EXMIN Resources Inc.

EXMIN Resources Inc.

January 18, 2007 08:31 ET

EXMIN Resources Inc.-Moris Mine Update: Due Diligence Program Confirms Grades and Potential to Expand Historical Resources; Process Improvements Identified, Ni 43-101 Report Commissioned

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 18, 2007) - EXMIN Resources Inc. (EXMIN) (TSX VENTURE:EXM) is pleased to provide shareholders with an update on the due diligence program at the Moris Mine that led to the positive decision to complete the purchase of the assets of Minera Moris, in conjunction with Minera Hochschild Mexico, S.A. de C.V, a subsidiary of Hochschild Mining plc (Hochschild) (HOC.L for Reuters, HOC LN for Bloomberg) as announced on December 12, 2006.

According to the results of due diligence program at the Moris Mine, EXMIN believes that:

- Drill testing of the proven and probable blocks in the historical reserve has confirmed the validity of historical data, and an NI 43-101 report is being prepared on the resource.

- Exploration down dip and along strike from the mined portion of the Santa Maria vein and in nearby areas of alteration and veining within the Moris Mine land package is planned to identify additional mineralized zones.

- Preliminary results of metallurgical testing currently in progress indicate that gold recoveries of 70% could be achieved when optimum crush sizes are obtained.

- Review of historical operational data indicates that significant quantities of gold may remain in the previously leached material, and that reprocessing of the old heap to recover additional metal may be warranted.

- EXMIN and Hochschild believe that production may commence at the Moris Mine in the third quarter of 2007, based upon analysis of the due diligence data and evaluation of the mine installations.

Karl J. Boltz, President and CEO of EXMIN, stated, "The Moris Mine due diligence program focused on confirming the grades of the historical reserve that was left by Manhattan and also evaluated the historical feasibility and operational data on the mine. All the permits and infrastructure have been maintained and are in good shape, and miners living in Moris are available and willing to work at the mine. EXMIN has engaged a Qualified Person under NI 43-101 standards to complete the work necessary to be able to determine resources at the mine in the first quarter of 2007. The Moris Mine asset will help EXMIN to qualify for listing on the TSX as we step towards planned production by Q3 2007."

The Moris Mine purchase agreement is one of two joint venture agreements between EXMIN and Hochschild's Mexican subsidiary, Minera Hochschild Mexico, S.A. de C.V. (MHM), the project operator. EXMIN and Hochschild agreed to purchase 100% (EXMIN 30%, Hochschild 70%) of the Moris Mine and facilities from the former owner, Minera Moris, for a total purchase price of US$6 million plus 15% VAT (see News Release of July 19, 2006).

EXMIN has also signed an earn-in exploration joint venture agreement whereby Hochschild can earn up to 70% interest in EXMIN's 100% mining concessions related to an area of approximately 73,500 hectares that forms the Moris exploration project that was announced on March 22, 2006 (see News Releases of March 22 and July 18, 2006).

Moris Mine - Santa Maria Vein System And Production History

The Santa Maria vein system consists of massive quartz vein material with stockworks in the adjacent wall rock and varies from a few metres to more than 30 metres in width. The vein strikes approximately north-south and is exposed as erosional remnants on three hills exposed over a 1.1 kilometre strike length at the edge of the Moris valley.

The vein dips moderately towards the valley, providing an ideal geometry for bulk-tonnage mining with a low stripping ratio. Manhattan Minerals (Manhattan) defined three deposits that correspond to the 3 erosional remnants. All of Manhattan's production came from southernmost and largest of the bodies, the Creston deposit.

The Moris Mine was operated by Manhattan from 1996 to 1999 and was shut down in 2000 due to low gold prices. At the time of the mine's closing, Manhattan had been producing 3000 tons per day and reported a remaining proven and probable mineable reserve of 3.1 million tonnes at grades of 1.73 grams per tonne (g/t) Au and 6.55 g/t Ag based on an independent estimate by JAC International Ltd. of Tucson, Arizona ((i)See Note below). This model used a gold price of US$300, a cutoff of 0.74 g/t gold equivalent and a recovery of 65%, and resulted in a low strip ratio of 1.5 tonnes of waste for every 1.0 tonne of ore moved. Also, the historical data indicate that the highest grade portion of the deposit remains in the unmined portion of the Creston pit.

A total of 4.05 million tonnes of potential mineralization at similar grades was classified by Manhattan as measured and indicated resources and included a fourth deposit on a separate structural zone that has only been partly explored. The total inferred resource at that time was stated to be 4.7 million tonnes for a total of about 250,000 ounces of contained gold and 850,000 ounces of contained silver. The table below summarizes the Manhattan reserves and resources at the time the mine was shut down.

