Item 1. Description of Business
Forward-Looking
Statements
The statements in this annual report that are not reported
financial results or other historical information are forward-looking
statements within the meaning of the
Private Securities Litigation Reform
Act of 1995
, as amended. These statements appear in a number of different
places in this report and can be identified by words such as estimates,
projects, expects, intends, believes, plans, or their negatives or
other comparable words. Also look for discussions of strategy that involve risks
and uncertainties. Forward-looking statements include, among others, statements
regarding our business plans and availability of financing for our business.
You are cautioned that any such forward-looking statements are
not guarantees and may involve risks and uncertainties. Our actual results may
differ materially from those in the forward-looking statements due to risks
facing us or due to actual facts differing from the assumptions underlying our
estimates. Some of these risks and assumptions include those set forth in
reports and other documents we have filed with or furnished to the United States
Securities and Exchange Commission (SEC). We advise you that these cautionary
remarks expressly qualify in their entirety all forward-looking statements
attributable to us or persons acting on our behalf. Unless required by law, we
do not assume any obligation to update forward-looking statements based on
unanticipated events or changed expectations. However, you should carefully
review the reports and other documents we file from time to time with the
SEC.
Presentation of Information
As used in this annual report, the terms "we", "us", "our" and
the Company mean Tierra Grande Resources Inc. and its subsidiaries, unless the
context requires otherwise.
All dollar amounts in this annual report refer to US dollars
unless otherwise indicated.
Overview
We were incorporated as a Nevada company on April 4, 2006. We
have been engaged in the acquisition and exploration of mineral properties since
our inception. We have not generated any revenues and have incurred losses since
inception.
We currently own a 100% interest in the Dome mineral
properties, located in the Province of British Columbia, Canada. In addition, we
own a 100% interest in two mineral properties (known as the Byng and Tramp
claims) also located in the Province of British Columbia, Canada. We owned an
option to acquire a 100% interest in the Lady Ermalina mineral properties,
located in the Province of British Columbia, Canada, which has expired. As the
Byng and Tramp claims are located adjacent to the Lady Ermalina claims, we plan
to dispose of our interest in these properties going forward. We have conducted
limited exploration work on our mineral properties and none of our properties
has been determined to contain any mineral resources or reserves of any kind.
The following table sets forth information relating to our
material mineral properties:
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Name of Property
|
Location
|
Nature of Interest
|
Status
|
Dome Claims
|
Beaverdell Area, Greenwood Mining Division in
British Columbia, Canada
|
100% interest.
|
Exploration permit has been obtained.
|
Our strategy is to identify, acquire and develop assets that
present near term cash-flow opportunities with the emphasis on creating early
cash flow to enable our company to consider other corporate opportunities.
We continue reviewing what we believe to be opportunities with
potential in Peru, South America through our strategic alliance with ExploAndes
S.A.C. (ExploAndes). ExploAndes is a leading firm of geology consultants and
project logistics managers located in Peru assisting in the identification,
assessment and development of projects in South America. ExploAndes has a proven
track record of delivering professional services to the South American mining
industry from mineral project review and assessment to project management.
We expect our strategic alliance with ExploAndes to lead to
potential opportunities in South America in line with our strategy. In that
regard, in February 2013, we acquired all of the outstanding shares of Tierra
Grande Resources S.A.C., a Peruvian company, through which we plan to conduct
operations in South America.
In July 2013, we entered into a Letter of Intent to acquire the
Buldibuyo Gold Project in Peru. The Buldibuyo Gold Project offers us the
opportunity to deliver near term gold production and cash flow. It is our
intention to acquire 100% of the gold project, which has produced high grade ore
in the past. With support from our strategic relationships and personnel in
Peru, we are currently engaged in due diligence to qualify future expectations
and timelines.
We have also entered a strategic alliance with Mining Plus Pty
Ltd (Mining Plus), a leading firm of mining and geoscience consultants with
offices in Australia, Canada and Peru, to assist in the identification,
assessment and development of projects. We expect the alliance with Mining Plus
to lead to other potential opportunities in line with our strategy. Via the
strategic alliance with Mining Plus, we have ready access to over 50 seasoned
mining industry professionals to assist in the potential development of
projects.
