The Mine

The Mine

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Timeless

Spanish explorers found untold wealth in the hills of Central and South America and made Spain a world power. Today a company with a philosophy fitted to extracting gold from high-grade deposits in those same Central American hills is equally determined to create abundant wealth for its shareholders.

In the Clavo Rico, strong geological evidence demonstrates that deep gold sulphide deposits may contain much more gold than the oxide deposits nearer the surface. Such deposits are what make “world-class mines.”

The Clavo Rico

The Company’s primary mine is located on the 200 hectare Clavo Rico Concession located in southern Honduras. This mine has been operated since the 16th century by the Spanish and more recently was operated by Compania Minera Cerros del Sur, S. de R.L. as a small family business. In 2003, Clavo Rico’s predecessor purchased a 20% interest and later increased its ownership to 99.5%. This company proceeded to invest over three million dollars in the expansion and development of the mine and surrounding properties.

From the small family owned operation to today’s state of the art gold recovery operation has taken millions of dollars of investment and the rock solid commitment of management. Although there have been many problems ranging from record levels of rain fall to problems with contractors and delivery of equipment, management has remained committed to bringing the mine to a successfully operating junior mining status. In just over a year the current recovery operation has been planned, financed through loans and equity infusions, and constructed to the point of commencement of operations.

The current recovery operation has been sized to handle from 500 to 1,000 tons of ore per day on a recovery bed that has the capacity to receive up to 600,000 tons total, with expansion to 800,000 tons of ore. In comparison, the mine has been processing approximately 500 tons of ore per month. This expansion represents a sizeable increase in the capacity and therefore the actual gold recovered should correspondingly increase by the same multiple. The company commenced full operations on January 1, 2012 and believes that sufficiently high gold content ore bodies have been located and blocked out to load the recovery bed to capacity over the next two to three years. To operate an operation of this magnitude, the management will contract with top level geologists and mine engineers to maximize the efficiencies of the operation to make the entire operation as profitable as possible for shareholders and to ensure the life of the project for many years.

Clavo Rico has located a previously untapped ore body that will be transported by truck to the crush site, crushed to approximately 5/8 inch size pebbles, and loaded on the recovery pad for processing. The ore body has had some preliminary drilling undertaken by the company and the assays of samples indicates that the ore should have grades in the range of 5-7 grams of gold per ton, which makes this body equal to or greater that that we have been processing for the last four years. This gives us every reason to believe that the gold recovered should be sufficient to make the company very profitable with a return of all costs invested in the expansion in less than 6 months.

Geology

The Geology Of Southern Honduras

The southern region of Honduras lies in a rich geological zone which extends from El Salvador through the coastal belt of southern Honduras and well into Nicaragua. This belt of Matagalpa volcanics hosts numerous large and high-grade gold deposits. In colonial times, the area was called “El Tabanco.” Trachytic and rhyolitic domes pierce the entire sequence. The latter form the prominent “needles” in the hilly to moderately mountainous topography of the region and appear to play a role in the genesis of the gold deposits.

Exploitation – Surface Gold

Gold veins are formed when super-heated water carrying heavy concentrations of gold rises closer to the earth’s surface. In those areas where the veins reach close to the earth’s surface, the minerals bearing the gold are exposed to oxygen and begin to oxidize or break down, leaving gold deposits in oxide minerals that are easily broken down with chemicals, releasing the gold.

Honduras is renowned for its gold deposits, especially its abundant deposits of oxidized minerals containing gold. Glamis Gold reported that its San Martin mine in Honduras was its largest producing mine exceeding its projected 100,000 oz of gold in 2001.