Can-Cal captures Colomo concession

Las Vegas-based junior Can-Cal Resources (OTCBB: CCRE) has entered into a letter of intent to acquire a majority operating interest in the 12,700ha El Colomo gold-silver project in Mexico's Nayarit state, it announced Tuesday. Can-Cal's newly incorporated Mexican subsidiary SMR (Sierra Madre Resources) is executing the agreement, which entails paying Mexican property holder Golden Anvil US$250,000 for 50.0% and 50.1% equity and operating interests, respectively. Can-Cal and Golden Anvil aim to formalize a joint operating agreement by March next year, the former said. SMR will also finance up to US$1.25mn in phase I and II exploration at El Colomo, where production could start as early as next year, the Las Vegas company said in a statement. The acquisition and incorporation of SMR "represent the initial phase of our new corporate strategy to focus the company's efforts on acquiring, exploring and developing precious mineral properties in Latin America, particularly Mexico," Can-Cal CEO Anthony Ciali said. NUEVA VICTORIA US mining company Asarco previously drilled 7 holes on the property's Nueva Victoria structure, returning 11.8g/t gold and 769g/t silver over 9m as well as 7.3g/t gold and 50g/t silver over 1.5m. Further, SMR conducted channel sampling along Nueva Victoria, publishing assays of 6.77g/t gold and 156g/t silver over 8m as well as 2.78g/t gold and 192g/t silver over 11m. Asarco carried out further drilling along other vein occurrences, but Can-Cal has discounted the results because holes were incorrectly positioned, it said. "These veins, peripheral to the Nueva Victoria silicified tuff, represent excellent drill targets," Can-Cal said. "As such, the El Colomo project has excellent up-side potential for additional vein mineralization." Can-Cal will now explore for additional targets and perform in-fill drilling on Nueva Victoria to determine whether reserve levels justify a 2004 production start. Later works will include completing pre-production capital projects and, if necessary, making adjustments to the property's existing 200t/d mill, installed by Golden Anvil. Can-Cal holds mineral properties in the US and, through its Mexican subsidiary, aims to expand internationally. "SMR is presently in discussions with other Mexican mineral property owners to potentially acquire additional precious metals projects," Ciali said.