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Ground broken at Los Reyes Gold Project

Published by , Editorial Assistant
Global Mining Review,

Prime Mining Corp. has reported progress at its Los Reyes Gold-Silver Project in Sinaloa, Mexico. Following the closing of its US$8.7 million financing and subsequent call to trading, the company has recently completed a very successful round of site visits to Los Reyes which included attending formal meetings with local stakeholders, securing surface access and beginning site preparation and initial exploration.

On 3 September, Prime’s Executive Chairman Daniel Kunz, Chief Operating Officer Greg Liller and Vice President of Exploration Bruce Kienlen, visited Los Reyes and the nearby city of Cosala to expand relations with the local community and advance activities related to the project. The team met with the Cosala Municipal President, Griselda Quintana Garcia, and the President of the local Ejido Tasajera, Leobardo Arredondo Rivas. An Ejido is an area of land which community members collectively maintain communal holdings.

A General Meeting of the members of the Ejido Tasajera was held on 6 September, during which the membership voted unanimously in support of the development of Los Reyes and approved the immediate start of Prime’s site work.

Within 30 days, Prime will deliver a proposal to pay fees to the Ejido membership for the initial exploration and engineering phase and the planned production phase.

Executive Chairman Kunz said, “With over ten years of activity and presence in the Cosala area, I am able to provide Prime with valuable contacts maintained through key long-term relationships and we expect a positive outcome for the stakeholders and the project.”

COO Greg Liller commented, “I am very pleased with the success of our recent meetings with local government and community officials and the communal landowners of the Los Reyes project. We came away from these meetings with an overwhelming endorsement by the local community for our planned mine development. I would like to thank the members of the Ejido Tasajera, Sra. Griselda Quintana Garcia and Sr. Leobardo Arredondo Rivas for their support.”

On 9 September, heavy equipment was mobilised to immediately begin opening access roads and clearing historic drill roads. As part of the company’s efforts to maintain good community relations, Prime’s contractors were engaged to provide some needed repairs to the local community roads and minor infrastructure. Once the access roads to most of Los Reyes are cleared and rehabilitated, a surface exploration crew is set to begin sampling.

5000 m trenching and surface sampling programme begins

Prime crews have begun a systematic Phase 1 5000 m trenching and road cut sampling programme on outcropping mineralised structures. Over the many years of exploration at Los Reyes, with thousands of metres of drilling and ongoing geological and engineering studies, no company ever conducted systematic surface trenching across outcropping mineralisation. Prime’s trenching and existing drill road sampling programme is designed to provide valuable surface assay data to be used in conjunction with down dip drill data for our planned updated resource estimation.

Based on resource projection distances cited in Los Reyes technical reports, available on SEDAR, near and at-surface geologically modelled blocks are reported as waste in some instances and inferred in others. The current trenching programme will provide greater confidence in the conversion of these blocks to indicated resources for the upcoming resource estimate. These historic technical reports and data identify several structures with no drill holes that are within or near the hanging walls of planned open pits. These structures will also be systematically sampled in order to establish their potential to affect project economics.

Grant of incentive stock options

Prime has reserved for grant 5 000 000 incentive stock options, exercisable at a price of US$0.40 for 5 years from the date of grant. The incentive stock options will be granted to directors, officers and consultants of the company in accordance with the company's 10% rolling stock option plan.

Loan repayment

Prime also announces that it has repaid the outstanding indebtedness owing to each of George Dengin and Perfect Storm Holdings Ltd, and totalling US$1 065 600 as of the date of repayment. Funds were advanced by the Lenders to fund a deposit owing to Minera Alamos Inc. in connection with the acquisition of an interest in Los Reyes. The company elected to complete the early repayment of the indebtedness in order to reduce ongoing interest expenses. The company remains indebted to Andrew Bowering, CEO, in connection with funds advanced at the same time as the Lenders.

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