The project (100% Montezuma) lies approximately 100km north of Meekatharra and 30km west of the Peak Hill gold mine in Western Australia. The Mt Padbury Project comprises one exploration license E52/1529 covering approximately 214 km2.
Previous work over the project has included comprehensive surface geochemical sampling and RAB testing of the resulting gold anomalies at Rudd’s Ridge, Rudd’s Ridge East, Bare Flat and Wood Creek.
The Wood Creek prospect has returned the best results to date, with a surface anomaly extending over 800m X 400m coincident with a northwest trending regional structure. Gold mineralization at Wood Creek has been defined by RAB drilling over a strike length of approximately 400m, open to the southeast and northwest. The mineralized envelope is approximately 200m wide in the central section, suggesting excellent potential for a significant mineralized system.
The Wood Creek Prospect is progressively covered along strike to the southeast by material shedding from the Robinson Ranges, and it is likely that any surface geochemical anomalism is masked in that direction. This means that mineralization could continue beyond the boundary of the current soil anomaly.
RAB Drilling results to date from Wood Creek include:
||4m @ 2.95 g/t Au from 3m (incl. 1m @ 9.2 g/t Au)
||6m @ 1.95 g/t Au from 28m (incl. 2m @ 3.48 g/t Au)
||1m @ 5.11 g/t Au from 8m
5m @ 1.11 g/t Au from 11m
||11m @ 1.36 g/t Au from 8m (incl. 5m @2.06 g/t Au)
||2m @ 2.12 g/t Au from 1m
2m @ 2.41 g/t Au from 19m
Average drilling depth to date is approximately 30m and numerous holes finish in mineralization. Montezuma is of the view that results to date warrant testing at depth and intends to commence an RC programme to further test this target as soon as practicable.
Montezuma entered into an agreement with Midwest Corporation Limited in September 2008 whereby Midwest will purchase 100% of the iron ore rights over E52/1529 by paying Montezuma up to $6M cash plus a royalty on production.
The completion of this sale with Midwest is an exciting milestone for Montezuma, providing the Company with important working capital to fund our ongoing exploration work at the Peak Hill Gold Project (MZM 100%) and our regional portfolio, with retained exposure to the iron ore potential should Midwest be successful in commencing a mining operation within the project area.
Montezuma successfully negotiated an agreement with Auvex Metals Limited for the sale of the manganese rights over the Mt Padbury licence E52/1529 in May 2008.
In consideration for the sale, Montezuma will receive 10M fully paid ordinary shares in the issued capital of Auvex. On listing, this holding will represent approximately 12% of the issued capital of Auvex. Montezuma retain a $2/DMT royalty and will nominate one director to the Board of Auvex. The agreement provides Montezuma with a major equity interest in an emerging manganese producer ideally positioned to capitalise on very strong demand and high prevailing prices currently associated with global manganese markets. As a major shareholder in the company, Montezuma will be ideally placed to benefit from the strong revenues projected to flow from the proposed operations. Work to date at Mt Padbury has highlighted the potential for significant manganese mineralisation with rock-chips consistently grading over 40% Mn as previously reported. Auvex intends to list on the Australian Stock Exchange in early 2009 at a projected IPO price of $0.50. Montezuma is pleased to be a key partner in this venture and looks forward to sharing in Auvex’s success during this period of record manganese prices.
We look forward to keeping the market appraised as key milestones and payments related to this agreement are completed.