Luzon Minerals Ltd.

COMPANY DATA | INTRODUCTION | PROPERTIES IN HAND | MANAGEMENT  
NEWS UPDATE | CHINESE

COMPANY DATA

INTRODUCTION

Luzon Minerals Ltd. is a junior mineral exploration company focusing on gold, and other precious metals and targeting opportunities in under-explored mineral belts that have the potential to yield world-class deposits. Luzon Minerals Ltd. intends to become a small precious metals producer (100,000 - 200,000 ounce/year Au equiv.) with good exploration properties that give the shareholder a realistic chance of share price appreciation with exploration success. Ultimately, exploration will be funded with cash flow from operations.

PROPERTIES IN HAND

(1) El Porvenir, Mexico

The El Porvenir Property is an advanced stage gold/silver exploration property located in the Real de Asientos Mining District in the northeast of the State of Aguascalientes, Mexico, approximately 44 km northeast of the City of Aguascalientes. The property consists of two concessions covering 580 hectares and is well located with respect to infrastructure and services, with a power line and secondary highway transecting the property. A local source of water is available and there is access to a skilled labour force.

The Real de Asientos District was discovered in 1548 and has been mined on an intermittent basis since that time. Two main types of ore have been historically produced: copper/silver ore and lead/zinc/silver, all from underground workings. The main periods of activity were from the late-1800's through 1923 and from 1962 - 1982. Luismin S.A. de C.V. has owned the property since 1980 through its subsidiary company Minera Real de Asientos y Anexos S.A. de C.V.

Two types of deposits are known in the District: quartz-carbonate-sulphide veins from which most of the production has occurred, and replacement bodies. Two major vein systems are recognized, one of which trends north-south to N 20° W and one which trends N 50° to N 60° W. The Porvenir and San Jeronimo veins on the ground optioned by Luzon are in the first group.

The Porvenir vein generally varies from 1 to 5 metres in width, although occasional replacement bodies of massive sulphide of up to 30 metres in width have been encountered. Near the surface, the vein horsetails into a stockworks zone which is up to 60 m in width. It is this stockworks zone that hosts the oxide gold/silver occurrence that is of interest to Luzon.

During the 1990's several exploration programs were conducted on the El Porvenir property by Luismin and various partners including Hecla Mining Company. Inclusive of Hecla's expenditures, Luismin records show that $US 3.58 million has been spent on the El Porvenir Property since 1992. This exploration work includes 175 drill holes for a total of 24,451 metres.

This drilling has delineated a zone with oxidized gold/silver mineralization that extends for about 800 m along strike, to a depth of about 150 m below surface, and has an average true thickness of about 30 m. Luismin has calculated an indicated resource of 9.9 million tonnes grading 1.01 gpt gold and 22.9 gpt silver, containing 322,000 ounces gold and 7.3 million ounces of silver.

At least three series of metallurgical tests have been done on material from the Porvenir structure, in 1996, May 1997 and June 1997. As might be expected, this work has found that gold recovery is dependent on crush size; however, it appears that reasonable recoveries might be expected at crush sizes consistent with heap leach exploitation.

At current metals prices, Luzon believes that the El Porvenir can be advanced to feasibility study and production (at a rate of 20,000 - 30,000 ounces per year) fairly quickly and intends to pursue that route. Current work is focusing on improving the grade of the deposit, as previous drilling did not cut all gold bearing structures.

Preliminary economics look promising. At a gold price of $340/ounce, a production rate of 1,000,000 tonnes per year and a recovery of 65%, the project has a potential Net Present Value of $US 8 million. An increase in head grade to just 1.3 gpt (which the Company believes is achievable), improves the potential Net Present Value to $US 17 million. (Please note that these numbers have been generated in-house and should be regarded as scoping-study level only)

To ear an 80% interest in the El Porvenir Property, Luzon must spend $US 2.5 million over a four-year period. First year expenditure is modest, at $US 100,000.

(2) Villa de Ramos, Mexico

The Villa de Ramos Property is located in State of San Luis Potosi in Central Mexico, about 70 km east of the City of Zacatecas. This property consists of 7 concessions covering 1,088 hectares and the property is close to infrastructure.