Historical reserves and resources reported by Manhattan in 2000
Category Tonnes (000) Au (g/t) Ag (g/t) Au (oz) Ag (oz)
Mineable Reserves 3,139 1.73 6.55 174,672 661,399
Measured and
Indicated Resources
(includes reserves) 4,050 1.62 5.79 210,941 753,919

Inferred Resources 667 1.86 4.65 39,887 99,717

(i) Note: EXMIN is reporting data from the operation of Manhattan
Minerals from 1996-2000. These data were generated before current
industry regulations were adopted under NI 43-101 standards. EXMIN
considers these data 'historical' in nature and has engaged a
Qualified Person to complete a report under NI 43-101 guidelines in
order to recalculate the 'historical estimate' following CIM
classifications, and until complete, the 'historical information'
should not yet be relied upon. The EXMIN-Hochschild JV is in the
process of replacing the 'historical data' with due diligence data
of its own, as reported in this release.

Due Diligence Program - Drilling Confirms Historical Resource Blocks

Confirmation drilling of the remaining historical resource blocks that were reported by Manhattan on closing of the mine in 1999 was carried out during the 6 month due diligence period. A total of 1,126.45 metres have been drilled in 21 diamond drill core holes to confirm the reserve data: ten holes were drilled on the Creston deposit, five on the San Luis deposit and six on the Eureka deposit (see table below). Assay results from one hole are pending.

Internal analysis by EXMIN and Hochschild personnel have verified the Manhattan data to the Companies' satisfaction, based on comparative analysis of the assays and lithologic data obtained from the due diligence program and from the Moris Mine database, subject to the preparation of a NI 43-101 report by a Qualified Person under CIM classifications.

Assay results from drilling of the historical resource, Moris Mine
Intercept Inclin-
Drill Hole Depth (m)(ii) Au (g/t) Ag (g/t) TD Azimuth ation
Creston Deposit
HMC-1 33.7 3.6 0.86 1.8 75 90 -45
and 52.0 6.0 0.50 2.9
HMC-2 50.0 1.35 0.65 2.5 51.35 90 -50
HMC-3 16.0 16.45 0.74 2.0 62 90 -50
and 36.0 11.65 1.76 2.5
HMC-4 26.0 28.4 3.22 4.3 99 90 -45
includes 9.0 6.86 5.7
HMC-5 2.7 0.45 3.38 60.0 42 70 -45
and 11.5 6.7 (FW) 2.45 8.7
includes 0.45 13.85 14.5
HMC-6 6.9 9.0 13.37 19.9 60.1 90 -45
includes 3.0 33.67 41.1
HMC-7 20.4 6.6 0.53 1.9 46.5 90 -45
and 39.45 1.45 (FW) 4.47 3.4
HMC-13 16.0 11.6 1.62 3.1 44.8 -- Vertical
includes 2.6 4.30 7.8
HMC-14 35.85 11.5 3.01 4.4 70 90 -75
includes 0.75 19.40 27.2
HMC-17 8.4 18.1 3.76 4.8 40 -- Vertical
includes 3.0 15.33 14.7
and 34.05 4.0 (FW) 0.49 1.9
San Luis Deposit
HML-1 1.3 7.4 0.97 2.5 60.6 -- Vertical
HML-2 33.5 2.5 (FW) 0.52 0.8 39.9 -- Vertical
HML-4 3.5 8.5 (HW) 1.85 7.9 53.1 -- Vertical
and 16 1.05 (HW) 3.32 3.0
and 19 13 1.00 3.3
and 39 1.0 (FW) 1.84 2.1
HML-5 2.3 20.45 0.95 7.5 57.8 -- Vertical
includes 8.15 1.32 11.1
HML-6 1.1 5.7 1.40 7.6 72.15
and 31.25 3.45 1.95 1.3
Eureka Deposit
HME-1 3.2 2.1 0.62 1.4 46.8 90 -45
HME-2 2.1 11.35 1.26 11.9 40 90 -45
HME-3 1.4 7.0 2.00 6.6 35.35 90 -45
HME-4 1.15 5.15 1.12 4.9 40 -- Vertical
and 22 1.5 3.00 8.7
HME-5 16.4 5.6 1.16 2.6 40 -- Vertical
HME-6 Pending 50
(ii) Intercepts approximate true widths for angle holes and are greater
than true with for vertical holes. Intercepts include the main vein as
well as hangingwall (HW) and footwall (FW) zones.
Note: Results for holes HMC-1 to HMC-7 were previously released but
intercepts have been recalculated, and are included for the purpose of

Due Diligence Program - Surface Channel Sampling Confirms Grades
Several trenches and road cuts were sampled in the Creston and San Luis deposits. This data also confirms the grades of the mineralization as reported in the historical reserve (see table below). The widths of the mineralized zones reported do not represent true widths, because the trenches in the Creston deposit, although transverse to the vein, are horizontal across the dipping vein, while the San Luis samples were taken in road cuts as horizontal channels both transverse to strike as well as parallel to the strike direction.

