Canadian firms in deal on Argentine mines

TORONTO, July 14 (UPI) -- A pair of Canadian companies has entered into talks concerning a split of interest in a northwestern Argentine region that one of the firms said may be the "next significant zinc camp in South America."

Latin American Minerals Inc. and Cadillac Ventures Inc., which both have headquarters in Toronto, said their talks consider a 50-50 interest in the Tendal VMS Project in Argentina.

Company releases were careful to state the deal is subject to approvals from both companies' boards of directors and applicable regulatory approval along with other conditions, including an opt out at any time by Cadillac.

Company releases, however, detailed a schedule of payments by which Cadillac would remit $300,000 and spend $5 million on exploration over three years. The payments would be made to the Latin American-Cadillac joint venture.

"The joint venture is formed now and during exploration and expenditure of Cadillac funds, Cadillac shall be operator and make all decisions regarding exploration," the releases dated June 16 state.

The proposal allows for Cadillac to increase its share of the venture after the three-year 50-50 period is up.

The Tendal project is in Argentina's La Rioja province and covers 91,000 acres at an elevation of about 10,000 feet. Latin American said the site is accessible via an all-season gravel road that runs approximately 10 miles south to the village of Jague. From there connecting major highways run between Argentine and Chile.

Latin American has conducted exploration in the Verdiona, La Catitis and Yegua Pircada target areas. The Verdiona area samples indicated a distinct surface showing of zinc, copper and lead, a release from Latin American said, over an area 1.2 miles long and 260 feet wide.

Cadillac said that while the zone hasn't been comprehensively examined below the surface, the company "intends to conduct immediately a program of surface geological mapping and sampling, as well as geochemical and geophysical surveys to lay the groundwork for a diamond drilling program to occur as soon as technically possible."

Latin American has said samples from drill holes indicate higher mineral grades than on the surface.

"The grades found in drill holes in Tendal are comparable to the average massive sulfide deposits in the world," a Latin American release said.

"Further drilling is required to define the volume or size of Tendal camp, but enough surface outcrop and geological indicators are present to conclude than Tendal could be the next significant zinc camp in South America."