MARKET UPDATE ON URANIUM AND GOLD PROJECTS

Transcription

1 ASX Announcement 1 March 2011 MARKET UPDATE ON URANIUM AND GOLD PROJECTS HIGHLIGHTS 5,000 metre drilling programme to commence at Rio Puerco uranium project within the next two weeks. Drilling to commence on Texas uranium project in March. Significant potential to increase resource at these two projects over the next 6 months. Potentially significant gold discovery at recently acquired San Marcos gold project in La Paz County, Arizona. o Of 86 samples (comprising of grab, composite, continuous chip and short channel sampling), 24 samples (28% of all samples) returned gold assays greater than 1 grams per tonne (g/t). o High grade gold assays including 98.2 g/t, 52.9 g/t, g/t, and g/t. Rio Puerco uranium project Australian-American Mining Corporation Limited ( AusAmerican or Company ) is pleased to announce that it has signed a drilling contract and intends to commence drilling at its Rio Puerco uranium project in New Mexico within the next two weeks. The drilling programme which will consist of 20 holes for 5,000 metres. The drilling is a combination of RC and diamond drilling designed to validate historic drilling; increase the current JORC resource on this project (which is in the inferred category and is currently 11.4 million pounds at 900 ppm (0.09%) U 3 O 8 using a 300 ppm cut); test mineralisation open along strike; increase a large percentage of the resource from inferred to the indicated and measured categories ;to obtain core for further metallurgical test work and to confirm the amenability for the ore from Rio Puerco to Insitu Recovery (ISR) extraction. 1

2 Drilling at this project was intended to commence in the New Year but has been delayed due to extreme weather conditions experienced in the USA this winter. South Texas uranium project The company is also pleased to announce that it plans to commence drilling at the Baumbach Area in South Texas. This project is leased by its 90% owned subsidiary Uranium Company of Texas LLC ( UCT ) and is part of what has been referred to as the Lone Star properties. UCT has selected Artesia Drilling Company and Century Well Logging Company for the commencement of a uranium exploration hole drilling program on the Baumbach Area targeted for late-march, Following this drilling ongoing permitting will be submitted to the appropriate Texas regulatory agencies. The Baumbach Area near La Grange, Texas, has a historical resource estimate of 2 million pounds of U 3 O 8 (1), announced by the Union Carbide Corporation after their drilling program. The UCT drilling program is designed to confirm and expand on this Union Carbide resource estimate. Field work for the Texas State mandated archeology survey is completed and a baseline water well sampling program commenced on February 23, The Baumbach Area resource has been leased for 5 years with the right to extend the leases for an additional 5 years. The uranium mineralization is relatively shallow with mineralized horizons at 50 to 200 foot depths (15 metres 60 metres). The entire property portfolio is amenable to ISR (in situ recovery) methods. (1) This historic resource was not classified a JORC or NI resource and therefore is speculative in nature. There is insufficient data completed by the company to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource. San Marcos gold project Arizona AusAmerican is pleased to announce that tenements have been acquired over the old San Marcos mine and surrounding lands located in La Paz County, Arizona consisting of 126 contiguous lode mining claims over 4 square miles (10.5 square kilometers). 2

3 The historic San Marcos mine was operated first in the 1890s as an underground mine, which included an underlay shaft of some 500 feet (150 meters) length with drifts at four levels, and a vertical shaft 160 feet (49 meters) deep. The ore was said to average 2 ounces gold per ton and 0.3 ounces per ton silver. The mine operated intermittently until Since then, the mine has attracted industry interest at times of high gold prices. A small open cut made during the 1970s destroyed the collar of the underlay shaft. The only drilling done was by Westmont during the 1980s as the price of gold began its precipitous decline. The Company has undertaken an evaluation of the potential of this strongly mineralized area. Work has consisted of evaluation of numerous mineralized prospects, extensive sampling of outcropping mineralized zones, a total magnetic survey, and preliminary geologic mapping. Geologic mapping has confirmed the structural control of mineralization by both lowangle and high-angle faults. The structural setting is similar to that of Copperstone mine, which lies some 48 miles (77.5 kilometers) to the WNW, where the regional detachment fault and associated high angle faults host nearly one million ounces of gold. The San Marcos underlay shaft attempted to follow a similar low-angle fault. The prospect pits and the shallow (<3 metres) San Marcos open cut expose both a low angle fault and associated high-angle structures. The magnetic survey was conducted by HydroGeophysics and is a preliminary survey intended to determine if the technique might be used to evaluate the structural setting of the area. This data is being compiled and analyzed, and a report is expected in the near future. Surface sampling has so far included collection of 86 samples over about 80% of the property. Analytical data have been received for nearly all of these, and include fire assay for gold and a multi-element scan for numerous other metals including silver. These samples include grab, composite, continuous chip, or short channel samples depending upon the nature of each occurrence. They were analyzed by ALS-Chemex, an ISO certified laboratory, in Reno, Nevada. Evaluation of multi-element scan results is on-going, but the fire assays for gold are unambiguous. Twenty-four of the 86 samples, or 28%, contain more than 1 gram per tonne (g/t) gold. The maximum concentration so far encountered is 98.2 g/t. The attached table shows the results from the 86 samples. The map below shows the distribution of samples with gold concentration classed as shown in the legend. 3

4 It is apparent from the map that a strong linear trend exists. The strike of controlling structures both parallel and are at high angle to the strike of the linear trend of better gold assays. The dip of the detachment fault is at a shallow angle to the northwest. The mineralized zone may be limited by barren outcrop some 2,600 feet (800 meters) to the northwest. The potential for gold mineralization has not been closed off either northeast or southwest. The linear trend shown on the map is 2,400 feet (750 meters) in length. The thickness of mineralization is unknown, however the vertical extent of mineralized rock exposed in the open cut is about 10 feet (3 meters), and continues for an unknown depth below the pit bottom. The underlay shaft was developed to a depth of 160 feet which indicated an overall width of mineralisation in excess of 100 metres. The company will acquire Westmont s drilling data in the near future. That information, together with evaluation of total magnetic survey results, completion of surface sampling, and analyses of those samples will be used to design a Phase I drilling program. It is anticipated that drilling will take place in second half of Jim Malone Executive Chairman Further information ENDS Please contact Jim Malone or jim.malone@iinet.net.au Investor and Media Enquiries: Fortbridge- Bill Kemmery on or Competent person The review of exploration activities and results contained in this report is based on information compiled by Mr D. Geldard: Chief Executive Officer and Executive Director of Australian-American Mining Corporation Limited. Mr Geldard is a member of the Australasian Institute of Mining and Metallurgy. Mr Geldard has significant experience relevant to the style of mineralization and types of deposits under consideration and consents to the inclusion of this information in the form and context of this announcement. 4

5 to to to 1 1 to 3 3 to FIGURE 1: SAN MARCOS MINE AREA SHOWING DISTRIBUTION OF GOLD CONCENTRATION IN SURFACE SAMPLES Northing and Easting co-ordinates in UTM metres; gold values in grams per tonne (g/t). 5

6 easting northing sample # Au g/t easting northing sample # Au g/t easting northing sample # Au g/t A B C D a b a c b d A B C a b

7 easting northing sample # Au g/t easting northing sample # Au g/t easting northing sample # Au g/t a b c 4.94 Values in red greater than 1 gpt 7