Our plan of operations for the next 12 months is to continue to
seek out, acquire, explore and potentially develop projects with an emphasis on
creating early cash flow for our business, whether by way of acquisition of full
ownership, joint venture or other acceptable structure. We also plan to dispose
of the Byng and Tramp claims and may conduct a small exploration project on our
Dome mineral claims. We anticipate we will require approximately $5 million to
carry out our plans over the next 12 months. As at May 31, 2013, we had cash of
$39,983 and working capital of $36,400 and will require significant financing to
pursue our exploration plans. There can be no assurance that we will obtain the
required financing, on terms acceptable to us or at all. In the event we are
unable to obtain the required financing, our business may fail. An investment in
our securities involves significant risks and you could lose your entire
investment.
Development of Business
We were incorporated under the laws of the State of Nevada in
April 2006.
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On January 29, 2010, we entered into an option agreement (the
Lady Ermalina Option Agreement) with Argus Metals Corp. (Argus) in relation
to three mining claims known as the Lady Ermalina Chemainus Claims located on
Vancouver Island, British Columbia, Canada (the Lady Ermalina Property).
Pursuant to the Lady Ermalina Option Agreement, we agreed to
issue an aggregate of 1,500 shares of our common stock and to pay an aggregate
of $5,000 in cash in consideration for the grant of the sole and exclusive right
and option to acquire a 100% undivided interest in the Lady Ermalina Property.
Further, we agreed to incur not less than $600,000 in expenditures related to
exploration and development on the Lady Ermalina Property before January 6,
2012. We issued 250 shares to Argus under the Lady Ermalina Option Agreement in
February 2010. The option agreement has expired and we no longer have an
interest in these claims.
On July 9, 2010, we received stockholder approval to effect a
one-for-four hundred reverse stock split of our issued and outstanding common
stock, which would take effect upon FINRA approval. The number of shares that we
are authorized to issue did not change as a result of the reverse stock split.
On July 22, 2010, we received approval from FINRA and the reverse stock split
took effect on July 23, 2010.
On August 23, 2010, 0887717 B.C. Ltd. (0887717), our
wholly-owned subsidiary which we incorporated in British Columbia, Canada on
August 9, 2010, entered into an option agreement (the Dome Option Agreement)
with Murray Scott Morrison, pursuant to which 0887717 had the right to acquire
100% interest in the mineral property known as the Dome Claim Group located on
Mount Vallace in the Beaverdell Area, Greenwood Mining Division in the Province
of British Columbia, Canada (the Dome Property).
In accordance with the provisions of the Dome Option Agreement,
0887717 paid $5,000 to Mr. Morrison on the date of the agreement, was required
to incur not less than $10,000 in expenditures related to exploration and
development on the Dome Property prior to September 30, 2010 (incurred) and was
required to pay $1,000 to Mr. Morrison on or before November 30, 2010 (paid).
Pursuant to the terms of the Dome Option Agreement, 0887717 granted to Mr.
Morrison stock options (the Stock Options) to purchase up to 10% of its total
issued and outstanding share capital at a total price of $1.00, which may be
exercised when a probable mineral reserve is discovered on the property. The
Stock Options expired 36 months after the date of the Dome Option Agreement.
In October 2010, we changed our independent auditors from
Manning Elliott LLP to MaloneBailey, LLP. See our Current Report on Form 8-K
filed with the SEC on October 13, 2010 for more information.
In December 2010, we completed the sale of 15,000,000 units at
a price of $0.01 per unit, with each unit comprised of one share of common stock
and one-half of one common stock purchase warrant, with each full warrant
exercisable at a price of $0.10 per share for 12 months, for gross proceeds of
$150,000, to an investor resident in Australia that acquired the securities for
investment purposes. This represented a change-in-control of our Company. In
connection with the offering, we appointed Simon Eley as a director of our
company. Mr. Eley is a director of the investor in the private placement and was
appointed as a director of our company as a result of the investment.
In December 2010, the holders of a majority of our issued and
outstanding common stock approved an amendment to our bylaws to make them more
comprehensive, as well as an increase in our authorized capital from 80,000,000
shares of common stock, par value $0.0001, to 300,000,000 shares of common stock, par value
$0.0001 to better position us to attract financing. The number of shares of
preferred stock we are authorized to issue did not change as a result of the
authorized capital Increase.
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In February 2011, we completed the sale of 35,000,000 units at
a price of $0.01 per unit, with each unit comprised of one share of common stock
and one-half of one common stock purchase warrant, with each full warrant
exercisable at a price of $0.10 per share for 12 months, for gross proceeds of
$350,000, to certain off-shore investors that acquired the securities for
investment purposes.
