Duran Ventures Inc. ("Duran" or the "Company") is pleased to announce that it has signed a non-binding memorandum of understanding ("MOU") with a private Peruvian company to design and establish a toll milling operation in Northern Peru.
Duran Ventures has been successfully acquiring, optioning, joint venturing and selling mineral property assets throughout Peru for over 20 years. The management team has developed extensive experience and local relationships that facilitate the Company's endeavors. Duran's Board of Directors understands the difficulties facing the worldwide exploration industry. The Company is comfortable with its focused presence in Peru and although dismayed by the discounts attributed to junior resource companies, it still sees much value for its shareholders in the significant potential underlying the Company's portfolio of mineral projects. The present extended period of low commodity prices and disinterest in resource explorers is anticipated to cycle back to more favorable terms, as it has done historically.
In light of these circumstances, Duran has been investigating the potential of a variety of Peruvian opportunities available in the small scale mining and toll milling business. Duran is in a very unique position to assess potential high grade opportunities and to enhance shareholder value by continuing to review and apply for new mineral concessions. The Board of Directors believe that a toll milling business will add significant shareholder value and further allow the shareholders to benefit from its current highly prospective property portfolio.
The Peruvian government reports that informal miners have been contributing as much as 1 million ounces of gold production annually. The origin of much of this ore has been difficult for government authorities to track. Peru has initiated a formalization process designed to register all small scale mining operations. The registration will allow the government to monitor and regulate health and safety, and environmental issues for miners and will allow these operations to legally sell their ores to permitted toll milling facilities only.
With approximately $5M of working capital to backstop an entry, Duran is in a unique position to establish an operation to generate ongoing cash flow. Duran's experienced Peruvian team has reviewed many opportunities and has the Board of Directors' approval to pursue this endeavor. Duran has entered into the MOU with a local Peruvian company to acquire an 80% interest in a joint company by investing US$1,500,000 in capital expenditures to design and establish a new toll milling facility in northern Peru. Duran will also establish a line of credit for the purpose of general working capital for the start up. A definitive agreement will be signed once proper due diligence has been completed and all government approvals and permits are in place
The site of the proposed facility has been established and is located on concessions already owned by the Peruvian local company. This company has initiated the permitting process for a proposed 100 ton per day facility. Duran has reviewed the current permit and has determined that further modification to the current permit application will be required to accommodate a variety of high grade gold ores to be sourced from northern Peru. Furthermore, a modification to the current application should allow the company to expand to a maximum of a 350 ton per day operation. There is access to water and power at the site that is located near the city of Trujillo, 10 kilometres from the main Panamerican Highway which runs the length of the country.
The location of the proposed toll milling facility is viewed as strategic by Duran. Many tolling operations in Peru are located in the south, more specifically, in the Nasca and Chala areas located 990 and 1150 kilometres south of the proposed facility. Many of the southern toll mills accept high grade gold ore often exceeding one ounce gold per tonne delivered from northern Peru. The proposed location will offer formalized (legal) miners, located proximal to this new site, an alternative facility to process their ore. It is important to note that with the MOU in place the company plans to conduct all the due diligence and engineering plans for the new proposed facility with constructions costs and timelines.
Included in the terms of the MOU is the assignment (subject to a 2% NSR) of several concessions (10,020 hectares) located in northern Peru. Importantly, nine of these concessions (7800 hectares) are located in the Tayabamba - Pataz gold region located approximately 300 kilometres east of Trujillo. Three well established Peruvian gold miners are active in the Pataz and Tayabamba region along with many small legalized miners. Mining in this region has been continuously focused on high grade gold mineralization for almost 6 decades. Public information from the Peruvian Ministry of Mines shows 2014 gold production records from the three main gold miners as follows; Consorcio Minero Horizonte S.A. - 247,000 ounces, Minera Aurifera Retamas S.A. - 181,057 ounces, and Compañia Minera Poderosa S.A. - 156,376 ounces. Duran plans to assess these properties for exploitation potential and will assist small scale informal miners to formalize their activities and to offer an alternative and more strategic location for ore processing. Furthermore, Duran is currently assessing its existing portfolio of gold properties for potential exploitation and delivery of mineralization to its new proposed facility.
Duran views this new initiative as a solid step toward establishing a sustainable business model that will complement its exploration expertise and portfolio of mineral assets.
Jeffrey Reeder, P.Geo., and a qualified person as defined in National Instrument 43-101, has prepared and approved the scientific and technical disclosure contained in this news release.