Spain
Recursos Metalicos SL is now a wholly owned subsidiary of Mayfair Mining & Minerals, Inc. The assets of Recursos are comprised of a 100% interest in the Lomero-Poyatos and Masa Valverde polymetallic volcanic-hosted massive sulphide ( VHMS ) mining projects located in the Iberian Pyrite Belt of southern Spain. Recursos also holds applications for two further licences at El Alamo and Migollas East, also in the central Iberian Pyrite Belt.
Lomero-Poyatos
The Lomero-Poyatos project is a gold-focused poly-metallic, previously-producing pyrite mine and is comprised of a wholly-owned group of mining licenses covering the Lomero-Poyatos auriferous poly-metallic VHMS deposit, with the right for exploitation. These licenses are valid for 45 years, from 2001. Through Recursos, Cambridge expended approximately US $7.5 million on an extensive program of exploration and drilling during the years 2001-2005. Lomero-Poyatos is estimated, based on results from the aforementioned exploration and drilling program, to contain a measured and indicated resource of 3.71 million tonnes @3.26 grams/tonne Au, 27.9 grams/tonne Ag, 0.87% Cu, 1.57% Pb and 1.16% Zn at a 1.5 grams/tonne gold equivalent cut-off (to JORC standard). The Companys anticipated mining plan includes both underground and open-pit methods and the deposit is open at depth. The licenses cover an effective ground holding of 24 square kilometers and it is possible that, within this area, there are a number of other highly prospective targets that may provide a significant opportunity for further discoveries and resource extension. An independent Scoping Study based upon the above resource data was completed in 2005 and an independent NI 43-101 compliant report (Canada) was completed in April 2007, both by Wardell Armstrong International, based in the UK.
Masa Valverde
The Masa Valverde project is a base-metal exploration project in the Iberian Pyrite Belt. The permits, P.I. Valverde and P.I. Masa Valverde-2, cover an area of 38.71 square kilometers over the Masa Valverde polymetallic VHMS deposit located in the central part of the Iberian Pyrite Belt in south-western Spain. The project represents possibly the single largest unmined VHMS mineralized area in the region. Based on the drilling program outlined below, the deposit has VHMS and cupriferous stockwork mineralization which are estimated to contain geologic resources of around 100 million tonnes and 50 million tonnes, respectively.
At Masa Valverde, twenty five holes have been drilled at a spacing of approximately 100 meters. These drill holes have intersected up to 180 meters of massive sulphide and up to 111 meters of stockwork mineralization. Intersections include 45 meters grading 0.52% Cu, 4.26% Zn, 1.41grams/ton Au (massive sulphide) and 31 meters grading 1.71% Cu, 1.35% Zn (stockwork). The average thickness of the massive sulphide intersections is about 70 meters and the average for stockwork mineralization is 90 meters. We believe that the potential exists for a high grade deposit in the adjacent area of the sulphide mineralization. Potential also exists for the upgrading and extension of the stockwork mineralization.
Of the total of twenty five drill holes which were completed by previous operators between 1986 and 1993, nineteen tested the main gravity anomaly and six tested satellite anomalies. A total of thirteen of the nineteen holes intersected VHMS and well-developed mineralization. Based on this drilling, management believes that Masa Valverde represents the potential for a very large accumulation of sulphides with notable grades of copper, zinc and lead, with strong credits from gold and silver.
Drilling to date has been insufficient to properly evaluate this potential resource as the broad spacing may have missed certain areas, including potential high grade zones. Accordingly, further drilling and exploration work will be required to determine the nature and scope of the project.
Masa Valverde is situated close to and bears a number of similarities with the Aguas Tenidas base metal project owned by Iberian Minerals, which is currently going into production.
At Masa Valverde, based on in-house compilation and assessment of the drillhole data obtained by Adaro, a state-owned Spanish exploration company, a substantial resource of VHMS and stockwork sulphides exist which have been estimated as an Inferred Resource to JORC standard ( Australia ): 11.95 million tonnes @ 0.86 grams/tonne Au, 0.57% Cu, 4.30% Zn, 1.28% Pb, 42 grams/tonne Ag in massive sulphides and 79.95 million tonnes @ 0.43 grams/tonne Au, 0.76% Cu, 22.4 grams/tonnes Ag in the stockwork. A preliminary independent NI 43-101 compliant report (Canada) was completed on Masa Valverde for Cambridge Minerals in April 2007 by Wardell Armstrong International.
Both the Lomero-Poyatos and Masa Valverde deposits have, management believes, excellent exploration upside potential.
El Alamo (-Tintillo)
Is a license application covering prospective ground, extending East from ground held by Rio Tinto, with indications of high polymetallic VHMS deposits. The license area covers 6,347 hectares, covering the prospective horizon that hosts El Tintillo, an un-mined, near surface, potentially high grade deposit previously investigated by Boliden Espana. The acreage includes other mines and occurrences of base metals and also areas with gold anomalies.
Migollas East
Is a licence application extending east from the cupriferous Migollas VHMS orebody in close proximity to the Sotiel and Migollas Mines.
