Canasil Resources Inc. ("Canasil") announces that MAG Silver Corp. ("MAG") has started the Phase 1 drill program at Canasil's Salamandra silver-copper-lead-zinc project in Durango State, Mexico. The planned program includes a minimum of 3,000 meters of diamond drilling as part of the CAD$ 1,000,000 first year exploration expenditures required by May 2014 under an option agreement for MAG to earn up to a 70% interest in the Salamandra project.
Canasil-MAG Salamandra agreement:
Under the agreement, MAG will have a first option to earn 55% interest in Salamandra by incurring C$5,500,000 exploration expenditures and making C$750,000 cash payments to Canasil over four years. The first year expenditures of $1,000,000, which must include at least 3,000 meters of diamond drilling, will be a firm commitment. Upon completion of the first option, MAG will have a second option to earn an additional 15% interest, for a cumulative 70% interest, by either preparing and delivering a NI43-101 compliant feasibility study within four years, or by incurring an additional C$20,000,000 in exploration expenditures over four years, with a minimum annual expenditure of C$2,500,000.
The Salamandra project covers 14,719 hectares (36,371.44 acres) and is located 35 kilometres northeast of the city of Durango. Access is excellent from the city of Durango via paved and gravel roads. Exploration results to date at the Salamandra project indicate the potential for a large intrusive-related, carbonate-hosted massive sulphide skarn/manto replacement system (CRD). The mineralized system is centered on a domal structure related to an intrusive complex that occupies the center of the property. Widespread silver-copper-antimony-arsenic surface anomalies with peripheral lead and zinc anomalies are found over a very large area. Extensive skarn and hornfels, intrusive and mineralized breccia dikes, and well mineralized fracture/veins represent a few of the hallmark CRD features that are present. Prior drilling cut high-grade zinc and silver mineralization within hornfels which is believed to overlie the same thick limestone host rock section that hosts the nearby San Martin-Sabinas, La Parilla and La Colorada CRD mines.
Canasil is a Canadian mineral exploration company with a strong portfolio of 100% owned silver-gold-copper-lead-zinc projects in Durango, Sinaloa and Zacatecas States, Mexico, and in British Columbia, Canada. The Company's directors and management include industry professionals with a track record of identifying and advancing successful mineral exploration projects through to discovery and further development. The Company is actively engaged in the exploration of its mineral properties, and maintains an operating subsidiary in Durango, Mexico, with full time geological and support staff for its operations in Mexico.