources are well advanced. Terms and conditions will be released upon finalization of the agreements.

This press release was prepared by R. A. Blakestad, J.D., C.P.G. and J. E. Steers, P. Eng., Q.P. for Columbia Metals Corporation Limited.

Shares Outstanding: 59,896,427

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Columbia Metals Corporation Limited
    Carl Di Placido
    President and CEO
    (416) 364-6799