Metalline Mining Company




Industry Links Int'l Zinc Assoc. Int'l Lead & Zinc Group Silver Institute Int'l Copper Assoc .	MINERALIZATION & PROJECT STATUS Metalline’s Sierra Mojada concessions contain two mineral systems separated by the east-west trending Sierra Mojada fault. Oxide Zinc mineralization occurs south of the fault and Silver Polymetallic mineralization (silver, copper, zinc, lead) occurs north of the fault. Both systems have been selectively mined for high grade ore that was direct shipped to smelters over an area in excess of 6 kilometers east-west and 1.5 kilometers north-south. The Oxide Zinc minerals are Hemimorphite a zinc silicate and Smithsonite a zinc carbonate. These minerals are soluble in sulfuric acid and may be recovered by acid leach and electrolytic reduction. The Silver Polymetallic minerals are Tetrahedrite a silver, copper sulfide, Sphalerite a zinc sulfide and Galena a lead sulfide. These sulfide minerals are concentrated by standard flotation techniques producing Tetrahedrite, Sphalerite and Galena concentrates. Metalline began exploration of these systems in 1996, initially on the Silver Polymetallic mineralization, with the intent to develop a large tonnage, mechanized mine and a sulfide flotation mill producing sulfide concentrates to be shipped to existing smelters. In late 1999 Reunion Ltd announced a positive feasibility study on the Skorpion oxide zinc deposit in Namibia, Africa, with cash operating costs of $0.25 per pound of zinc metal. From the 1950’s through 1985, the Mineros Nortenos Cooperativa had been mining plus 20% oxide zinc mineralization from the Unificacion Mineros Nortenos concession and direct shipping it to Zinc Nacional at Monterrey, Mexico. The low cost of production, indicated by the Skorpion study, shifted Metalline’s efforts to defining a resource on the oxide zinc mineralization of the Unificacion Mineros Nortenos concession located in the San Salvador, Encantada and Fronteriza mines. From 2000 to 2004 channel sampling and drilling was conducted to define a resource of a quality that justified initiating a feasibility study. The block model resource evaluation was conducted by Reserva International of Reno, Nevada. Green Team International (GTI) of Johannesburg, South Africa, was retained as the contractor to perform the study as they had been involved in the Skorpion study and the mine and refinery construction. MINTEK, located in Johannesburg, a large metallurgical laboratory was contracted to conduct the metallurgical study. Results of the metallurgical work indicates that an oxide zinc concentrate grading about 28% zinc metal can be produced at an overall recovery of about 80%. Pincock Allen & Holt (PAH), located in Denver, CO, was contracted to perform the mine plan portion of the study. Open pit and underground mining methods were investigated and an underground test mining study was proposed. PAH was requested to perform a new block model evaluation at lower cut-off grades than used in Reserva block model. The current model incorporates new drilling results and a complete suite of silver analyses that were not available when the previous model was generated. This model more than doubles the amount of zinc present in the deposit. The increase in the size and zinc content of the deposit, plus the addition of a potential by-product credit for silver associated with the Oxide Zinc mineralization, required that the Company re-investigate the optimum mine size, mining methods, and other economic and engineering factors. (View the Sierra Mojada Geology Presentation for examples of mineralization and grades.) Open pit mining is now considered to be effective on a deposit of this size and geometry. Open pit mining removes the production rate constraints that are inherent in the underground mining scenario that was previously being evaluated. A Whittle open pit optimization of the new resource model indicates that mining and processing rates might be as much as 5 times greater than the underground mine. This results in significant economies of scale and may allow market opportunities that are not available with a smaller underground operation. Preliminary evaluation of open pit mining suggests better economics and a much more profitable operation (related news release dated July 29, 2008). This change in resource requires that additional drilling on the Silver Polymetallic mineralization be conducted to upgrade the Silver Polymetallic mineralization to the quality required for a measured and indicate resource calculation and ultimate inclusion in an economic analysis. The Silver Polymetallic mineralization is known to parallel the Oxide Zinc mineralization in excess of the 1500 meters of the defined Oxide Zinc resource and extends another 1500 meters further to the west for a total strike length of 3 kilometers east-to-west. †It appears to be to 100-150 meters wide north-to-south and up to 100 meters thick vertically. The volume of the Silver Polymetallic mineralization is potentially at least as large as the volume of the Oxide Zinc system. The 2010 drilling program at Sierra Mojada is designed to upgrade the Silver Polymetallic mineralized area to a measured and indicated resource status. Drilling is being planned on a 100 meter x 40 meter grid pattern to accomplish this goal. †Concurrently metallurgical tests are underway to determine the best alternatives for processing this oxidized mineral suite. Website Copyright ©2010 Metalline Mining Company. All Rights Reserved.	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