Journey Resources V.JNY(Canada) JNYRF:USA Announced today that they have initiated a pilot mining project on their Charay gold/silver property in Mexico of 37,000 tons of ore containing an estimated 25,000 ounces of gold. The cost per ton to produce the gold, including blasting/shipping/milling/smelting will be around $100/ton instead of the normal $400/ton and since gold is staying above $1,100/oz that will mean that the company should make $25,000,000 on this initial production. As stated below, Charay could be a million ounce gold property. Musgrove in Idaho is a million ounce gold property, but it will take several years to develop it. Near term Journey also has the massive silver/lead/zinc Vianey joint venture 50/50 property plus the also massive silver/gold-lead/zinc property in Peru. Vianey will be a producing mine in about 12 months and the Silver Moutain property in Peru will be in production in about 18 months. Journey has under 100 million shares. Since December there has been a lot of insider and institutional buying of the shares on the open market. The price has advanced from 4 cents to 8 cents(7 to 8 cents range), but when comparing the stock price with what has happened with similar companies in the past, the share price could realistically, as their four large properties reach development, reach $10/share. Even at 10cents a share that would be a 10,000% advance. $1,000 invested at 10cents/share would end up being worth $100,000. And the price right now is 8 cents, not 10 cents a share. In the following write up, I go through what their four properties contain so that you can decide for your self if this is a stock that can be worth $10 share. Even if you only buy $100 worth of stock, that could end up being worth $10,000. Read the following report and decide for your self. Remember, they are getting set to bring in 25 million dollars. Now is the time to buy the stock before it starts going up. That is why I have posted this message now.
The Musgrove Creek Gold Project in Idaho has over 300,000 oz/gold confirmed and recent drilling should bring that over 600,000 oz, with additional drilling this year bringing it to over one million ounces of gold. The Johny Northwest target, which was midway between the two previous drill programs, was recently drilled and significant gold mineralization was also encountered in multiple drill holes, with hole MG-09-64 ending at 250 feet in mineralization which shows that the gold continues at depth. The company has stated that further drilling will probably show that the property has over one million ounces of gold which would be over a billion dollars at todays gold prices, but it may take years yet to further drill test and then bring it to production. In the meantime what is the potential of our other properties? Charay was originally worked up by Vane Minerals, but they were looking for a large shallow open pit minable deposit and Charay turned out to be a high grade gold/silver vein type of deposit and so they religuished the property. Journey was looking for high grade gold/silver deposit types of deposits and so they acquired the property. Vane Minerals: Relinquishes Minas Charay stating,
"As reported in our interim results, a 26-hole drilling programme carried out at Minas Charay did not confirm the large low-grade target and was only successful in delineating a narrow high-grade precious metal vein system." (We acquired the property. Their loss, our profit.)
• The mineralized quartz vein/structure was only tested along a strike length of approximately 240 metres, but it continues in an easterly direction, so it could be much more than 240 meters in length. Also, the vein was only drilled 50 meters deep and is open at depth, with the grades increasing at the lower depths, so the vein structure is probably much larger than what was drilled by Vane minerals, and since the gold values were increasing as the drilling descended, there should be a lot more gold than is indicated by this initial drilling. Plus, there are certainly more veins to be uncovered in the area. Further drilling will be done with the company owned drill to determine its size. • 37,000 tonnes of material just along the 240 metre drill-tested strike length of the structure and only to a depth of 50 metres, averaged 18.75 g/t Au and 120.15 g/t Ag. which gives an estimate of 24,000 ounces of gold, but the grades are probably higher than this because fire assays under report free gold structures and so the amount of gold just in this initial 37,000 tons of ore could be 25,000 oz or more. • Charay is a mesothermal type of deposit. Mesothermal lode gold deposits are characterized by gold-rich multiple quartz vein systems and are noted for their deep vertical continuity which can extend to a verticle distance of over 3 kilometers. • The initial 25,000 oz of gold will be mined starting in Q2 2010, which is one to four months away, and will give us an initial cash flow THIS YEAR of $25,000,000, but considering that the vein continues eastward and may go to great depths, with the grades increasing with depth, and that there are most likely multiple veins, the amount of gold at Charay could rival or exceed the Musgrove property, but even if it turns out only to be 100,000 oz. and if gold stays at $1,100/oz, the Charay property would be worth $110,000,000. Vianey Wits Basin has paid Journey 2,100,000 shares for a 50% joint venture in the Vianey Mine. The shares at this time are worth around $200,000, and could be cashed in if needed, but Wits share price could rise substantially over time as they develop Vianey and their other properties, and would be available as a source of money for Journey if needed in the future.