In April 2011, we and Christopher Robin Relph, our President
and Chief Executive Officer, mutually agreed to the termination of the
management agreement between us and Mr. Relph, effective December 1, 2010
pursuant to the terms of the management agreement. Under the terms of the
management agreement, Mr. Relph had agreed to act as our principal officer in
consideration of a salary of $20,000 per month. We have agreed to pay Mr. Relph
CDN$24,000 for his services for the quarter ended February 28, 2011 and to pay
Mr. Relph CDN$8,000 per month for his services going forward. No early
termination penalties were incurred as a result of the termination of the
Management Agreement. Mr. Relph resigned as a director and officer of our
company in September 2012.
Effective April 18, 2011, we completed the conversion of an
aggregate of approximately $66,332 in debt owed by us to six offshore lenders
into shares of our common stock at a price of $0.01 per share. As a result, we
issued an aggregate of 6,633,200 shares of our common stock to the six
lenders.
In September 2011, we acquired title to the Byng and Tramp
mining claims adjacent to our Lady Ermalina claims in consideration for 150,000
shares of our common stock. As the Byng and Tramp claims are located adjacent to
the Lady Ermalina claims in which our interest has expired, we plan to dispose
of our interest in the Byng and Tramp properties going forward.
In September 2011, we appointed Simon Eley, a director of our
company, as our President and Chief Executive Officer, in place of Christopher
Robin Relph. Mr. Relph, a director of our company at the time, was appointed as
Chairman of our board of directors. Mr. Relph resigned as a director and officer
of our company in September 2012.
In September 2011, we acquired all rights, title and interest
in and to the domain name Buckingham.com and related property rights,
including all intellectual property rights and rights related to website and
internet traffic associated with the domain name, from Mr. Relph for
consideration of $10,000.
In October 2011, we raised capital of $715,000 by issuing
14,300,000 shares of common stock at a price of $0.05 per share primarily to
off-shore investors.
In December 2011, we extended the exercise period for our
outstanding warrants to February 11, 2013. In January 2013, we further extended
the exercise period for our outstanding warrants to February 11, 2014. All other
terms of the warrants remain the same, including the exercise price of the
warrants of $0.10 per share.
In January 2012, we entered into a Strategic Alliance Agreement
with Mining Plus to assist in the identification, assessment and development of
mining projects, with an emphasis to potentially create early cash flow enabling
us to develop and grow our project pipeline. Under the terms of the Strategic
Alliance Agreement, we appointed Benjamin Auld, a director of Mining Plus, as a
director of our company. In connection with his appointment, we issued 500,000 restricted shares of common stock to Mr. Auld as a
one-time incentive for joining our board of directors and other contributions to
date.
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In May 2012, we raised further capital of $431,777 by issuing
4,317,776 shares of common stock at a price of $0.10 per share to certain
off-shore investors.
In July 2012, we entered into a Strategic Alliance Agreement
with ExploAndes to assist in the identification, assessment and development of
mining projects in South America, with an emphasis to potentially create early
cash flow enabling us to develop and grow our project pipeline.
In July 2012, we issued an aggregate of 2,750,000 shares of
common stock to certain of our directors, officers and employees as compensation
for services rendered to us from January 1, 2012 to June 30, 2012 to conserve
capital.
In August 2012, Benjamin Auld resigned as a director of our
company for personal reasons. We expect to continue working with Mr. Auld as a
director of Mining Plus.
In September 2012, Christopher Robin Relph resigned as a
director and the Chairman and Chief Financial Officer of our company and we
appointed Simon Eley, our current President and Chief Executive Officer, as
interim Chief Financial Officer. In December 2012, we appointed Allister Blyth
as our Chief Financial Officer. Mr. Blyth is a Certified Practicing Accountant
in Australia with over 10 years of experience with both the public and private
companies and specializes in financial management, reporting and strategic
corporate planning.
In February 2013, we appointed Andrew Gasmier as a director of
our company. Mr. Gasmier has extensive experience in the assessment, evaluation
and feasibility of mineral projects throughout the globe.
In April 2013, we (i) completed our name change to Tierra
Grande Resources Inc. and our ticker symbol changed to TGRI, (ii) increased
the number of authorized shares of our common stock to 500 million shares, and
(iii) adopted a stock incentive plan. See our Schedule 14C filed with the SEC on
March 18, 2013 for more information relating to these corporate actions.
In May 2013, we appointed Brad Evans as a director of our
company. Mr Evans has been the General Manager of Mining Plus Pty Ltd., for the
past five years and has more than 15 years of experience in the mining industry
in a diverse range of roles, from production, planning and management of mine
sites, to organizational leadership.
