|September 28, 2006|
IMPACT Silver Announces Signing of Comprehensive Agreement for Veta Grande Silver Project
|IMPACT Silver Corp. ("IMPACT") is pleased to announce that it has signed a comprehensive agreement for the Veta Grande Project in the Zacatecas Silver District of Mexico. The project consists of mining concessions and a 200-tonne-per-day (-tpd) processing plant with associated surface rights.|
The new comprehensive agreement is effectively a more detailed version of the Letter Option Agreement announced July 10, 2006 and accepted for filing by the TSX Venture Exchange on July 21, 2006.
Under the agreement, IMPACT may purchase the Veta Grande Silver Project assets over a period of four years from a private Mexican vendor. IMPACT may purchase the assets for US$1,120,000 and 500,000 shares in stages, as follows, plus commit to US$700,000 in work expenditures (US$350,000 in each of the first two years): IMPACT paid US$10,000 on signing of the Letter Option Agreement and paid US$370,000 and 100,000 shares to the vendor on signing of a comprehensive agreement. With these payments, IMPACT has acquired a 25% interest in any Net Revenues from material processed through the plant. Of this amount, US$330,000 was used to pay off existing debt on the processing plant. After 18 months and further payments of US$200,000 and 100,000 shares, IMPACT will earn a total 40% interest in any Net Revenues from material processed through the plant. After 36 months and further payments of US$240,000 and 200,000 shares, IMPACT will earn a total 60% interest in any Net Revenues from material processed through the plant. After 48 months and further payments of US$300,000 and 100,000 shares, IMPACT will earn a 100% interest in the project with no underlying royalties. IMPACT may accelerate the payments and work commitments at any time after the first 18 months and upon completion of the cash and share payments will earn a 100% interest in the project. Under the agreement, the vendor may mine and process material from the properties until IMPACT exercises its purchase option. Day-to-day management and operations responsibility for the processing plant remain with the vendor until such time as IMPACT completes its obligations under the comprehensive option purchase agreement.
The Veta Grande Project consists of four mining concessions, one concession application, surface rights and a 200-tpd processing plant. Two of the initial targets on the concessions are the Cristian and San Pascual Mines. The Cristian mine, which last produced in 2003, still has its shaft hoisting equipment in place in anticipation of the recommencement of operations. IMPACT was not able to access the workings, but samples from surface dumps returned 310g/t silver, 24.2% lead and 8.0% zinc from a high grade stockpile and 93g/t silver, 0.43% lead and 1.4% zinc from a low grade waste dump. The San Pascual Mine last produced about 20 years ago. A representative sample of the dump around the shaft assayed 875g/t silver. A representative sample from the dump beside the nearby Pirul shaft assayed 525g/t silver. Planned work at these and other sites controlled by IMPACT will consist of exploration and evaluation followed by drilling.
The 200-tpd processing plant was built in 2000 and last operated in 2003. IMPACT engineers are making a full assessment of the plant and associated facilities as part of IMPACT's continuing due diligence work. The vendor is making plans to restart milling operations at the processing plant and expects to be back in production on a custom milling basis in the near future. The surface rights to the area around the plant are also included in the agreement.
The Zacatecas Silver District is one of the largest historic silver districts in the world with past production estimated at 1.2 billion ounces. The Veta Grande Silver Project represents an initial foothold in the core of the district from which IMPACT plans to leverage itself through acquisitions and joint ventures to become the district's dominant player. IMPACT has begun due diligence, exploration and engineering work to evaluate the production potential of the properties and the processing plant. IMPACT is currently evaluating other concessions in the district as potential acquisitions.
This acquisition is part of IMPACT's strategy of building a mid-tier Silver producer based on an aggressive development and acquisition plan focusing on Mexico and silver. Through its network of local contacts, IMPACT continues to seek out undervalued assets that can represent consolidation opportunities in historically significant silver districts.
George Gorzynski, P.Eng., a Qualified Person under the meaning of Canadian National Instrument 43-101, is responsible for the technical content of this news release. Rock samples were collected from dumps beside old mine workings. All samples were shipped to the ALS Chemex preparation laboratory in Guadalajara, Mexico, where they were fine crushed (70% passing a 2mm screen), pulverized (85% passing a 75 micron screen) and pulp split-separated for assay by a riffle splitter. These pulps were shipped to the ALS Chemex laboratory in North Vancouver, Canada, where a 30-gram split of each was assayed for gold and silver by standard fire assay and a 10-gram split was analysed for an additional 30 elements by ICP spectrometry.
IMPACT Silver Corp. is a Tier 1 silver focused mining and exploration company with two producing silver mines at Zacualpan, Mexico, an advanced-stage silver project at Zacatecas, Mexico, and other projects in the Dominican Republic. Energold Drilling Corp. (EGD:TSX.V) owns 6.6 million shares of IMPACT.
On behalf of the Directors of IMPACT Silver Corp.
"Frederick W. Davidson"
For further information, please contact:
Darrell Rader, Corporate Development
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
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Telephone 604 681-9501
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