Constitution Mining Makes Significant Discovery in the Gold Sands of Peru
Lima, Peru - July 23, 2010 - Constitution Mining Corp. (CMIN.OB) reports that drilling at its Peruvian Gold Sands project has uncovered two large, variable-grade systems of mineralization returning values as high as 212.95 milligrams of gold per cubic meter over widths of 4.20 meters (13.77 feet). Both systems lie near the surface, and both contain ore with gold grades well above the Company's targeted 50mg/cubic meter cutoff standard for economic consideration. Based on these results, the Company is developing plans for a pilot dredging and production operation as a preliminary step towards full-scale production.
To date, CMIN has completed 53 holes of its Phase II, 100-hole drill program in Gold Sands Drill Grid 1 (GSDG1). The drilling discovered two large auriferous fluvial channels that meander just below the surface. Within the channels, the higher-grade gold mineralization tended to be associated with higher concentrations of quartz pebbles.
The first system of gold mineralization (HBD-33) was discovered near the mid-point of GSDG1. Five holes were drilled using hand Banka drills at 20-meter spacing. Assuming a 50mg/cubic meter cutoff grade, the drilling yielded average gold grades of 159.3mg/cubic meter (within a range of 101.1 to 216.0 mg/cubic meter).
The width of the potential pay horizons averages 3.07 meters (10.07 feet) with a range of 2.2 meters to 4.70 meters. The gold is contained in volcanic-quartz type fluvial gravels beneath an average of only 2.73 meters (8.95 feet) of sandy overburden. CMIN believes that the shallowness and accessibility of this pay horizon could contribute significantly to the economic feasibility of CMIN's Gold Sands project.
The second system of gold mineralization (HBD-XX) trends northeast-southwest through GSDG1. It was identified in January 2010, during CMIN's Phase I drill program, by Banka holes 21, 22 and 23. Subsequent infill drilling, at 30-meter spacing, during the current Phase II program outlined an average grade of 86 mg/cubic meter along a linear 110 meter (361 feet) channel with an average width of 40 meters (131 feet). The grade of this fluvial system is well above the 50mg/cubic meter standard for economic consideration. As with the other fluvial channel discovered, it is close to surface.
James Prudden, Constitution Mining's Chief Geological Consultant commented, "The Gold Sands district is formed by meandering rivers that flow from the mouth of the Manseriche Gorge, which acts as a giant natural sluice box. Just below the gorge, these waterways deposit gold that was eroded and transported from the mountains of Peru and Ecuador. The process has been going on for millions of years. What we have discovered are two resulting channels of gold mineralization that lie near the surface and contain grades that far surpass our 50/mg standard cutoff requirement for economic consideration. Our technical focus now is to follow these channels through the entire district to build a base of potentially mineable gold while also looking to discover new channels of mineralization.''
Consultation With MTI Holland (IHC Merwede's Knowledge Center) Regarding Pilot Scale Production Between 2009 and 2010 Constitution Mining executives have had several meetings with senior representatives of Dutch-based dredging-equipment manufacturer MTI Holland/IHC Merwede to discuss the economic feasibility of putting a test dredging operation into production with the goal of moving into full-scale production as the project advances.
In a detailed report prepared for Constitution Mining by MTI Holland/IHC Merwede in 2009, it estimated that the costs of gold production will be US$1.60 - US$2.40 per cubic meter at full-scale production. Based on CMIN's current preliminary results and a gold price of $1,200/ounce, James Prudden calculates recoverable gold values from the HBD-33 channel to be approximately $6.15 per cubic meter.
Constitution Mining CEO, Dr. Michael Stocker stated, "Based on these results, pilot scale mining the above channels at a rate of 2,000 cubic meters per day appears to be feasible and justifiable."
In late August, MTI Holland/IHC Merwede is sending a senior consultant to visit Constitution's technical team in Lima, Peru to work on structuring a feasibility plan to determine the economic viability of implementing a pilot dredging and processing operation.
Dr. Stocker continued, "A successful pilot dredging operation could potentially generate substantial cash flow that can be used to offset the future costs associated with furthering the development of both Constitution's Gold Sands project and the gold assets in Nevada it has proposed to acquire from Seabridge Gold (SA: NYSE.AMEX)."
About The Phase II, 100-Hole Drill Program On April 8, 2010, Constitution Mining initiated a 100-hole drill program designed to define a measureable quantity of gold resources within a targeted zone on CMIN's 461 square kilometer (178 square mile) Gold Sands project and determine whether the gold that has been found to exist within this targeted zone is of sufficient quantity to support commercial production.
CMIN deployed 4 Banka drills which are currently drilling for 16-hours per day. Each drill is operated by 2 teams, each comprised of 8 laborers and 1 supervisor. More than 80 local area residents are now working on the project, including field geologists and laboratory personnel. Additionally, CMIN's churn drill is used selectively to drill holes to depths of up to 30 meters (98 feet), where deeper channels are believed to exist.
The Phase II 100-hole program consists of definition drilling a 2.5 square kilometer area that is situated over a large paleo channel identified during the 26-hole property-wide Phase I exploratory program. The drilling is being done on a grid of 4 lines, spaced 250 meters apart with holes on each line spaced at 100 meter intervals. The depth of the Banka holes is up to 12 meters (40 feet). Infill drilling is also being conducted, which is designed to follow the discovery channels and continue to expand on the mineralized zones.
