A G R E E M E N T
The undersigned Xxxx Xxxxxxxxx, owner of the mill tailings at Promontorio in the
State of Durango, Mexico, hereby grants exclusive permission to Engineer Xxxxx
X. Xxxx and assignees to treat and remove from all of those tailings any
contained mineral or metal under the,following provisions:
1. The term of this agreement shall be ten years.
2. Pray shall pay Xxxxxxxxx a royalty of five percent (5%) of all gross revenue
derived from the tailings.
3. Xxxxxxxxx shall retain ownership in all land and presently existing
improvements thereon, the use of which shall be fully available to Pray during
the term of this agreement.
4. Pray shall retain at all times full and complete ownership of all machinery,
equipment and supplies obtained by Pray for use on the project.
5. Pray shall assume responsibility for all aspects of land, road and forest use
during operations.
6. Xxxxxxxxx shall be notified when operations begin and when they cease.
7. All processing, production, transportation and sales records shall be
available for inspection by Echenique at any time.
Xxxx X. Xxxxxxxxx Xxxxx X. Xxxx
----------------------------- -------------------------
/s/ Xxxx X. Xxxxxxxxx date /s/ Xxxxx X. Xxxx date
address address
Comfort 000 Xxx 000 X. Xxxxxxxx
Toddeiond Casa Monrovia, CA 91016
27000 Mexico
PROMONTORIO
The material behind the Promontorio dam, built in 1890, was washed in behind the
dam by repeated rainfall across upstream Promontorio silver cyanide mill
tailings. This fill material reaches within a foot or so of the stone structure
top, and is regarded by Mexican government officials as sand and gravel.
Alluvial sand and gravel for construction is officially valued at 1,930 pesos
per cubic meter. The dam is estimated by Mexican officials to contain 30,000
cubic meters of sand and gravel.
Xxxx has an approved application to purchase the sand and gravel, which contains
all of my estimated 150,000 tons of the old silver tailings. The price is $0.34
(U.S) per ton. This amounts to $0.14. (U.S.) per ton with 150,000 tons used.
Payment for the material can be, made in three installments of $6,700 each, but
should be completed prior to any major activity on the property, such as road
building or equipment delivery.
Upon completion of the pilot plant work, which will result in obtaining the
proper scale-up tank sizes, an application to permit construction of a small
process plant will be submitted to the Durango State office of the Direccion
General de Minas. The plant products and effluent will be described in an
application for approval before the newly formed Secretaria de Ecology. A lease
will be obtained on a five acre parcel upon which to set the plant. This lease
will issue from the local resident woodcutters and cattle owners, all of whom
live primitive lives but who look upon nearby land use as part of their
business. An affidavit of this lease will be filed with the proper Department of
Agriculture office.
Water sources exist in nearby deep mines, drainages and springs. However, it
appears now that an independent water source on held ground is necessary to
assure an uninterrupted supply.
XX. XXXXX XXXX
PROMONTORIO
The silver mines of Durango, Mexico began production under Spanish rule 450
years ago. The Promontorio mines, in the District of El Oro, produced silver
during these historic years, until the nationalization of American and British
companies by President Cardenas in 1938. During the productive years, in 1890, a
dam was constructed across the major drainage below the mines and villages of
Promontorio. This dam, made of hand-hewn rock blocks, still stands intact, some
108 feet high and 200 feet wide. During the almost 50 years of operation prior
to 1938, sand tailings from the ore processing facilities near the mines
collected in an area on the edge of the major drainage pattern. Since that time,
fifty years of sporadic cloudbursts have transported the Promontorio sand
tailings downhill to the dam, where they now completely fill the volume behind
the giant wall.
In 1964 the Sol Naciente Mining Company, owned by Sr. Xxxxxxx Xxxxxxxx, examined
the tailings under the supervision of Engineer Xxxxxx Xxxxxxxxx. Ownership
passed to Engineer Xxxxxx Xxxxxxxxx shortly thereafter. in 1980 an agreement was
made between Xxxxxxxxx and Maguinara El Gorrion, S.A. (The Sparrow Machinery)
financed and operated by Xxx Xxxxxxx, lately of the NBA New York Xxxxxxxxxxxxx
basketball team. Xxxxxxx brought dozens of Promontorio tailings samples to
Mineral Research Laboratory for assay. His personal investment of $182,000,
during the period that silver was about $12 per ounce, was not a sufficient
amount to permit installation and start-up. Xxxxxxx relinquished his lease, and
Xxxxxxxxx left the concession to his surviving widow and son, Xxxx Xxxxxxxxx,
with whom the undersigned has a ten-year lease paying five percent royalty.
The tailing tonnage has been estimated to be:
Xxxxxxxxx 150,000 to 300,000 tons
Sparrow over 200,000 tons
Pray 175,000 tons
The silver value of the material behind the dam is reported to be:
Xxxxxxxxx 7 oz/ton
Sparrow samples 10 oz/ton
Pray samples 8 oz/ton
Many attempts have been made to extract the silver from these tailings.
Re-treatment by cyanide yields a very low silver recovery. The widespread
presence of manganese dioxide, as the mineral psilomelane, in the tailings and
in the vein rock of the region, points to the reason for refractory behavior. A
portion of the silver resides within the manganese mineral structure and, since
this mineral is unaffected by cyanide, the silver within is protected from
attack. The obvious approach is to dissolve the manganese then go after the
silver, and that is precisely the practise utilized in conventional ore
treatment. in this case, the process works admirably.