The mineral occurrence of interest at Villa de Ramos is a series of parallel epithermal veins that run for a strike length of over 2 km. The main two veins in the system consistently range from 2 m to 10 m. This system is within four km of a mining district that produced for 300 years from up to 27 shafts. Samples from old mine dumps in that district assayed 5% copper, 4% lead, 5% zinc and up to 1,400 gpt (41 opt) silver. Old records for two years, 1869 and 1900 were obtained, which showed smelter receipts for 3,034 tonnes of ore grading 3,470 gpt silver, 6.12% lead, 9.43% copper and 7.7% zinc. This ore would have been hand-sorted and should only be taken as a reflection of the potential of Luzon's property.

The Villa de Ramos mining district was discovered in early 17th century. The Santiago Patrona was the first mine discovered in 1636 producing large amounts of silver; however, the exact amount of ore is unknown. In 1640 and again in 1652, the mines came under attack by Indians, who destroyed most of the mining facilities, killing miners and ultimately caused the owners to abandon the mines. In 1708 a very high-grade ore shoot was discovered in the Cocinera mine, with a further major discovery in 1796. In 1826 the Villa de Ramos mining district was listed in second place amongst the silver producers in Mexico. The mines of the Villa de Ramos District closed permanently in about 1925 with reports of difficulties in keeping the workings dewatered. Very little work has been done in the district since this time, although it is known that Grupo Mexico owned the properties for many years, perhaps thinking that a major porphyry copper system was associated with the high grade veins.

The Villa de Ramos prospect of Luzon is a grassroots property. The veins are parallel to and appear to be of the same tenor as the nearby mining district. The Company's geologists believe that the veins on their property have been down faulted related to the veins mined in the past. As such, at surface, only the top of the epithermal system is exposed, above the zone of metals deposition. This has been confirmed by a fluid inclusions expert, who believes that the main metal bearing zone of the veins on their property would be in the order of 100 m below surface. Surface sampling indicates the presence of gold and silver in the system, with sample results as high as 1.2 gpt gold and 11 gpt silver.

It is intended to test this extremely interesting target in the coming months with surface sampling and geophysics, followed by drilling.

To earn a 75% interest in the Villa de Ramos Property, Luzon must spend $US 2.5 million over a five-year period. First year expenditure is $US 100,000. Wheaton River has a clawback clause to a 55% interest (Luzon 45%) at feasibility.

MANAGEMENT

Luzon Minerals Ltd. has a strong management team with experience in different fields. The management team includes:

James A. Currie - Mr. Currie is the President of Luzon and is a mining engineer with more than 24 years experience in the industry, having worked in operations and development in Canada, the United States and S.E. Asia. Early in his career he worked for such major companies as Placer-Dome, Noranda and Fording Coal. In recent years, he has worked as a senior executive for a number of junior exploration and development companies including: Queenstake Resources Ltd., Cornucopia Resources Ltd., and most recently, Ivanhoe Mines Ltd., where he was responsible for Ivanhoe's activities in Myanmar and was a member of the Board of Directors of Myanmar Ivanhoe Copper Mines Ltd. Mr. Currie is also Vice-President of Behre Dolbear and Company Ltd., the Canadian arm of Behre Dolbear and Company Inc., an international minerals consultancy based out of Denver, Colorado.

Peter W. Dunfield - Mr. Dunfield is a Certified General Accountant who has 15 years experience in the mining industry. He has acted as an Officer and Director for a number of exploration and development companies.

The rest of the management members include:

Terence Betker, P.Ag., C.A.C., Director
Marion McGrath, Director
David G. Vincent, B.Comm., LL.B., Director
June Ballant, Corporate Secretary

NEWS UPDATE

On March 15, 2004, Luzon Minerals Ltd. announced the following report on its properties:

Liphichi Project, Bolivia

The portal on Level 2 of the Liphichi Project has been rehabilitated and a laydown area established outside the portal. Underground mining equipment including jacklegs, ore cars and a compressor have arrived on site and work is progressing on slashing out the existing 1.2 m x 1.2 m drift to 1.8 m x 1.8 m in order to facilitate transport of the diamond drill to the various drilling locations. A drilling contract has been entered into with Leduc Diamond Drilling of La Paz and a diamond drill will be mobilized to the site shortly.