Sampling Methods Drill samples 0.50 meter in length are processed at the drill site to support two compatible quality data bases. Each sample is screened, and the +4 mm fraction is analyzed for detailed sedimentological and lithological information, which is recorded in both graphical and columnar format. This detailed information enables the site geologist to define the stratigraphic levels encountered in the drilling, which aids in optimizing drill hole interpretation. Such information would be an important guide to value control during any dredging operation.
The second sample processing step is gravity concentration of the sand fraction. A wooden batea is operated by a trained native panner to process the sand fraction. The resulting individual gold grains are counted, and the total for the specific interval is noted in the related drill log.
Approximately 95% of all drill intervals analyzed so far contain some gold mineralization. Upwards of 672mg/cubic meter of gold was encountered in one drill sample (HBD-50). The higher gold values correlate with both increased grain weight and concentration, which also coincides with high quartz pebble percentages. Drill site procedures use an individual grain weight average of 0.010mg for field value estimates.
Gold morphology measurements, using Corey Shape Factor determinations, range from 0.01 to 0.33. The untarnished nature of the gold grains renders laboratory amalgamation direct and complete. Drill hole logging records #4 colors, which would indicate a gold size in the 100 to 200 mesh range. Larger gold grains have been logged in some drill samples.
Constitution Mining's VP of Exploration, Gary Artmont, evaluated today's news. "During my 33-year mining career, I have served as Chief Geologist for some of the world's largest and most successful mining companies, such as Freeport-McMoRan. While with Freeport, I oversaw the successful drilling of more than 120,000 meters in 17 different prospect areas that led to the discovery of more than 8 million ounces of gold. I believe what we are dealing with at our Gold Sands project has similar - perhaps even greater - potential."
About IHC Merwede Group IHC companies have been involved in the design and fabrication of dredge mining equipment since the end of the 19th century. Most of this equipment is used in dredge mining projects all around the world, thus generating a great deal of in-house knowledge and furthering technical development.
Beyond their important innovations such as like the dredging wheel, dredge mining automation systems, submerged pumping technology and track chain bucket ladder systems, IHC Merwede is constantly trying to improve on its state-of-the-art designs for dredge mining systems.
About Constitution Mining Corp. (CMIN.OB) The Company's goal is to locate large-scale commercially viable gold deposits and continuously increase the amount of gold underlying its outstanding shares. The Company is interested primarily in geographical areas that are home to several significant proven gold deposits, including highly prospective districts likely to hold further large deposits.
Peru The first and most active project is in the Gold Sands region of Peru - laid down by eons of alluvial erosion. For millions of years, the waters of the Santiago and the Maranon rivers have been carving their way through the gold-rich mountain canyons of the Andes, carrying off vast amounts of gold and depositing it in the loose gravels and sands - Gold Sands - in the area the Company now controls.
Results from test holes drilled during CMIN's 26-hole Phase I exploratory drill program indicate the presence of significant alluvial gold. The Company is now actively engaged in conducting a Phase II drill program focused on grid drilling a 2.5 square kilometer region. While the results from the Phase I drill program and the initial results of the Phase II, 100-hole drill program are highly favorable, further results are needed to determine the full feasibility of the project.
The full implementation of these programs will require the Company to secure additional financing.
Nevada On April 1st, 2010 CMIN executed a definitive and binding Asset Purchase Agreement with Seabridge Gold Inc. to acquire 30 Nevada-based gold projects comprised of 2,141 claims, primarily located in the heart of Nevada's prolific Walker Lane gold belt.
The most advanced project in the 30-property package of mineral claims the Company is seeking to acquire is the Castle Black Rock gold project in Esmeralda county, which has an NI-43-101-compliant gold resource of 215,000 ounces in the measured and indicated categories (12.38 million tonnes grading 0.54 gram of gold per tonne) and 93,000 ounces in the inferred category (7.95 million tonnes grading 0.37 gram of gold per tonne). For further information about the Nevada gold resources, click here: http://www.seabridgegold.net/resources.php.
The closing of the Agreement, which is anticipated to occur on or before September 30th, 2010, is subject to certain conditions, including, but not limited to: (1) Seabridge obtaining certain authorizations, approvals and consents necessary to transfer the assets to the Company; (2) the accuracy of the parties' representations and warranties; and (3) material performance of all of the agreements and obligations of the parties.
Further information about Constitution Mining Corp may be found at: http://www.ConstitutionMining.com.
On behalf of the Board: Dr. Michael Stocker - CEO Constitution Mining Corp. (CMIN.OB)
Disclaimer This release contains forward-looking statements that are based on beliefs of Constitution Mining Corp. management and reflect Constitution Mining Corp's current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities and Exchange Act of 1934, as amended. When we use in this release, the words "estimate," "project," "believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should," "will," "can," the negative of these words , or such other variations thereon, or comparable terminology, are all intended to identify forward looking statements. Such statements reflect the current views of Constitution Mining Corp. with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including but not limited to, risks and uncertainties pertaining to development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance , or achievement expressed or implied by such forward looking statements to differ materially from the forward looking statements. The information contained in this press release is historical in nature, has not been updated, and is current only to the date shown in this press release. This information may no longer be accurate and therefore you should not rely on the information contained in this press release. Constitution Mining Corp. cautions that it has not verified or confirmed the accuracy of the gold resource estimate concerning the Castle Black Rock gold project in Esmeralda county that was prepared at the direction of Seabridge in October 2000.To the extent permitted by law, Constitution Mining Corp. and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.