Searching for mineral resources around where they have already been found with historical mining operations pointing to the prospect of strong economics – this is a tried and proven strategy for value creation in the mining business. The unique history of the Clayton Mine is what has provided the opportunity for CMX to confirm the property has all the attributes required for proving up substantial mineral resources.
CMX Gold & Silver Corp. is working to reactivate its 100%-owned Clayton Silver-Lead-Zinc Mine in southeastern Idaho, U.S.A. The Clayton Silver Property is comprised of approximately 276 ha (684 acres) covering 29 patented and 6 unpatented mining claims in Custer County in mining-friendly Idaho, and includes the former producing Clayton silver-lead-zinc-copper mine with over 5,000 m of underground workings and development on eight levels. The registered office of CMX is located at 3700, 400 – 3rd Avenue S.W., Calgary, Alberta, T2P 4H2. CMX is a reporting issuer in each of the provinces of British Columbia, Alberta, Saskatchewan and Ontario. The Company’s subsidiary, CMX Gold & Silver (USA) Corp., is wholly-owned and was incorporated in the State of Idaho.
The Clayton Silver Property contains the old Clayton Silver Mine which operated steadily for 50 years until 1986, at which time the operation was shut down because of low commodity prices. The mine produced silver, lead and zinc, plus smaller amounts of copper and minor gold. Historical production records to 1986 indicate aggregate recovery of 7,031,110 Troy ounces of silver, 86,771,527 pounds of lead, 28,172,211 pounds of zinc, 1,664,177 pounds of copper, and minor amounts of gold from approximately 2,145,000 tonnes of ore. The old mine workings extended to a depth of 1,100 feet, but earlier drilling indicated that the mineralization likely extends at least 427 feet deeper than the 1,100 feet level. The mineralization is open to depth which suggests significant potential for the Clayton Silver Property. The strike length of the mined zone averages 410 feet with variable width due to the nature of the replacement. Historical production information, which is found in a Master’s Thesis prepared by B. Hillman written in 1986, is not NI 43-101 compliant, but CMX and the Company’s Qualified Person, consider this information to be reliable.
Clayton Silver Project
- The Clayton Silver Mine is an example of a replacement deposit in carbonate rocks
- 565 acres of 29 patented mining claims and 2 patented mill sites, plus 119 acres of 6 unpatented BLM lode claims
- Patented claims include surface ownership rights
- No government royalties, low property maintenance costs
- Old mine developed on 8 levels to 1100 ft depth
- Historical 6,000 m (19,690 ft) underground development
- Good year-round access; paved roads to property
- No legacy environmental issues
The Clayton Silver Mine was discovered in the late 1800’s and historically was one of the most active underground mines in the Bayhorse Mining District in central Idaho for lead, zinc, copper and silver. Clayton is comprised of 29 patented mining claims that cover 565 acres. The Company also holds 6 unpatented lode claims that cover 119 acres. Small scale mining operations were carried out on a regular basis from 1935 to 1986. Historical production records until mining operations ceased in 1986 indicate recovery of 7 million Troy ounces of silver, 86.8 million pounds of lead, 28.2 million pounds of zinc, 1.7 million pounds of copper, and minor gold. The old mine workings extended to a depth of 1,100 feet, but earlier drilling indicated that the mineralization likely extends 427 feet deeper than the 1,100 feet level. The strike length of the mined zone averages 410 feet with variable width due to the nature of the replacement. Historical production information, which is found in a Master’s Thesis prepared by B. Hillman written in 1986, is not NI 43-101 compliant, but the Company and the Qualified Person, Dr. Jennifer Thomson, who wrote the Clayton Report, consider this information to be reliable. The Clayton Report dated March 7, 2013, was prepared at the request of CMX so as to conform to NI 43-101.
The information below has been extracted from the Clayton Report and provides a summary of the physical setting, geology, mining history, and mineral exploration potential of the Clayton Exploration Project and provides recommendations for exploration. Certain figures and tables from the Clayton Report are included below. The remaining figures and tables are contained in the full Clayton Report, which has been filed on SEDAR at www.sedar.com, and a copy of which can be found under the Technical Report tab. Most of the information about the Clayton Exploration Project and surrounding areas are given in U.S. terms and units, although metric units are also used at times. References to currency are in U.S. dollars. For more information on the references used to identify the below tables, please see the Clayton Report.
