Marifil Mines Ltd.: Letter to Shareholders
VANCOUVER, BC--(Marketwired - June 02, 2016) - Marifil Mines Ltd. (TSX VENTURE: MFM) -
Dear Shareholder,
The past few years have been extremely painful, not only for management but also for Marifil shareholders. The problems we faced were fivefold and were largely beyond our control:
- The slide in metal and non-metallic prices which began over five years ago. For example during this period gold prices slumped from $1800 per ounce to about $1215 per ounce. Similar decreases can be shown for silver, base metals, and potash. This slide in metal prices in also reflected in the share prices of junior mining companies as shown below in Figure 1.
- The anti-business policies of Argentina's prior government made the country a difficult place to do business. These policies included controls on the movement of money into and out of the country, established taxes on the import and export of equipment, and taxes on the sale of gold. This put a drastic chill on investor appetite for Argentinian companies.
- The sudden abandonment of San Roque by NovaGold implied that San Roque was not a good project and left us with a 49% partner who would not contribute to advance the project. NovaGold was forced to leave when the company was re-organized into two new companies: NovaGold and NovaCopper. The new NovaGold board of directors insisted that company would concentrate solely on their Donlin Creek, Alaska gold project and their Galore Creek, British Columbia project and NovaCopper's board insisted that company concentrate on their Ambler District, Alaska copper project. The NovaGold geologists who worked on our project all think that it is a good project.
- From February 2015 through February 2016 a major copper producer carried out a due diligence study on the San Roque project and then carried out protracted negotiations on a Joint Venture agreement for San Roque. Marifil and that company were close to a final agreement when that Company suddenly left because of severe budget cuts for exploration.
- In 2014 an entity of the Argentina government approached Marifil seeking a long-term contract to purchase limestone for use at a new power plant. Selling material to the government required us to deal with a quasi-public corporation set up to handle contracts between private suppliers and buyer. Before proceeding further the buyers insisted on further drilling and sampling to verify the quality of the limestone. The buyers paid for this study which was successful.
After protracted negotiations Marifil and the buyer agreed that the sale of limestone should go through a public bid process to ensure transparency for the deal. Further lengthy delays ensued while various government agencies contributed their bureaucratic efforts in designing the bid process. These delays extended from 2014 through the first half of 2015. Then a change in the federal codes meant further rewrites of the bid process. In late 2015 federal elections led to further delays and to a change of government. This change of government, while favorable in the long term, resulting in our having to start all over in our negotiations to sell limestone to the government. The process continues!
At the beginning of 2016 the new government, led by President Macri, began rescinding most of the onerous restrictions imposed by the previous government. Argentina is once again a good place to do business. Similarly, gold, silver, and some of the base metals seem to have reached a bottom and prices are slowly rebounding. During most of this trying period management has foregone salaries and fees and done its best to keep the Company alive on very limited resources. With political and market conditions improving the Company is optimistic that we will be able to attract joint venture partners for our projects and we will once again grow.
One of our more interesting projects is an epithermal heap leachable gold-silver deposit within the San Roque claim block (See Figure 2). This project, called Z-34, has been explored by 16 drill holes. The drill holes test two sub-parallel zones of mineralization about 150 meters apart. The last hole drilled in the program intercepted from 0 to 35 meters, 35 meters grading 2.27g/t gold and 42g/t silver followed by a further 38 meters, from 155 to 193 meters, grading 1.12 g/t gold and 28.5 g/t silver.
Z-34 mineralization is open-ended along strike and down dip. Mineralization is thoroughly oxidized from surface to a vertical depth of about 35 meters. A bottle roll cyanide test of oxidized material shows gold recoveries in excess of 90%.
This project can be quickly tested with a minimum of say 30 or 40 short drill holes and more comprehensive metallurgical testing. Comparisons of this project with similar projects in Santa Cruz Province suggest that the Capex of this project would be less than US$18 million with a very quick payback.
The Company is cautiously optimistic that we will find a partner to develop the bulk tonnage target at San Roque where an Induced Polarization (IP) geophysical study shows a very large, strong IP anomaly extending more than 900 meters along strike and is close to surface (See Figure 3).
Our on-going geological research has identified several gold targets and a second project with similar geologic characteristics to San Roque.
In addition to our limestone and San Roque projects we still maintain strong land positions covering potash, sulfur, gold, silver, nickel, platinum, and oil and gas plays.
In summary, the Company believes that while times are still tough we are still surviving during this difficult period.
This press release has been reviewed and approved by John Hite, President of Marifil Mines Ltd. and by Richard Walters, Vice President under whose directions the exploration program is being carried out. Mr. Hite and Mr. Walters are Qualified Persons as defined by National Instrument 43-101.
WE SEEK SAFE HARBOR.
General Disclaimer
Marifil Mines Ltd. "Marifil" has taken all reasonable care in producing and publishing information contained in this news release, and will endeavor to do so on a periodic basis. Material in this news release may still contain technical or other inaccuracies, omissions, or typographical errors, for which Marifil assumes no responsibility. Marifil does not warrant or make any representations regarding the use, validity, accuracy, completeness or reliability of any claims, statements or information on this site. Under no circumstances, including, but not limited to, negligence, shall Marifil be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to, loss of programs, loss of data, loss of use of computer of other systems, or loss of profits, whether or not advised of the possibility of damage, arising from your use, or inability to use, the material from this news release. The information is not a substitute for independent professional advice before making any investment decisions. Furthermore, you may not modify or reproduce in any form, electronic or otherwise, any information on this site, except for personal use unless you have obtained our express written permission.
Forward-Looking Statements
This news release may contain forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
For further information regarding Marifil Mines Ltd., please refer to the Company's filings available on SEDAR (http://www.sedar.com) or at Marifil's Website (http://www.marifilmines.com.)
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Contact
Contacts:
John Hite
President
(702) 562-4880
jhite@marifilmines.com
Hugh Oswald
Investor Relations
(604) 838-2855
hoswald@marifilmines.com