Rocmec Mining [TSX-V:RMI] is moving forward with plans aimed at acquiring and brining into production six mining concessions outside of Arequipa, Peru as it continues to define and delineate gold resources at its Rocmec 1 property in Quebec's Dasserat Township.
The company also continues to develop its thermal fragmentation mining process, which holds out the promise of extracting ore from narrow vein, hard rock ore bodies. Rocmec in March obtained patents for Mexico and Russia, adding to those previously obtained for Canada, Morocco, South Africa and the U.S. Patent applications are pending in Australia, Brazil and China and are expected to be received by the end of this year.
Rocmec has also tapped the capital markets recently. A private placement of 666,666 flow-through units closed at a price of C$0.18 per unit for gross proceeds of C$120,000, management announced in mid-March. An additional issuance of 613,000 common shares and half-share purchase warrants at C$0.10 per unit through a private placement raised another $61,300 in gross proceeds. Each full share warrant entitles the holder to purchase an additional common share of the company at C$0.18 for a two-year period from closing.
Puma Option in Peru
Rocmec has been busy at the Puma mining property about 80 kilometers outside Arequipa, Peru. Management in November entered into a purchase option agreement for Puma's six concessions, which span some 1,700 hectares.
Rocmec is looking to develop the gold mining property in partnership with a Canadian partner, RSW Beroma. About 10 tonnes of very high grade ore is being produced at one of the concessions using traditional, small-scale methods and management has high hopes that Puma's gold resources will prove to be an ideal site to employ the company's thermal fragmentation process.
To date, Rocmec has conducted two on-site visits with two independent geologists, sampled a variety of different mineralised zones and conducted a 1,000 metre drill campaign. Members of Rocmec's management team visited Puma at the end of March along with representatives of a financial group to follow-up on the progress of drilling work, enable the financial group to conduct due diligence work and to evaluate El Pollo, a third mineralized structure.
We are seeking to raise 10 million dollars through a debenture or gold loan, explained John Stella, Rocmec's investor relations manager. The breakdown is as follows: 3.0 million for a 100tpd (tonne per day) treatment plant, 3.0 million to acquire the property and 4.5 million for mine development and working capital… We hope to close the deal by the end of May '08, he told Resource Investor.
Short Payback Period
Given the nature of the deposit, the infrastructure in place and Puma's accessibility, management believes that it can earn payback of its investment in 20 months or less. A Rocmec-led team has completed a first drill-hole sample and management is awaiting lab results. Drilled horizontally over a 205-meter length, the drill hole intercepted the Ramal vein close to 100 metres below the summit where samples had previously been taken.
Previous sample results from the mineralised vein and hanging and foot walls came in as high as 98.20 and 39.73 grams per tonne gold and as low as 1.64 and 0.278 g/t. Samples from the mill and tailings ranged from 49.38 g/t to 4.19 g/t. Samples of quartz veins previously taken also indicate that significant quantities of hematite may also be present, according to company information.
Management took advantage of their latest visit to Puma to analyse a third mineralised structure named El Pollo which is being mined by the site owners. The structure, visible on the mountain's slope as it extends over 200 metres in height and 400 metres in length, is accessible over a 30-metre length on one level and 25 metres on another. Samples taken contained significant quantities of hematite and are now being analysed, according to management.
Developments at Rocmec I
Work is likewise ongoing to develop a gold mine at the Rocmec I property, which is located about 36 kilometers west of Rouyn-Noranda near two world-class mining camps, the Rouyn-Noranda Copper Gold Camp to the southeast in Quebec and the Kirkland Lake-Larder Lake Gold Camp southwest in Ontario.
A March 2007 technical report compliant with NI 43-101 disclosure standards prepared by Systèmes Géostat International Inc. identified Measured and Indicated mineral resources of 521,800 tonnes grading 5.15 g/t gold (86,550 ounces). The site also contains an additional estimated 2,250,000 tonnes grading 6.32 g/t gold (456,900 ounces of gold) in the Inferred Resources category.
Rocmec on April 22 announced that it had intercepted the Boucher mineralised structure for the eighth time, this time about 200 metres west of previous holes. Drilling has intersected Boucher at different elevations ranging from 75 to 430 metres.
The nature of the deposit, assay results to date and the mineralised zone being open to the east and west and at depth leads management to believe that the company will be able to efficiently and economically extract ore using its thermal fragmentation process.
While we are satisfied with the development of the mine up to now, current metal prices and geological potential of the Boucher structure bring a great deal of optimism for subsequent events at the site, Donald Brisebois, Rocmec's president and CEO, stated in a media release.