Clayton Historical Information
Historic production, mainly of silver, lead and zinc, has a gross metal value using more recent prices of about USD $248 million ($20/oz silver, $0.85/lb lead and $1.00/lb zinc). The mine operated for several decades, mainly from the 1950s to the 1980s and was economic. Production ceased in 1986 because of low commodity prices, with active mining operations still in mineralization. CMX’s strategy is to run a mill that has twice or three times the capacity of the old mill, greatly improving economies of scale and increasing the present value of the potential resource. The mine and mill last operated using technology that is now 40 to 50 years old. CMX anticipates achieving many efficiencies using modern mining, milling and processing technologies.
Previous operators did very little exploration or development drilling to look for other resources. If resources with recoverable metals values several times what has been recovered previously are confirmed through drilling, the present value of the Clayton Silver Property will increase the enterprise value of CMX substantially. This would create share value many times greater than the current price.
Clayton Underground Potential
CMX considers the significant prize at the Clayton Silver Mine to be the potential for confirming and adding mineral resources underground. This is the Company’s primary long term goal. Our review of the historical data has led us to conclude that the potential upside is much greater than we initially thought. See our March 31, 2015 news release. Our geologist, Rick Walker’s analysis has shown the potential for proving up substantial ore reserves. Resources available from previous work include drilling for mining purposes on the North Ore Body at the 1100 foot level and deeper drilling several hundred feet below the old workings to the 1500 foot depth. There is also potential for resources to exist at shallower depths below and adjacent to the South Ore Body. All of this points to the possibility of finding resources that are many times more than what has been mined previously.
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Jan M. Alston B.A., LL.B., President & C.E.O.
Mr. Alston was born in Calgary, Alberta, Mr. Alston attended the University of Alberta where he obtained a BA in 1978 and an LLB in 1981. Mr. Alston has been involved in public junior natural resource companies for over 30 years. He practiced law in the 1980’s in the areas of business law, oil and gas, securities regulation and corporate finance. Mr. Alston has been a member of the Law Society of Alberta from 1982 to present (inactive list). He led the management team as President, Chief Executive Officer, director and co-founder of Purcell Energy Ltd., an oil and gas exploration and production company listed on the Toronto Stock Exchange. After sixteen years, Purcell in 2005 sold two-thirds of its oil and gas assets for more than $150 million and spun out Tenergy Ltd. From November 2005 Mr. Alston was Chief Executive Officer and director of Tenergy Ltd., a Toronto Stock Exchange-listed natural gas exploration and production company, until its sale in March 2006 for $92 million. Since 2006, he has been involved in several private businesses in management and as an investor.
Randal E. Squires B.Sc. (Bus. Admin), MBA, Chief Financial Officer
Mr. Squires is President of a commercial construction company in California. During his 21 year tenure he has held positions including Controller and Vice President of Business Development and Strategy. As Controller his responsibilities included budgeting, cash management, financial statement preparation and analysis, audit preparation, and bank, bonding and insurance relationship management. Mr. Squires has also held the position of Chief Financial Officer for Azteca Gold Corp. for the past six years. He received his M.B.A., Finance from Golden Gate University in 1995 and B.Sc. in Business Administration from Oregon State University in 1989.
James P. O’Sullivan, B.Sc., LL.B., Corporate Secretary
Mr. O’Sullivan is a senior associate lawyer in the Calgary office of Norton Rose Fulbright (Canada) LLP. His current practice focuses on providing corporate and commercial advice to junior issuers, including start-up and growth companies active in the energy, mining, healthcare and technology markets. Mr. O’Sullivan’s expertise includes corporate governance, regulatory compliance and continuous disclosure matters. He has extensive experience in financings, mergers and acquisitions and other corporate reorganizations. He also serves as corporate secretary for several Canadian public companies. Mr. O’Sullivan has been a member of the Law Society of Alberta since 2007.
