Oct 18 2010
Cayden Resources Inc. (TSX VENTURE:CYD) has announced that it has entered into an option agreement with La Camera Mining Inc., an Ontario corporation, to acquire its Mexican subsidiary which has a purchase right to buy the Morelos Sur gold property.
The Morelos property is located in the Nukay mining district of central Guerrero State in southern Mexico, approximately 230 kilometers south of Mexico City.
Option - Summary Terms
Cayden has a right to purchase the La Camera subsidiary by lending the subsidiary the funds necessary to exercise its underlying right to purchase the Morelos concession from a third party as follows: approximately $2 million to be lent immediately on TSX approval of the Option, another $3.65 million in April 2011 and a final $8.6 million in October 2011. In addition Cayden must issue to La Camera $11.55 million in common share units (share and half-warrant exercisable for two years) by the time of the April 2011 loan date and perform a minimum of $1 million of exploration work. The shares will be valued at the 20 day average price which is 10 days either side of the Option exercise announcement and this price will also be the warrant exercise price. Only the work and the first loan are commitments, the balance of the Option requirements are optional but in the event of termination of the Option all loans will be forfeited. A finders fee of $1.15 million in shares is payable to two parties if the Option is exercised. The subsidiary has no other material assets or liabilities. The loan amounts include 16% recoverable Mexican value-added taxes.
About Morelos
The Morelos project has good access from the major highway connecting Mexico City and Acapulco, by mine roads accessing Goldcorp's Los Filos project and by local roads connecting agricultural villages.
Gold mineralization in the district is predominantly of skarn type, hosted at the contact of early Tertiary intrusions emplaced into the carbonate sequence of the upper Cretaceous Morelos Formation. The deposits and underlying altered intrusions create significant magnetic anomalies due to the large amount of magnetite associated with mineralization. Three such magnetic anomalies coincident with mapped intrusions and gold mineralization occur on the Morelos property: the Mina Verde, La Hormiga, and La Jolla prospects. Of these the most advanced in regards to exploration stage is Mina Verde, which has a 43-101 compliant inferred resource of 1.7 m tonnes at 1.49 g/t applying a cutoff of 0.2 g/t Au. The inferred resource was drilled over a 300 meter by 400-meter area and is open in three directions. Similar geology and geophysical signature is projected to exist in an area 3km by 1 km. The La Jolla property also has a significant geophysical anomaly and previous drilling has intercepted narrow widths of iron oxide rich silicified marble with grades up to 87 g/t Au. The La Hormiga prospect contains several small historic workings in an area with coincident mapped intrusions and magnetic anomalies.
Technical Report
Cayden CEO, Ivan Bebek, commented on the acquisition; "Cayden management believes that the acquisition of the Morelos Sur property represents a significant opportunity to explore an underexplored advanced gold project located within a well established gold district. The company also continues to evaluate opportunities to explore and develop mining assets in North and South America."
Benjamin Gelber, B.Sc., P Geo. is the Qualified Person responsible for this news release.
Source: Cayden Resources