In June 2013, we appointed Mark Kalajzich as President and
Chief Executive Officer of our company in place of Simon Eley. Mr. Eley was
appointed as Chairman of our company. Mr. Kalajzich has held senior executive
roles in the Telecommunications, Workforce Management and Finance sectors in
Australia and Asia over the past decade, has substantial global resources and
commodities experience in equity capital markets and has been heavily involved
in the operation and listing of resource companies for the past 2 years.
In line with our plans, we expect to appoint additional
directors and officers to manage our growth going forward.
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Subsidiaries
We currently have two wholly-owned subsidiaries, 0887717 BC
Ltd. which is incorporated under the laws of the Province of British Columbia,
Canada, and Tierra Grande Resources SAC which is incorporated in Peru.
Competition
We are an exploration stage mineral resource exploration
company that competes with other mineral resource exploration companies for
financing and for the acquisition of new mineral properties. Many of the mineral
resource exploration companies with whom we compete have greater financial and
technical resources than those available to us. Accordingly, these competitors
may be able to spend greater amounts on acquisitions of mineral properties of
merit, on exploration of their mineral properties and on development of their
mineral properties. In addition, they may be able to afford more geological
expertise in the targeting and exploration of mineral properties. This
competition could result in competitors having mineral properties of greater
quality and interest to prospective investors who may finance additional
exploration and development. This competition could adversely impact on our
ability to achieve the financing necessary for us to conduct further exploration
of our mineral properties. We also compete with other mineral exploration
companies for financing from a limited number of investors that are prepared to
make investments in mineral exploration companies. The presence of competing
mineral exploration companies may impact on our ability to raise additional
capital in order to fund our exploration programs if investors are of the view
that investments in competitors are more attractive based on the merit of the
mineral properties under investigation and the price of the investment offered
to investors. We also compete with other mineral companies for available
resources, including, but not limited to, professional geologists, camp staff,
mineral exploration supplies and drill rigs.
Intellectual Property
We currently do not own any intellectual property other than
copyright in the contents of a website, www.buckingham.com.
Research and Development Expenditures
We have not engaged in any research and development activities
since our inception.
Environmental Laws
Mineral resource exploration, production and related operations
are subject to extensive rules and regulations of federal, provincial, state and
local agencies. Failure to comply with these rules and regulations can result in
substantial penalties. Our cost of doing business may be affected by the
regulatory burden on the mineral industry. Although we intend to substantially
comply with all applicable laws and regulations, because these rules and
regulations frequently are amended or interpreted, we cannot predict the future
cost or impact of complying with these laws.
Environmental enforcement efforts with respect to mineral
operations have increased over the years, and it is possible that regulations
could expand and have a greater impact on future mineral exploration operations.
Although our management intends to comply with all legislation and/or actions of
local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to
penalties, fines and regulatory actions, the costs of which could materially
adversely affect our results of operations and financial condition. We cannot be
sure that our proposed business operations will not violate environmental laws
in the future.
7
Our operations and properties are subject to extensive federal,
state, provincial and local laws and regulations relating to environmental
protection, including the generation, storage, handling, emission,
transportation and discharge of materials into the environment, and relating to
safety and health. These laws and regulations may (i) require the acquisition of
a permit or other authorization before exploration commences, (ii) restrict the
types, quantities and concentration of various substances that can be released
in the environment in connection with exploration activities, (iii) limit or
prohibit mineral exploration on certain lands lying within wilderness, wetlands
and other protected areas, (iv) require remedial measures to mitigate pollution
from former operations and (v) impose substantial liabilities for pollution
resulting from our proposed operations.
There are no costs to us at the present time in connection with
compliance with environmental laws. However, since we do anticipate engaging in
natural resource projects, these costs could occur and any significant liability
could materially adversely affect our business, financial condition and results
of operations.
Employees
We have three part time employees, in addition to our officers.
We do not intend to hire any other employees until our financial condition
improves.
Item 2. Properties
Our head office is currently located at Cnr Stirling Hwy &
Fairlight St., Mosman Park, Western Australia 6012 Australia from where we
oversee our business activities. We currently do not pay any costs for use of
these premises.
Dome Claim Group Property
On August 23, 2010, through our wholly owned subsidiary 0887717
B.C. Ltd., we entered into the Dome Option Agreement, pursuant to which we
acquired a 100% interest in mining claims known as Dome Claim Group located on
Mount Vallace in Beaverdell Area, Greenwood Mining Division in British Columbia,
Canada.