A review of past calculations on Vianey completed in 1997 by P.J. Hawley states a total in all categories of 345,020 metric tonnes grading 2.13 per cent lead, 3.66 per cent zinc and 269 grams of silver per tonne.
Just the silver alone would be worth 50 million dollars. (Our share would be 25 million) The lead and zinc will more than pay for the operation of the mine, and, if the price of silver continues upward, the silver could eventually be worth a lot more than the present estimate of 50 million dollars.
Given the history of the region, and high grades, Wits' and Journey's plans are to prove additional mineralization, what management hopes could be a several million ton reserve, up to six times what was previously identified which would be equivelent to $300,000,000 worth of silver in addition to the lead and zinc credits. Journey has spent $100,000 rehabilitating the mine and it has the potential to move into production within the next twelve months. So this would be an additional cash flow which would be added to the money that we would be getting from Charay.
The initial estimates of the Charay and Vianey properties show a cash flow of $50,000,000, but could increase to over half a billion dollars. Silver Moutain property in Peru
INDEPENDENT TECHNICAL REPORT ON THE JOURNEY RESOURCES CORP SILVERIA PROJECT, PERU Prepared under the Guidelines of National Instrument 43-101
The Property covers approximately 9,780 acres, is located 30 kilometers south-west of Peru Copper's Toromocho property and Pan American Silver's Morococha Mine. The claims encompass the past producing Pacococha, Millotingo, Silveria and Germania mines.
The property is located in the mountains of Peru where the deformation during the Lower Cretaceous created broad, NNW-SSE trending folds. Faulting associated with this deformation is thought to have given rise to the formation of normal faults and related fractures which may have provided fluid pathways to mineralising hydrothermal fluids. The main hydrothermal source is probably a large intrusive body located below the area at an unknown depth.
Deposit Types Mineralisation at Silveria is dominated by steeply dipping quartz-carbonate basemetal veins although disseminated styles are also present. . The mined veins were typically silver-lead/zinc dominant at current upper levels of exposure (above 4500 metres elevation) but become more copper-dominant silver-lead-zinc mineralisation where veins are exposed in the lower production drives (generally below 4200 metres elevation). The veins mined were the veins with the easily identified dark galena mineralization which is a lead ore that contains significant amounts of silver within its structure. However it now appears that by only mining the lead-silver veins, they missed what appears to be significant gold bearing quartz veins. Significantly several samples with high grade gold have been collected from portals accessing veins for which historic records do not mention gold. For example, one sample taken from the Germania area of Silveria assayed 6.89 g/t Au, 3,240 g/t Ag, 1.5% Pb and 2.6% Zn. The highest base metal assays received to date comprise 12.05% Pb, 15.5% Zn and 3.38% Cu and a strong silver-lead-zinc-copper association is noted from the lower portals at Germania and Pacococha.
In addtion to the gold-rich quartz vein shoots which may be present in the system, numerous surface rock dumps and tailings piles of various sizes exist across the Silveria project mining area. Preliminary assay results of rock-chip grab samples from dumps, suggest that gold is present, but is refractory and is only recovered using recent bio-oxidation technology. For this reason SRKES considers it likely that pre 1991 gold recovery was poor and any gold in arsenopyrite would have presented to the tails. In addition to the rock dumps, initial assays results have identified strongly gold-silver-base metal mineralised samples associated with partly mined veins not historically known for their gold content which indicates significant new opportunity from an exploration perspective.
Exploration Potential The mines comprising the Silveria Project (Germania, Pacococha and Millotingo) were shut-down due to falling metal prices and were not effectively reopened due to a combination of low metal prices and progressive removal of the mill and plant.