Tepalcateno Property, Durango, Mexico

The Company has just completed an NSAMT geophysics survey at its Tepalcateno Property in Mexico, which was undertaken by Zonge Engineering of Tucson, Arizona. The program was designed to follow a gold mineralized structure below the pediment and to locate potential conductive zones at depth in order to guide future drilling efforts.

Amayapampa Project, Bolivia

The Company continues its due diligence program on the Amayapampa Development Project in Bolivia, optioned from Vista Gold Inc. The main focus of the Company's current efforts is the negotiation of a socio-economic agreement with the local communities surrounding the project. Negotiations are currently proceeding according to schedule.

Finally, the Company has commenced preliminary discussions with financial institutions related to construction of the Amayapampa Project. Initial cash costs are estimated by RPA to be US$6 million including working capital.

On March 02, 2004, Luzon Minerals Ltd. announced the completion of its private placement pursuant to which the Company raised gross proceeds of $2,525,300 through the sale of 6,313,250 units, each unit consisting of one common share of the Company and a one half two-year purchase warrant with one whole warrant entitling the placee holding the same to purchase one additional common share of the Company for $0.50 per share.

On February 16, 2004, Luzon Minerals Ltd. reported that it has retained First Canadian Capital Corp., a Toronto based company specializing in corporate finance and communications, to provide Luzon with Investor Relations services. Luzon is also pleased that it has entered into a consulting agreement with Scott F. Gibson & Company Inc., a Vancouver based consulting firm. Luzon also announced the appointment of Mr. Derek C. Rance to the Board of Directors of Luzon. Mr. Rance has more than 40 years' experience in the mining industry and was previously President and CEO of Iron Ore Company of Canada, Cape Breton Development Corporation and Behre Dolbear and Company Ltd.

On February 10, 2004, Luzon Minerals Ltd. reported that a Technical Report compliant with NI 43-101 on the Amayapampa Gold Project in Bolivia has now been prepared by Roscoe Postle Associates Inc. and filed on SEDAR on February 10, 2004. 

On February 05, 2004, Luzon Minerals Ltd. announced that the TSX Venture Exchange has accepted for filing an Option Agreement dated December 29, 2003 between the Company and Exploraciones del Altiplano, S.A. de C.V., whereby the Company has an option to acquire a100% interest in the Tepalcanteno Gold Property located in the municipality of San Luis de Cordero, Durango, Mexico.

On January 23, 2004, Luzon Minerals Ltd. announced that the TSX Venture Exchange has accepted for filing a Property Option Agreement dated December 16, 2003 between the Company and Vista Gold Corp., whereby the Company has an option to acquire a 100% in Vista Gold Corp.'s Amayapampa Project, Bolivia.

On January 20, 2004, Luzon Minerals Ltd. announced that an extensive exploration program is about to commence at its Liphichi Gold Project in Bolivia. This program will consist of underground drifting and diamond drilling to confirm and extend a wide, gold bearing structure on the property.

On January 08, 2004, Luzon Minerals Ltd. announced the further disclosure related to the Amayapampa Gold Project in Bolivia, recently optioned from Vista Gold Corp. ("Vista") The Amayapampa Project is an advanced stage gold project which has been the subject of considerable study and exploration effort including feasibility studies in 1997 and 2000 by Vista. In the work conducted by Vista in 2000, an open pit designed at a gold price of $300/oz has 526,000 contained ounces of proven and probable mineral reserves (unoptimized) and 448,000 contained ounces (optimized). The Project has had an Environmental Impact Study done, and the approval to construct and operate called the Declaratoria de Impacto Ambiental was issued to Vista on May 6, 1998. The Company is reviewing this work and will be holding discussions with the Bolivian Government in January 2004 to determine whether any amendments are required to the Environment Impact Study and the permit to construct and operate.

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