Medinah Minerals, Inc. (MDMN: OTC Link) | Shareholder Update

OTC

Shareholder Update – May 3, 2012

May 03, 2012

OTC Disclosure News Service

Las Vegas, NV –

MEDINAH MINERALS, INC.
Las dos Marias Property Update

May 3, 2012

 

 

Medinah Minerals Directors are pleased to report that a significant update has been received from Compañia Minera LDM Chile concerning the Las dos Marias project in Chile, including the new discovery vein.

 

Medinah Minerals (Chile) S.A. is the owner of the Las dos Marias claims 1-30 at an elevation of 1,400 to 1,500 meters, encompassing 130 hectares in total area, and geographically located on the headwaters of Quebrada Durazno River on the northwest slope of the Alto de Lipangue plateau. Further, it lies approximately three (3) kilometers from the highly impressive breccia discoveries on the Gordon claims which are an integral part of the Alto de Lipangue group of claims 100% owned by Medinah Minerals (Chile) S.A.

 

There is a rich history of gold mining in this region going back to the Inca natives, followed by Spanish explorers. The Las dos Marias properties contain several old working sites associated with these early explorers and also sites from more recent gold discoveries. These sites contained small veins to stringers which were expressed as surface outcrops of gold bearing quartz. These were mined by working in on these leads and recovering what gold was available. Many of these old workings contained massive arseno-pyrite mineralization which was dumped as waste and is still stockpiled as many tons of valued gold reserves. These dumps run 5+ grams of gold per ton and higher in places. Arseno–pyrite is well known for its association with gold, but was difficult to separate until the advent of modern gold recovery techniques.

 

During a diamond drilling program in 1999, Medinah Minerals (Chile) S.A. personnel discovered a large gold bearing quartz vein at the 67- to 69-meter depth of the drill core. This drill core material delivered spectacular gold assays.

 

Exploration was carried out under the supervision of A.C.A. Howe International, Gordon House P. Geo., and Paul Jones, Mining Engineer with DM 99-02 encountering a significant high-grade gold intercept at the 68-meter depth.  Specific assay values are reported as follows:

 


A.C.A. Howe International re-sampled these sections and reported as follows:

 

“Note: one extremely high-grade, 2-meter interval with individual samples yielding 61.77 and 122.2 grams gold/tonne, respectively was returned from DM 99-02 between 68 and 70 meters.  A.C.A. Howe re-assays of the secondary sample in this interval yielded 455 grams gold/tonne across 1 meter, indicating the probable nugget nature of the gold mineralization in this interval.”

 

Paul Jones, Mining Engineer, submitted a follow-up mining/exploration program for
DM 99-02 that proposed sinking a shaft to the high-grade intercept to extract an estimated $1.4 million average gold containment at that location. This estimate was based on $380 per ounce gold prices.  With current prices at $1,600 per ounce, the dollar value of this projected gold recovery has been significantly enhanced.

 

Paul Jones based his estimated gold recovery values on a zone in the quartz vein
15 meters long by 35 meters vertically.

 

Medinah Minerals (Chile) S.A. has recently contracted with a private company – Compañia Minera LDM Chile – as previously announced, to follow Jones’ advice.  Instead of sinking just a shaft, the Company has chosen to proceed with a preferred plan of driving an adit (tunnel) in the side of the mountain app. 40 meters below the top of the plateau.  This is designed to intercept the gold-bearing veins.  During adit construction, the crew discovered a 2-meter wide vein heavily mineralized just below surface where the excavator was digging foundations for the adit entrance. This appears to be similar to the veins that were intercepted at DD 99-01 and DD 99-02.

 

Our Company Geologist has sampled the vein and reports that visible gold is apparent. Assays are pending and will be released as soon as they are received.  The excavator has dug into the vein more than 8 meters in depth at the time of writing and has also broken through into several old Spanish tunnels that were following associated quartz stringers.

 

Our Company Geologist has determined the strike and dip of this vein and, as it follows the shear structure found at DD99-02, he has reached the conclusion that it is indeed the target vein. We had hoped to intercept the vein before the location of DD 99-02, but to discover it coming right through to the side of the mountain significantly increases the potential gold reserves in place. Paul Jones based his projections on a 15 meter long vein by 35 meters vertically.  The vein has been discovered 185 meters out from the drill site and the shear zone appears to continue across Las dos Marias. This confirms the competency, consistency and strength of this vein and it is possible that the vein could extend within the shear zone the entire width of the Las dos Marias property carrying with it the consistency of the gold discovered at DD 99-02 and the intercept at base camp. All of the prior estimates are no longer valid and values will have to be re-calculated to include this expansive new discovery.

 

As reported earlier, new access roads have been upgraded and completed to handle larger 20 ton ore trucks, which are shortly to start trucking ore directly to the Enami refinery and other processing plants.  As the claims are situated at the 1,400 to 1,500 meter levels, winter snows are not a problem.

 

Medinah Minerals (Chile) S.A. provides the following clarification of the ownership and profit interest structure created to exploit the Las dos Marias high-grade vein that is now assumed to extend at least 200 meters into the Las dos Marias group of claims.

 


The ownership of the high-grade vein has been sold to a privately funded company, Compañia Minera LDM Chile, for the purpose of extracting the ore and exploring the extent of the vein system carrying the high-grade gold intercepted in DDH 99-01 and DDH 99-02.  Included in the ownership is Medinah Minerals (Chile) S.A. that retains 20% of this single property contained within the Las dos Marias group of properties.  In addition, Medinah Minerals (Chile) S.A. receives a 30% net profits interest in the profits produced from this property without any capital requirements.  The property containing the high-grade structure is known as the Los Amigos 1, registered 132020088-18.  The agreement covers all ore recovered from this high-grade vein and from the full extent of this vein as far as it extends within the boundaries of the Las dos Marias group of claims.  Ores that exist outside of this vein structure are not included in this agreement and can be mined separately by Medinah Minerals (Chile) S.A. on the remaining Los Amigos claims.

 

There are a total of 10 claims in the Las dos Marias group.  No claims other than the Los Amigos 1 are included in this transaction.  Medinah Minerals (Chile) S.A. does not have any capital overlay as it is entirely funded by Compañia Minera LDM Chile.

 

Medinah Minerals (Chile) S.A. retains 100% ownership in all other claims and 100% of the gold and copper deposits contained within formations other than this high-grade vein structure.

 

It has now been determined that it is economical to ship ore containing a minimum of
5 grams of gold per tonne, directly to the Enami refinery.  A new mill and concentrator unit is being set up at the base of the plateau for the purpose of custom processing local miners.  This could increase the profitability of this operation as it is much closer than the Emani plant. 

 

Assays on the recent discover vein, extensions thereof, and mined ore, are awaited and will be published.  Mining development continues with two shifts per day and crews housed in the on-site camp.

 

Juan José Quijano Fernández

 

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

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