Continental Precious Minerals Inc.
TSX : CZQ

Continental Precious Minerals Inc.

August 28, 2007 18:24 ET

Continental Precious Minerals Inc.: Updated Inferred Resource Estimate on MMS Viken Licence-232 Million Pounds of Uranium Oxide

TORONTO, ONTARIO--(Marketwire - Aug. 28, 2007) - Further to the news releases issued by Continental Precious Minerals Inc. (TSX:CZQ) (the "Company" or "Continental") on May 10, 2007 and subsequently respecting the Company's 100% owned multi-metal sediment ("MMS") Viken mineral exploration licence ("MMS Viken Licence") in Sweden, Gerald A. Harron ("Harron") of G.A. Harron & Associates Inc., Eugene Puritch of P&E Mining Consultants Inc. and Fred Brown of FHB Consulting Services Inc., each a "qualified person" within the meaning of National Instrument 43-101, have updated the resource estimate as of today for the MMS Viken Licence contained in Harron's report of June 22, 2007. An updated National Instrument 43-101 compliant technical report is expected to be filed on SEDAR tomorrow and available under the Company's profile at www.sedar.com.

The updated inferred resource estimate, as summarized in the table below, is more than a threefold increase to Harron's prior resource estimate for the MMS Viken Licence, with slightly lower grades for each of the four metals:



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Metal/ Grade Grade (%) Tons Quantity (lbs)
Oxide (lbs/ton)
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U3O8 0.34 lbs/ton 0.017 % 685,242,000 232,982,280
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Ni 0.61 lbs/ton 0.030 % 685,242,000 417,997,620
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V2O5 5.83 lbs/ton 0.290 % 685,242,000 3,994,960,860
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MoO3 0.73 lbs/ton 0.036 % 685,242,000 500,226,660
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The drill information used for the inferred resource estimate pertains to approximately 40% of the MMS Viken Licence area.

All of the uranium mineralization is sedimentary in nature and is hosted in the Alum Shale Formation ("Alum Shale"), a Middle Cambrian to earliest Ordovician black shale lithostratigraphic unit that extends throughout Scandinavia. Generally the unit is 20 metres thick, and in the MMS Viken Licence area tectonic repetition has increased the thickness to approximately 200 metres in thickness. The deposits sub-outcrop beneath variable thicknesses of glacial deposits of up to 9 metres thick.

Uranium mineralization is generally more abundant and uniformly distributed in the Upper Cambrian facies of the Alum Shale, with slightly lesser amounts in the Middle Cambrian. Moreover, higher uranium contents are associated with organic carbon contents greater than about 10%. The high organic content facies of Alum Shale has a shiny to lustrous black colour resembling anthracite riddled with millimetre to centimetre thick calcite and pyrite veinlets. The primary uranium minerals are micron sized uraninite and coffinite that appear to be bonded to clay minerals and organic carbon. The other metals are presumed to occur as organo-metallic complexes or oxides bonded to clay minerals.

The MMS Viken Licence is considered to be advanced stage exploration, as grid drilling continues in order to define a deposit suitable for open pit exploitation. Historical work on the property consists of reconnaissance style diamond drilling carried out in the late 1970's by the Sveriges Geologiska Undersokning or the Geological Survey of Sweden (the "SGU"). Diamond drill hole Myrviken 78-005 (by SGU) is located on the property. Assays from this vertical hole record a 194.77 metre true thickness intersection grading 0.41 pounds U3O8 per ton (173 ppm U), which provides the impetus for exploration at this site.

Harron visited the property on March 26 and 27, 2007, at which time drill cores were examined and sampling protocols reviewed at Geoforum Scandinavia AB's core handling facility.

A major component of the QA/QC program on the MMS Viken Licence consisted of drilling hole Myr 06-002, 25 metres south of historical drill hole Myrviken 78-005 and analyzing the core. The results show excellent correlation for both spatial distribution and absolute values for uranium. For QA/QC purposes, every 25th sample was sent to a second laboratory for re-analysis. Analyses were performed by ALS Chemex in Ojebyn and ALS Analytica in Lulea, Sweden. The correlation between six original and second assay of the same pulp is 96.8% for uranium indicating no significant analytical problems.