Richard T. Walker M.Sc. (Geology), P. Geo., Consulting Geologist
Mr. Walker attended the University of Calgary where he obtained his B.Sc. (Geology) in 1986 and his M.Sc. (Geology) in 1989. He is a Professional Geologist registered with the Association of Professional Engineers and Geoscientists of British Columbia. With over 25 years of practical field experience working with organizations of all sizes from junior to major mining companies, both private and public in Canada, the United States and South America, Mr. Walker’s primary role has been management of exploration programs for precious metals (with an emphasis on silver) and base metals. He has successfully completed programs in diverse jurisdictions, including British Columbia, Alberta, Northwest Territories, Nunavut, Yukon Territory, Saskatchewan, New Brunswick, Montana, Alaska, Brazil, Peru, and Chile. Mr. Walker’s broad field experience includes geological, structural and alteration mapping of Proterozoic to Paleozoic sedimentary, metamorphic and igneous lithologies in undeformed to multiply deformed complex environments. His background includes experience with a variety of deposit types including porphyries, sedimentary exhalative (SEDEX), volcanogenic massive sulphides (VMS), low tonnage / high grade polymetallic vein and manto mineralization, industrial minerals, gold, silver, base metals, rare to strategic metals and diamonds. Mr. Walker provides consulting services through his firm, Dynamic Exploration Ltd., of which he has been President since 1996. He was the President of the East Kootenay Chamber of Mines (1994-2006) and a Director of the B.C. and Yukon Chamber of Mines (1999-2004).
Glen R. Alston, B.Comm., Corporate Development Consultant
Mr. Alston attended the University of Calgary where he obtained his B. Comm. in 1986. He has over 25 years of experience in executive and management roles with public junior mining exploration companies. Mr. Alston has been a senior officer and director of several junior companies, as well as being involved in many different aspects of the business, including stock exchange listings, corporate finance activities, corporate development, project management, and accounting and audit functions. He has extensive experience in facilitating exploration projects for precious metals, diamonds and base metals.
Robert B. Corrigan, Clayton Mine Project Consultant
Mr. Corrigan lives in Idaho, U.S.A. and as a youth spent time working some of the small mines in the state. He has a career spanning several decades with extensive experience in management and organization of heavy industry development, steel fabrication and erection, machine fabrication, industrial and municipal waste stream processing, power generation facilities, and mining property development and operation. Since 1976, Mr. Corrigan has been providing professional services as a business development consultant and/or owner-partner in heavy industry development projects, which have included development, management and finance of a U.S. $60+ million, 22 MW hydroelectric production and transmission facility in Belize, Central America, and as owners’ representative supervising construction of a 2.5 MW hydroelectric production facility in NW Colorado (production commenced April 15, 1993). Another major project was for the Shoshone-Bannock Tribes of Fort hall, Idaho where Mr. Corrigan conceived, organized, and managed development of a major steel fabrication facility. Mr. Corrigan joined the Idaho National Guard, 116th Armored Cavalry, at Pocatello, Idaho in 1950. He spent a total of seven years in the Guard, including three and one half years active duty, of which for 18 months he was based in South Korea where he managed the Army Field Maintenance Facility.
Lossie C. Alston, Senior Executive Assistant Consultant
Ms. Alston has over 25 years of experience at the executive level. She has worked closely with CEOs and senior executives of public and private companies, providing administrative support for numerous aspects of corporate affairs and governance. This has included all public company filings with regulatory agencies for annual/interim reports, news releases, preparation of corporate disclosure materials, such as investor presentations and related documents, and stock transfer matters. Ms. Alston’s executive support roles included coordinating executive schedules, travel arrangements, maintenance of filing systems, coordinating and arranging all outside corporate functions and executive meetings including annual meetings, board of directors’ meetings, acting as liaison between management, directors and shareholders, maintenance of corporate records, such as minute books, directors’ resolutions, and meetings’ minutes. Her office management responsibilities have included all aspects of human resources, office leasing and office procurement. In 2003, she was Project Manager for the head office consolidation with the amalgamation of Purcell Energy Ltd. and BelAir Energy Corporation. She has designed and created corporate websites, including this website. Ms. Alston studied accounting, finance and small business administration at the University of Lima (Integral Continuing Education Center –CIEC), Lima, Peru.
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