Channel samples from the Moris mine
Au Ag
Trench/Cut Interval (g/t) (g/t)
1 19.2 0.99 4.2

2 23.7 1.00 3.2
with 12.0 1.34 4.1

3 29.7 1.53 7.2
with 11.4 2.48 6.2

San Luis
508 42.0 1.11 6.7
with 6.0 3.73 13.5

509 22.0 2.98 6.2

510 16.0 4.68 5.7

Moris Mine Upside - Operational Changes May Increase Recoveries

Analysis of the mine production data shows that problems with metallurgical recoveries that plagued the Moris Mine operation were most likely a result of changes to the crushing circuit made in an attempt to mitigate the effect of the low gold price in 1998 and 1999. These changes included an increase in plant throughput that resulted in a larger than optimal crush size and removal of the agglomerator, factors that apparently negatively impacted metal recoveries.

Metallurgical tests for Manhattan's feasibility study for the original mining operation were performed by Kappes Cassidy and Associates and indicated gold recoveries in excess of 70% for a crush size of 100% -6.3 mm. Data from the Manhattan operation indicates that the crushing circuit averaged about 80% -12.5 mm and in the last few months of operation, averaged about 80% -20mm. Preliminary results of metallurgical studies currently in progress by Kappes Cassidy and Associates also indicate that gold recoveries could be achieved at 70% when optimum crushing is obtained and the ore is agglomerated. EXMIN believes that not only can metallurgical recoveries be increased, but that significant gold values may remain in the leach pad and re-processing of this material could increase the amount of metal recovered during operation of the mine.

Additionally, the occurrence of significant coarse gold in certain areas of the historical resource has been recognized. Some of this material has been mined at a small scale by artisanal miners, or gambusinos, during the period that the mine was shut down. This gold is too coarse to be effectively recovered by heap leaching. The addition of a circuit for processing of this gold-rich material prior to leaching could increase the amount of metal recovered. Analysis of different mining and metallurgical scenarios is planned for the first quarter of 2007.

Quality Control - Quality Assurance

Individual samples were prepared and analyzed by ALS Chemex at their labs in Mexico and Vancouver. Core was cut into two approximately equal portions, with one half sent to the geochemical lab for assay and the second half conserved on site. In certain cases, the remaining half was removed for metallurgical studies. Gold analyses were performed by fire assay with an AA finish, and silver analyses were part of a multi-element package.

Hochschild completes its exploration programs and resource calculations under the Australian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code) and has emplaced quality control procedures consisting of insertion of standards and blanks (coarse and fine) in the sample stream as well as submission of duplicate samples and repeated assays of both fine (pulps) and coarse material.

Dr. Craig Gibson, PhD., Executive Vice President of Exploration, is the authorized professional geologist for EXMIN Resources Inc. and the direct manager of all technical programs and information on the part of EXMIN.

Neither EXMIN's joint venture partner, Minera Hochschild Mexico, nor Hochschild Mining plc or any of its subsidiaries, accept any responsibility for the use of project data or the adequacy or accuracy of this release.

About Hochschild

Minera Hochschild Mexico (MHM) is a subsidiary of Hochschild Mining plc (Hochschild) (HOC.L for Reuters, HOC LN for Bloomberg), a publicly held, Peru-based precious metals mining company, listed on the London Stock Exchange in November 2006. Hochschild is a primary silver producer and also produces a significant quantity of gold (approximately 10.5 million ounces of silver and approximately 232 thousand ounces of gold in 2005). The company has over forty years experience in the exploration, evaluation and extraction of precious metal epithermal vein deposits. Currently, it has three underground, epithermal vein mines supported by fully developed infrastructure, at the Arcata, Ares and Selene operations in Southern Peru. Hochschild also has two advanced and two early stage development projects in Argentina, Mexico and Peru and in addition, over twenty long-term prospects throughout Latin America. Hochschild's company headquarters are in Lima.


EXMIN Resources Inc. (EXMIN) is currently focused on the exploration and development of precious metal properties of exceptional merit in the Sierra Madre gold belt of Northwestern Mexico.

Note: EXMIN Resources Inc. (EXMIN) has taken all reasonable care in producing and publishing information contained in this news release. Material in this news release may still contain technical inaccuracies, omissions or typographical errors, for which EXMIN assumes no responsibility. This news release may include certain "forward-looking statements" including but not limited to comments regarding predictions and projections. All statements, other than statements of historical fact, included in this news release, including, without limitation, statements regarding potential mineralization, exploration results, and future plans and objectives of EXMIN, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in documents filed from time to time with the regulatory authorities.

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

Contact Information

  • EXMIN Resources Inc.
    Karl J. Boltz
    President & CEO
    EXMIN Resources Inc.
    Investor Relations
    Email: info@exmin.com
    Website: www.exmin.com