Armamar Meda

Advanced Exploration Stage Tungsten Concession in Portugal

Location

The Armamar Meda concession covers 436 km² located in north central Portugal, surrounding Colt’s Penedono project. Paved and gravel roads provide good access throughout the concession. Infrastructure and local resources are excellent. 

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Mineralization

The concession is situated at the border zone of two major geologic units, namely the Hercynian age Beiras granite batholiths and the Lower Cambrian Douro VaIley Schist-Greywacke Complex (SGC). The latter is comprised of shale, schist, siltstone, sandstone and greywacke, with subordinate conglomerate and carbonate beds that were folded, faulted and subsequently regionally metamorphosed. This was followed by intrusion of Hercynian granites that produced contact-metamorphic haloes in the meta-sediments.

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Exploration History

The regional history dates back to gold mining during Roman times near the town of Penedono. Small-scale tungsten mining took place during the 1940s spurred on by demand by the munitions industry during World War II. Tin was also mined on the concession. In the 1970s, government geologists discovered tungsten occurrences along the Tavora River. In 1981 and 1982, a consortium formed by SPE and SEREM explored the occurrences, including the completion of six diamond drill hales

Recent Exploration Work done by Colt

Colt’s 2008 exploration work covered the Tabuaço and Bebezes areas.

Channel sampling at the Sao Pedro das Àguias zone yielded some very significant results. Sampling of one skarn horizon yielded a weighted average of 0.36% W across a width of 23.30 metres.

The Quinta zone also yielded promising zones of tungsten mineralization. The first sampling campaign returned 1,033 ppm W across one metre of skarn outcrop. The subsequent and more detailed sampling campaign immediately south of this returned ten anomalous samples ranging from 204 to 8,125 ppm W. Mineralized intervals range from 0.53 to 5.90 metres with a 2.85 metre interval grading 0.73% W. Samples collected northwest of Quintã contain anomalous tungsten with values ranging up to 2,027 ppm W. This supports the hypothesis that tungsten mineralization associated with the Tavora anticline may extend northerly of the known mineralized zones. The implications are significant and present high priority exploration targets.

The Bebezes reconnaissance sampling revealed seven of nine samples containing over 200 ppm tungsten. Two samples contain over 10,000 ppm or 1% tin.

In summary, the 2008 sampling on the Armamar Meda concession combined with historic exploration indicates that significant areas of tungsten and tin mineralization are present.

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Interpretation and Conclusions (according to 43-101 report)

The earlier mining history and the more recent Colt exploration programs have identified several tungsten and tin mineralized areas on the Armamar Meda concession. It is apparent that the geological settings are favourable for the discovery of economic deposits. The extent of the known mineralized zones has yet to be fully tested or delineated. Colt’s 2008 exploration program has successfully met their objective of confirming the presence of and identifying high-grade tungsten potential at Tabuaço. The potential for significant tungsten-tin mineralization was revealed at the Bebezes area. The full potential of any of these mineralized areas have yet to be realized.

Recommended Exploration Program (according to 43-101 report)

A two-phase exploration program is planned and outlined as follows:

Phase I:
At Tabuaço, the program would consist of additional rock sampling to delineate the São Pedro das Âguias zone to the south. Prospecting and sampling should be conducted at the Quintã skarn zone and especially northwest along the Tavora anticline. Prospecting using Ultra-violet lamps will assist in tracing this and other tungsten bearing zones. In prospective areas, soil and heavy mineral sampling is recommended. Excavator work is recommended in accessible areas to test mineralization such as the Quintã and any northwest extensions. Access trails and drill sites could be built at the same time.

At Bebezes, more detailed prospecting, mapping and sampling of veins should be done. Where it is feasible, old vein excavations should be cleaned out in order to conduct representative sampling. Soil geochemical surveys (grid or contour traverse) should be conducted to delineate buried vein extensions.

Phase II:
This phase of work should include follow-up detailed sampling of new mineralized zones from the Phase I program. Reconnaissance drilling (two holes) is recommended at Quintã or any Quintã extension discovery. At Bebezes, trenching and drilling (1-2 holes) should be carried out.

The two phase exploration program is estimated to cost €125,000. At an exchange rate of CDN $1.60, this equates to CDN $200,000.

Financial Obligations

• The Initial Term of the Armamar Meda Exploration License is for three years (which started December 10, 2007) and can be extended twice on an annual basis. During the Initial Term, Colt is obligated to incur prospecting and exploration expenditures of not less than € 25,000 by December 10, 2008 (incurred), € 50,000 by December 10, 2009 and € 75,000 by December 10, 2010. Upon the expiry of the Initial Term, Colt shall be required to relinquish, on an annual basis, 50% of the area covered by the Armamar Meda Exploration License.
• During the Extended Term, Colt is obligated to incur exploration expenditures on an annual basis of not less than € 100,000. During this time, Colt is obligated to pay to the Government of Portugal and annual license fee in the amount of € 35 per sq. km. of ground covered by its license.
• Upon the completion of the Initial and Extended Terms, Colt may apply for an Exploitation License, which if granted, shall have a term of 30 years and which may be extended by the approval of the Portuguese Government, for a period not to exceed 20.
• Upon the granting of the Exploitation License, and in the event that mining activities are to take place, then Colt shall be obligated, at Colt’s sole discretion, either to pay 10% of the net income derived from its mining activities or, alternatively, pay Net Smelter Returns Royalty on production at NSR rates ranging from 1% to 4% depending on the price of gold. Additionally, as soon as the Exploitation License is granted to Colt, and provided that production from the mining activities is determined to exceed 1,000,000 ounces of gold or of gold equivalent during the life of the mining activities, then Colt will be obligated to pay € 100,000 as a commercial discovery bonus to the Government of Portugal.