American Consolidated Minerals Corporation

American Consolidated Minerals Corporation

May 11, 2011 08:00 ET

American Consolidated Enters into Agreement to Acquire 50% Interest in Sierra Rosario Property, Mexico

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 11, 2011) - American Consolidated Minerals Corporation ("ACM" or the "Company") (TSX VENTURE:AJC) is pleased to announce it has entered into an agreement with Sparton Resources Inc. ("Sparton") (TSX VENTURE:SRI) for the acquisition of Sparton's 50% interest in the 500-hectare Sierra Rosario Property ("Sierra Rosario"), located in the state of Sinaloa, Mexico (the "Acquisition"). Sparton currently holds a 51% interest in Sierra Rosario in a Joint Venture with International Northair Mines Ltd. ("INM") (TSX VENTURE:INM) which owns the remaining 49%. Sparton will transfer a 1% interest in Sierra Rosario to INM concurrently with the closing of the first payment and share issuance from ACM to Sparton, as outlined below.

Under the terms of the agreement, the Company will have a 45-day period to conduct a due diligence study on Sierra Rosario, and upon giving Sparton notice to proceed with the Acquisition, American Consolidated will acquire the 50% right, title and interest in and to Sierra Rosario by:

  1. Paying to Sparton $250,000 ($10,000 upon signing and non-refundable) and, subject to acceptance of the agreement by the TSX Venture Exchange (the "Exchange"), issuing to Sparton 250,000 common shares of the Company; and
  1. Paying to Sparton an additional $250,000 and issuing to Sparton a further 250,000 shares of the Company on the first anniversary date of Exchange acceptance.

Sparton will receive Net Smelter Return Production Royalties payable from ACM's share of production of:

  1. 3% of ACM's share of Base Metal Production
  1. 2% of ACM's share of Gold Production
  1. 1.5% of ACM's share of Silver Production

ACM will assume the responsibilities of a 50% partner in the joint venture with INM and be subject to the existing joint venture terms. INM will become operator of the joint venture upon closing of the Acquisition.

The Sierra Rosario Property was explored by Sparton and INM over a four year period from 2004-2008. It lies within the Sierra Madre Occidental Mineral Belt of Sinaloa Province in Northern Mexico, approximately 25 kilometres northwest of the town of Choix and 40 kilometres east of the town of Alamos. Both areas have a strong history of precious metals mining.

Included in the multiple precious metals targets at Sierra Rosario are epithermal gold veins hosted by Tertiary volcanic rocks, disseminated silver and gold in an altered rhyolite porphyry intrusive, in addition to base and precious metals hosted replacement bodies (mantos) within Cretaceous limestone.

This underexplored area includes a minimum of 175 placer workings in various drainages throughout the project area. At the present time, the source of the gold in many of the drainages is unknown, leading to the potential of multiple discoveries on the property.

Previous drilling of the Josca vein system in the south end of the property suggested limited potential. However, road building for the proposed drilling program in 2011 has been extended and opened up access to the northern section of Sierra Rosario which hosts the potentially bulk mineable zones of precious metals.

Exploration of the San Rafael zone in the north part of Sierra Rosario has defined a 70-by-200 meter area of silicified and stockwork quartz veined rhyolite porphyry. This mineralized body has been sampled both underground and within road cuts. The initial sampling of underground workings and outcrops included 23 samples with average weights of 2.5 kg and ranged from three to seven metres in width, averaging five metres in width. An arithmetic average for the 23 samples worked out to 181 g/t silver and 0.32 g/t gold. In 2008, channel sampling along road cuts totaled 321 samples with continuous sampling along three meter intervals. Two continuous channel samples included 34.8 metres of 192 g/t silver and 27 metres of 91.8 g/t silver.

As well, several small underground mines, including La Descubriadora and Dulces Nombres, were discovered east of San Rafael during the work program. Both host manto-skarn base and precious metal mineralization. At Dulces Nombres, 35 chip samples from 1.5 to 3.0 metres in length averaged 0.71g/t gold, 263 g/t silver and 0.35% copper. At La Descubriadora, 19 chip samples of similar size taken underground averaged 0.40g/t gold and 83.7 g/t silver.

There has been no drilling documented for any of these mineralized occurrences in the northern part of Sierra Rosario.

ACM and INM will meet to design a joint exploration program for the 2011 exploration season after the notice to proceed is given to Sparton, the details of which will be publicly announced once the planning is completed and approved.

"The Sierra Rosario Property in Mexico is drill-ready and may host a bulk-tonnage mineable silver-gold deposit," said American Consolidated Minerals President, Al Fabbro. "In addition, there are several attractive polymetallic targets within the property that warrant further investigation. Furthermore, we are excited to be working with International Northair Mines as operator of the project that has proven and successful exploration experience in Mexico."

A. Lee Barker, P.Eng., P. Geo., President and CEO of Sparton Resources Inc., is the Qualified Person under National Instrument 43-101 for the Sierra Rosario project. Mr. Barker has prepared the technical information contained in this news release.

American Consolidated is dedicated to the principles of environmentally sound mining practices and believes that environmental stewardship and mining can co-exist.

For details on the Company and its properties, visit the Company's website at


Al Fabbro, President

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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