18.11.2004 – 21:04
First Majestic Resource Corp. - Acquisition of the Dios Padre Silver Mine, Mexico
Vancouver, November 18 (ots/PRNewswire)
TSX Venture Exchange - FR
Pink Sheets - FMJRF
The Company is pleased to announce that it has signed a Letter Agreement with Exploraciones El Rey, S. A. de C.V. and B. J. Kennemur for the purchase of the Dios Padre Silver Mine located in the Eastern Sierra Madre Mountain range about midway between Hermosillo and Chihuahua in east central Sonora Mexico. The purchase includes all properties, assets and equipment and all mining concessions consisting of 285 hectares.
The previous and or historic reserve and resource estimates for the Dios Padre Mine vary significantly due to the nature of the work completed and the availability and access to underground sections of the mine. The reader is cautioned that the estimation does not conform to National Instrument 43-101 requirements for reporting reserves and resources. The Company is not treating these historic or previous estimates as current resources. These resource estimates should not be relied upon until they have been verified by the Company's final due diligence program and reviewed by the Company's 'Qualified Person'. As stated in the most recent report known by the Company, dated December 2002, published by David A. Bending, M.Sc., P.Geo of Reno, Nevada; using a conservative resource model focusing on resources in the accessible upper levels of the mine, 3,500,000 tonnes grading 465 g/t containing 57,211,000 ounces of silver has been estimated which appears to be amenable to open pit mining. It also appears by reviewing this and other reports on the Dios Padre Silver Mine the ore responds well to conventional milling and flotation. The on-sight mill appears to have yielded historic recoveries of up to 87% silver.
The Company has agreed to pay a purchase price of US$6,500,000 for the Dios Padre Silver Mine payable over a period of thirty six months. In addition, the Company has agreed to issue 500,000 common shares to the vendors. A final due-diligence program will commence immediately and is expected to be completed within six months. All the legal formalities and formal documentation is anticipated to be completed within the same time frame. An initial payment of US$300,000 has been paid. The payment schedule is as follows; Upon completion of final due-diligence and regulatory approvals, closing will take place and a payment of US$450,000 and issuance of 500,000 common shares will be paid; 6th month anniversary US$500,000; 12th month anniversary US$500,000; 18th month anniversary US$500,000; 24th anniversary US$1,000,000; 30th month anniversary US$1,250,000; and on the 36th a final payment of US$2,000,000. In addition, the Company has agreed to issue to the vendors an additional 500,000 common shares if an independent technical report from a qualified international recognized engineering or geological consulting firm confirms that the proven, probable or indicated reserves contained within the Dios Padre concessions exceeds 50,000,000 ounces of silver.
The Dios Padre is a high grade epithermal silver-lead deposit with limited production data. Reports supplied to the Company from the vendor state mining commenced in the 17th century and continued very intermittently from 1860 to 1910, 1923, 1946 to 1947, and 1962 to 1966. Some estimates of tonnage and grade mined during these periods has been made, however, collectively it is difficult to summarize total ore and grade mined to date. In addition to the main Dios Padre claim, this agreement covers two additional contiguous claims that show good potential for high grade disseminated and vein deposits of silver.
The Dios Padre Silver Mine can be reached via a 25 km gravel road north of highway 16 which is 220 km west of Hermosillo. The mine is located outside the small town of Real de La Trinidad.
Management is very excited by this opportunity to acquire an asset of this potential size and thus will work diligently to close this transaction in a timely manner. The Company's objective is to proceed as rapidly as possible in order to bring the Dios Padre into production.
The purchase of the Dios Padre Silver Mine is subject to completion of satisfactory due-diligence, receipt of any necessary regulatory approvals and formal purchase documentation.
FIRST MAJESTIC RESOURCE CORP.
Keith Neumeyer President
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Resource Corp. 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.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and the TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release
ots Originaltext: First Majestic Resource Corp.
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For further information: FIRST MAJESTIC RESOURCE CORP., Suite 1480 -
885 West Georgia Street, Vancouver, BC, Canada V6C 3E8, Telephone:
+1-604-688-3033, Fax: +1-604-601-2010, Web site:
www.firstmajestic.com, E-mail: firstname.lastname@example.org