Location
Figures 1 and 2: Location of the Dome Claims in Beaverdel
Area, British Columbia.
8
9
Ownership Interest
On August 23, 2010, 0887717 B.C. Ltd., our wholly owned
subsidiary, entered into the Dome Option Agreement with Murray Scott Morrison,
pursuant to which 0887717 acquired a 100% interest in the mineral property known
as the Dome Claim Group located on Mount Vallace in the Beaverdell Area,
Greenwood Mining Division in the Province of British Columbia, Canada.
In accordance with the provisions of the Dome Option Agreement,
0887717 paid $5,000 to Mr. Morrison on the date of the agreement, was required
to incur not less than $10,000 in expenditures related to exploration and
development on the Dome Property prior to September 30, 2010 (incurred) and was
required to pay $1,000 to Mr. Morrison on or before November 30, 2010 (paid).
Pursuant to the terms of the Dome Option Agreement, 0887717 granted to Mr.
Morrison Stock Options to purchase up to 10% of its total issued and outstanding
share capital at a total price of $1.00, which may be exercised when a probable
mineral reserve is discovered on the property. The Stock Options expire 36
months after the date of the Dome Option Agreement.
History of Operations
The Dome property is comprised of sixteen mineral claims
covering approximately 360 hectares (890 acres), located four (4) kilometreres
southeast of Beaverdell, B.C. in the heart of the historic Beaverdell Mining
Camp. The Dome mineral claims cover the historic workings of the Nepanee
prospect that, according to the B. C. Minister of Mines Annual Reports, was
worked intermittently between 1904 to 1935. In more recent years, sulphide
mineralization including galena and sphalerite has been located near the old
workings. The property is accessible by logging roads.
Present Condition of the Property and Current State of
Exploration
No material exploration work has been carried out on the Dome
Property. A sampling and drilling program was conducted in 1989, however the
property was determined to be uneconomical due to the the price of gold at the
time. A small mapping project was undertaken on the property in 2009 to prepare
the ground for further work.
The property will require prospecting and geological mapping on
the western edge of the Dome property where granodiorite is known to outcrop
with concentration on known skarn zones and mineralized shear zones that were
followed with underground workings on several of the old properties that lie
immediately west of the Dome property. Such old workings include those on
District Lots 1091s, 1195s and 2939. Further mapping of the Tertiary cover on
the eastern portion of the property will also be conducted in an attempt to
determine the thickness of the cover. All known historic work will be compiled
into a single system at a scale of at least 1:2500 and cross sections prepared
for selected target areas.
Regional Geology
The Dome Property lies in the western portion of the Boundary
District of south central British Columbia and is centred within south the
historic Beaverdell Mining Camp. In broad terms the area is a graben-derived
terrane consisting of Triassic-Jurassic volcanics and sediments enclosed within
and/or intruded by Jurassic-Cretaceous and Tertiary granitic rocks. Regionally,
the Dome Project lies near the southern end of the Omineca Crystalline Belt.
10
The Boundary District is situated within the mid-Jurassic
accreted Quesnellia terrane. Pre-existing Proterozoic to Palaeozoic North
American basement rocks do however exist within the rafted Quesnellia terrane
(Kettle and Okanagan metamorphic core complexes). During the Eocene, these core
complexes were uplifted separated from the overlying lithologies. The oldest of
the accreted rocks in the district are the Pre-Jurassic Wallace Formation.
Broadly speaking, the lithologies (and general ages) are broken
into the following Formations and units:
1. Wallace Formation
[Pre-Jurassic - Quesnellia Terrane]
a.
Wallace Formation undivided
b.
Crouse Creek Greenstone Member
c.
Larse Creek Limestone Member
2. West Kettle
batholiths [Jurassic]
3. Various intrusive
stocks [Tertiary]
a.
Beaverdell stock - 58.2 ± 2 Ma
b.
Eugene Creek stock - 54.5 ± 1.9 Ma
c.
Tuzo Creek stock - 49.5 ± 2 Ma
4. Crosscutting
porphyry dykes [Tertiary] 61.9 ± 2.2 Ma and 50.6 ± 1.5 Ma
Geology
Granodiorite of the West Kettle batholith underlies much of the
area within and surrounding the Dome Property. This batholith has been
repeatedly intruded by stocks of quartz monzonite (the Beaverdell stock), and
hosts pendants/screens of metamorphosed country rock (Wallace Formation). The
Curry-Creek tuffs and conglomerates (Oligocene age) as well as mafic Miocene
flows (Nipple Mountain Volcanics), unconformably overlie all these units.
