Max Resource revealed that it had secured 89 mineral applications for a total area of 1,757km2, in the Choco Province, located near 100km SW of the city of Medellin, Colombia during the second half of calendar year 2018.
Sixty three of the 89 applications, representing 1,270sqkm and collectively referred to as the “Choco Project” are outside or adjacent to the “Novita Project” area, which is the subject of the proposed Noble Metals Transaction. (see Max News Release dated 18 June 2018).
Compania Minera del Choco Pacifico (“Choco Pacific”) produced 1.5 million ounces of gold and 1.0 million ounces of platinum from the Choco district between 1906 to 1990, largely limited to an average depth of 8 meters or less.
The “Choco Project” covers or is adjacent to much of Choco Pacific’s historic exploration and production areas. The MAX applications include the “Big Flat”, a largely unexplored area of 100sqkm, hosting extensive historical workings.
Choco Pacific historic reports indicate that the underlying hard rock conglomerates, located within the “Choco Project” area, are anomalous to gold and platinum group elements.
The reports also indicate the hard rock conglomerates are shallow, extensive and generally flat lying with thicknesses from a few metres to 20 metres. (Source: R.J. Fletcher and Associates (2011) Review of Gold and Platinum Exploration and Production in Choco Province Colombia Part 3. Private Report for Condoto Platinum Ltd)
The Company’s exploration strategy is to confirm through current exploration programs, the presence of gold and platinum group elements and the lateral extent of these underlying hard rock conglomerates.
Max cautions investors it has yet to verify the historic information.
Trial Bulk Sample Program
MAX has now collected trial bulk samples over an area of 6 square kilometres, within one of its applications near the town of Novita to obtain geologic data, establish sampling methodology and develop a system for bulk sample processing and analysis.
Six test pits of 2m x 2m by 30cm deep were excavated by pneumatic hammer, each yielding 2500kg to 3000kg of hard rock conglomerate. Additionally, 50kg of conglomerate was collected from the base of a 12m thick conglomerate outcrop to provide an initial assessment through the thickness of the hard rock conglomerate horizon. (see accompanying map).
Roughly 50kg of conglomerate from each bulk sample along with the 12m outcrop sample have been shipped to Activation Laboratories Ltd (Actlabs) Medellin, Colombia preparation facility for processing prior to dispatch to the Actlabs Lancaster, Ontario facility for analysis. Analytical results are pending.
MAX’s geological team has identified a number of conglomerate occurrences throughout the Choco Project area. An evaluation and sampling program have commenced.
Max CEO Brett Matich said: “This bulk sampling program confirms historic reports of hard rock conglomerates underlying the alluvial gold bearing mineralization. Our initial evaluation of these conglomerates included one sighting of visible gold within the excavated material”.
“The lateral extent of the gold bearing conglomerates combined with the confirmed 12 metre thickness substantiates our belief the Choco Project is an exciting opportunity”.
Sampling and Assay Methodology
Sampling integrity is essential. The conglomerate surface is cleaned and a 2m by 2m square is marked. A pneumatic hammer then chips and breaks the conglomerate outcrop to a depth of 30cm.
The broken conglomerate is then collected in rice bags; approximately 25kg per bag. Each prenumbered bag is sealed by the geologist and transported to secure, locked storage at the Novita Camp, in Choco. Two bags per pit are then transported by Company personnel to the regional centre of Quibdo, where it transported to Medellin for pickup by Company personnel and transported to the Actlabs prep lab in Medellin.
The 50kg sample is crushed to 2 millimetres (2mm). The -2mm and +2mm fractions are separated by sieving. The -2mm is concentrated by hand panning with the resulting concentrate bagged for analysis.
The +2mm material is pulverized, then concentrated by hand panning with the resulting concentrate bagged for analysis. Samples from the -2mm and +2mm tailings from the concentrating are also taken for analysis.
All samples are sent from the prep lab to the Ancaster laboratory for gold fire assay analysis using a 30g charge. Activation Laboratories Ltd. Ancaster is an ISO 17025 accredited facility certified to 9001:2008. The Medellin prep lab is also 9001:2008 ISO certified.
Noble Metals Transaction
Max Resource Corp. entered into a binding Letter Agreement dated June 14, 208 with Noble Metals Ltd. (“Noble”) pursuant to which Max agreed to acquire three Noble subsidiaries – GPS Metals Lab Inc., Global Products Manufacture & Services S.A.S. and Condoto Platinum Limited (“Condoto”).
Although binding, the obligations of the parties under the Letter Agreement were subject to due diligence and other conditions.
During the course of its due diligence investigation, Max decided that it was only interested in purchasing the Condoto assets which, through a ‘Sucursal’ (a local branch formed in Colombia), include an exploration camp, a mineral concession and, most important to Max, rights of first refusal over the 105,975-hectare Novita Higher Community Council indigenous land package (the “Novita Project”) located in the Choco Department, Colombia, which is held by Noble and Condoto pursuant to a Tenement Assignment and Royalty Agreement with the Novita Higher Community Council dated January 25, 2011.
The parties propose to enter into a definitive asset purchase agreement that would supersede the Letter Agreement.
Under this definitive agreement, the parties intend to abandon the share purchase in favour of an asset purchase agreement in which Max will acquire all of the Condoto assets in exchange for $500,000 in cash and 26,665,896 Max common shares (the “Transaction”).
The Transaction remains subject to TSX Venture Exchange and shareholder approval, in addition to the execution of the definitive agreement, which will contain other closing conditions typical of transactions of this nature.
Upon closing of the Transaction, Noble will become a control person of MAX.
Max has already paid a non-refundable $100,000 deposit to Noble and, within five days after receipt of conditional approval from TSX Venture Exchange and execution of the definitive agreement, MAX will be required to pay an additional non-refundable deposit in the amount of $150,000.
On closing MAX will receive a credit against the cash portion of the purchase price for the $250,000 deposit.
There are no finders and no finder’s fee will be paid in connection with this Transaction.
Source: Company Press Release