Inter-laboratory accuracy was also explored because two laboratories were used to generate analytical results. A total of 128 samples were analyzed at each laboratory. The resultant data indicates no significant bias exists for U3O8 and V2O5 values. A significant bias exists however for MoO3 (10.5%) and Ni values (45.2%). Accordingly, approximately 20% of the data for MoO3 and Ni sent to one laboratory may need to be re-analysed prior to a preliminary feasibility study.

Core samples were two metres long or shorter where constrained by lithologic contacts. Sample lengths are approximately true widths. All samples sent for analyses were prepared using a jaw crusher, which was cleaned with compressed air between samples. A 250 gram split of the crushed sample with 70% passing through a 9 mesh screen was pulverized with 85% passing through a 200 mesh screen. A four acid sample digestion allows complete digestion of the elements of interest, followed by a combination of ICP-MS (inductively coupled plasma mass spectroscopy) and ICP-AES (inductively coupled plasma atomic emission spectrophotometry) determination techniques. Total carbon was determined by a Leco furnace and the inorganic carbon was analysed by a Coulometer.

The methodology used by the consultants to estimate the inferred resource involved generating a three dimensional geological model based on 25 metre cross sections with the mineralization constrained to the Alum Shale lithology. Two metre long composite samples were created for U, V, Mo and Ni expressed as ppm concentrations. Grade capping was applied to the metal concentrations in order to reduce the impact of high-grade outlier values during block interpretation. Grade continuity was examined via variography suggesting that the optimal drill hole spacing is a 100 metre grid drilling. A bulk density of 2.51 t/m3 was assumed for all lithologic units.

Three-dimensional modelling methods were used in accordance with principles meeting Canadian Institute of Mining, and Metallurgy Guidelines. Blocks measured 25 metres by 25 metres in plan by 10 metre vertical. An NSR grade-element was calculated based on the U, V, Mo and Ni block values using the parameters listed in the following table.


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Mo Ni U V
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Price US$25.00/lb US$12.00/lb US$55.00/lb US$5.00/lb
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Recovery 15% 66% 90% 65%
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Block grades were estimated with a single pass Inverse Distance Cubed calculation. A reasonable continuity of grade across the Alum Shale is demonstrated by the drill holes. However due to the complex geological model, limited number of drill holes and lack of density and collar survey information, the resource has been classified as an inferred resource (within the meaning of Canadian Institute of Mining and Metallurgy Guidelines) in its entirety. Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as reserves.

For this resource estimate a break-even cut off of US$7.50 was selected based on a general knowledge of mining costs. The global resource estimate is defined by those blocks falling within a Whittle optimized pit derived from applying the cut-off NSR value and a 50 degrees slope for the pit. Following this procedure the grades for U, V and Mo were then converted to standardized oxide units for reporting purposes.

Gerald Harron P. Eng. of G.A. Harron & Associates Inc., a qualified person under National Instrument 43-101, is responsible for the technical disclosure contained in this news release.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements regarding the Company's expectation that an updated technical report supporting the disclosure contained in this news release will be completed and filed tomorrow. The inferred resource estimate contained in this news release is an estimate only and is not equivalent to reserves and does not mean that the mineral resource can be economically mined. Actual developments may differ materially from those contemplated by these statements depending upon, among other things, there not being any unanticipated difficulties in completing the updated technical report, there not being a change to Swedish mining laws, there not being an adverse decision of regulators or public or environmental opposition as well as those factors discussed in the Company's disclosure documents filed on SEDAR at www.sedar.com. The forward looking statements contained in this news release represent the Company's views and expectations as of the date of this release and should not be relied upon as representing its views and expectations at any subsequent date.

Contact Information

  • Continental Precious Minerals Inc.
    Ed Godin
    President
    (416) 805-3036