In the Beaverdell Mining Camp, where the Dome Property lies,
silver-lead-zinc ores have predominated historical production. In order of
historical importance (production), there are two (2) distinct types of ore:
1) the Beaverdell
Type Silver rich Vein Deposits
2) The Carmi-Type
Gold Rich vein deposits.
The West Kettle batholith is intruded by the Beaverdell stock
in the west of the Beaverdell Camp and is overlain by Wallace Formation in the
eastern portions of the Camp. Mineralization occurs within structurally
controlled fissure related quartz (+/- carbonate) veins predominantly striking
northeast. In order of decreasing abundance, the main metallic minerals are
galena, sphalerite, pyrite, arsenopyrite, tetrahedrite, pyrargyrite,
chalcopyrite, polybasite, acanthite, native silver and pyrrhotite.
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In the more northern portions of the Camp, sphalerite, pyrite
and galena are the main minerals in the vein deposits with a gangue of
quartz.
The Dome Property represents an epithermal vein (gold-silver
+/- base metals) exploration target. Precious metal epithermal deposit
exploration techniques will be applied to substantiate this assessment.
Figure 3: Geology of the Dome Claims
Mineralization
In the Beaverdell Mining Camp silver-lead-zinc ores have
predominated historical production. In order of historical importance
(production), there are two (2) distinct types of ore:
A. Beaverdell type
Silver Rich Deposits
B. Carmi type Gold
Rich Deposits
In the former case mineralization is typically composed of
galena, sphalerite and pyrite with lesser amounts of arsenopyrite, tetrahedrite,
pyrargyrite, chalcopyrite, polybasite, acanthite, native silver and pyrrhotite
in a gangue of mainly quartz with lesser amounts of calcite and fluorite. In the
latter, roughly equivalent with native gold in place of native silver. Both
these types of mineralization are noted in the Dome Property:
12
-
Beaverdell-Type silver-rich veins in the West Kettle Batholith
-
Contact metasomatism related mineralization (within contact zone between
West Kettle Batholith and the Wallace Formation
In general the mineralization in the Beaverdell District can be
described as hosted within granodiorite of the Westkettle batholith, grading to
quartz diorite and diorites with the Permian Wallace Formation metavolcanics and
metasediments as roof pendants hosting the mineralization in the northen
portions of the Property.
Shear zone related mineralization is the dominant geological
control on the Dome Property mineralization and is commonly noted on surface and
underground workings in the Beaverdell area. These shear zones are variable in
widths from showing to showing, however the widths of these shear zone in the
larger, well developed showings (like the Inyo-Ackworth) average approximately
two metres and are well defined by rusty fault gouge and vuggy quartz and
manganese staining. Lengths of these shear zones are equally as variable from
showing to showing, with the larger more productive shear zones defined over 300
metres in length. The shear zones also have variable strikes however a general
east-west (075-090 degree) trend can be estimated as the main control of
Property mineraliztion.
In general the shear zone related mineralization is associated
with vuggy quartz-calcite veins, on the order of 5 to 50 centimetres wide, and
commonly carry pyrite, galena, sphalerite, tetrahedrite and native silver
mineralization. Strong sericitic alteration and kaolin are known to be
associated with mineralization throughout the Property.
Beaverdell silver-rich veins are found in a 3.0 by 0.8
kilometre belt, referred to as the Beaverdell silver-lead-zinc vein camp. The
mineralized veins are fissure-hosted, formed along east-trending faults in the
west portion of the Beaverdell camp and northeast- trending faults in the east
portion of the camp. Faults have been classified into five types based on their
orientation, with each type having common orientation, kind of movement and age
relationship. The northeast-striking, high-angle normal faults pose the greatest
obstacle to systematic exploration and mining, as these faults are commonly
spaced a few metres apart dividing veins into short segments in a
northwest-downward direction.
Vein-type mineralization of the Beaverdell camp is
characterized by a high silver content. Mineralization is composed of galena,
sphalerite and pyrite with lesser amounts of arsenopyrite, tetrahedrite,
pyrargyrite, chalcopyrite, polybasite, acanthite, native silver and pyrrhotite.
The gangue minerals in veins are mainly quartz with lesser amounts of calcite,
fluorite and sericite with rare barite.