Review of the Quickbird satellite image has allowed the generation of a preliminary structural map. This indicates that shear structures which host mineralisation are more extensive than historic surface working and/or underground mine plans suggest. Also, reinterpretation of the style of mineralisation at Silveria indicates that the vein systems have the potential to extend to significant depth, and may have a vertical metal endowment of greater than 1 kilometre. Evidence in support of this interpretation is drawn from the nearby Coricancha Mine where the main Corichanca vein has been mined over a vertical interval of 840 metres. In additon to this, a vertical metal endowment in excess of 500 metres has occured in the larger veins of the Silveria system.
The head of the Tunsuyoc valley is a flat alluvium-covered plain that is over two kilometres long and up to one kilometre wide. The strike of the known veins at Germania suggest that they may extend southwards beneath the cover. SRKES notes that the potential of areas under cover has not been fully tested. Journey holds exploration licences over several such areas and SRKES considers these to be high priority for exploration drilling. Surface diamond drilling from existing roads is planned.
SRKES considers that the Silveria Project has significant potential with respect to historic resources remaining as unmined ore blocks in areas of former mine development, unmined veins and untested depth and strike extensions of known veins. In addition, the mineralised material which is present in mine dumps at portal entrances could provide an additional source of mill feed. It may also be possible to reprocess the tailings.
Over 40 silver-base metal veins are known within the Silveria area and many had only been partially mined at the time of mine closure, plus there could be more veins to be discovered with drilling. One of these veins has now been tested. Preliminary Sample Results showed 235.2 G/T Silver, 10.94% Zinc, 8.59% Lead And 0.812 G/T Gold. Testing was done on the Reserva Vein, level 345 sampling project. Level 345 is one of five levels developed prior to the Pacococha mine closing in 1991. The geochemical survey targeted the initial 300 m of Level 345. It consists of 56 sampling lines containing one to three random chip samples taken within well defined areas.
As a reference to what can be expected, the Millotingo mine was a high grade silver mine working within the Pacococha mining camp and formed part of the same vein system. Production records for Millotingo indicate that the mine produced at average head grades of over 23 oz/ton Ag for 11 years and 16 oz/ton over 30 years. The mine also produced over 90,000 ounces of gold and undisclosed amounts of lead and zinc.
Silveria is a robust project with significant mineral potential, possibly within the next 18 months. Journey has an experienced exploration team in place and has outlined an appropriate exploration programme to be conducted over a realistic time frame. The programme defined above gives provision for verification re-sampling and re-modelling of existing ore blocks with the intention of rapidly defining a NI 43-101 compliant resource which can be accessed from existing underground drifts and adits, whilst at the same time targeting the upside potential of veins below the levels of present mine workings. If future exploration can verify the historic reserves stated at the 1991 closure, the Silveria Project could contain a significant tonnage (440 Kt of “commercial ore”) of relatively high grade material. No information regarding gold values is available. However, gold is known to occur at both Coricancha and the nearer Millotingo mine. Additionally, SRKES believe that due to the current high metal prices, the project also has the potential for verifying some of the ‘non-commercial’ ore defined in 1991. SRKES also conclude that due to the re-interpretation of the mineralizing system as an Intermediate-sulphidation type, significant interest also arises from the potential of defining additional copper resources at depth as well as gold mineralisation in offshoot structures. Additionally, the mineralized rock dumps may provide valuable additional mill feed material and tailing's dumps may provide a source of start-up capital if a similar bio-oxidation procedure can be proved to be operated economically. The first vein to be tested shows excellent values. Many more veins to be tested and developed, plus the dumps and tailing's left over from where people mined the previous veins. Plus large areas still unexplored and mining may start within 18 months. And it looks like this will also be a large cash flow project. We will be starting to get cash flow in about six months from Charay, then in about 12 months from Vianey, then in about 18 months from Silveria, and finally from Musgrove. A minimum of hundreds of millions of dollars to billions, and as the public and institutions see what we are producing, our stock price will be in the multiple dollar range.
Posts: 580 | Registered: Oct 2003
| IP: Logged |