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Zambia
Mayfair Mining's Zambian licenses include the Funzwe River alluvial gold-platinum project, located on a geological feature called the Mpande Dome that lies between the Mwembeshi Shear Zone and the Mushika Machete Shear Zone. The Company also holds four licenses in the Mapatizya Amethyst producing area, located in the Kalomo District of Zambia, the world's premier amethyst producing area.
For sixty years, mining has been the backbone of Zambia's economy, during which time the country has established some of the world's largest copper mines and produced 30 million tons of copper metal. Since independence and the decline of its copper industry, other minerals have assumed importance. Gem production, mostly by small scale miners, has put Zambia on the world map as a source of emeralds, aquamarine, amethyst, tourmaline and garnets. Until recently, gold was always in a minority position. The Government of Zambia is totally committed to supporting and promoting the mining sector and has created a highly favourable investment climate to encourage foreign investors to contribute to the expansion of Zambia's mining industry.
In recent years there has been a surge in interest in gold exploration in Zambia that has attracted major operators to the country. Gold occurrences discovered to date are associated with linear belts bounded by major shear zones. The key shear zones are: Kpiri Mposhi Mkushi Shear Zone; Mwembeshi Shear Zone; and, Mushika Machete Shear Zone. Between these zones, many gold occurrences are associated with greenstones, but the most significant occurrences are associated with dome-like features of the basement that have proved prospective for gold and other minerals, including platinum group metals and nickel.
Zambia is a politically stable country in central southern Africa with 11.0 million inhabitants. It has common borders with Angola, the Democratic Republic of Congo, Tanzania, Malawi, Mozambique, Zimbabwe, Botswana and Namibia. The country achieved independence from colonial law in 1964 when the Federation of Rhodesia and Nyasaland was dissolved and the former British colony Northern Rhodesia became the Republic of Zambia.
Today, Zambia is diversifying its economy. Minerals besides copper and cobalt have gained significantly in importance. The government implemented a new Mining Act in 1995 paving the way for it to withdraw from the mining business by privatizing the mines and easing fiscal pressure on the miners. A well developed electricity and transport infrastructure already exists in the mining centres. Zambia possesses a large pool of skilled workers and has a well-established system of tertiary education providing a qualified workforce to meet the needs of this expanding industry. Both the Ministry of Mines and Development and other Zambian regulatory institutions are working closely with prospective investors.
ZAMBIA PROJECTS
The
Mayfair Mining's Zambian licenses consist of two prospective mining projects:
4
Mapatizya Amethyst concessions
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Funzwe River alluvial gold-platinum license
The Mapatizya Amethyst concessions encompass over 600 hectares located in the Kalomo District of Zambia, approximately 115 kilometres from Kalomo Town and 415 kilometres from Kafue. Mapatizya is the principal amethyst mining area in Zambia. Access to the area is possible throughout the dry season by a feeder road branching off seven kilometres before Kalomo. The road is maintained by the Government and can accommodate heavy trucks. There is good infrastructure in the region and good road access to the concessions. Mayfair Mining's concessions surround the property of Kariba Minerals, which hosts the largest amethyst-producing mine in Zambia and one of the largest in the world.
The Funzwe River license covers an area of approximately 70 square kilometres located approximately 30 kilometres to the northwest of Kafue, a communications junction and industrial town where the Company's commercial premises are based. The license area is accessible by tarmac and graded bush roads during good weather conditions. An operational base has been created on the property, but administration is coordinated from Kafue.
Ownership
On January 17, 2005, Mayfair Mining entered into a Joint Venture Agreement with two Zambian corporations owned by the Nyendwa Family of Kafue, Zambia. Pursuant to the agreement, the Company incorporated a new Zambian joint venture company, Mayfair Mining & Minerals (Zambia) Limited. The new Zambian joint venture subsidiary is owned 70% by Mayfair Mining & Minerals (UK) Limited, a wholly-owned subsidiary of Mayfair Mining, and 30% by the Nyendwa Family. In return for their 30% ownership, the Nyendwa Family transferred all of their rights and interests in two prospective mining projects, Funzwe River and the Mapatizya Concessions, to Mayfair Zambia. In 2008, Mayfair Mining purchased the residual 30% of the Zambian subsidiary in an all share transaction. Mayfair Mining & Minerals, Inc. now owns 100% of Mayfair Mining & Minerals ( Zambia ) Ltd.
The
Nyendwa Familys companies were founded in 1991 and they have
considerable experience in the Zambian mining industry.
GEOLOGY OF THE PROJECTS
Mapatizya Amethyst Concessions
The Mapatizya amethyst concessions consist of a group of four mining concessions near Lake Kariba, in the principal Zambian amethyst producing area. These concessions may contain a significant gemstone resource, as indicated by the limited preliminary work of the Geological Survey of Zambia.
The Mapatizya amethyst concessions are underlain by gneisses consisting of quartzo-feldspathic, fine-grained, granulitic gneisses, migmatic gneisses and well banded gneisses. The amethyst mineralization occurs as stockworks in fractures and fault zones within the country rocks. The veins are irregular and may be up to two metres thick and up to 100 metres in length in the host volcanic marbles with a generally northeasterly trend. The depth of mineralization ranges from 20 metres to 50 metres.
Funzwe River License
Mayfair Mining's Funzwe River license license is located on a geological feature referred to as the Mpande Dome. This gold prospecting area lies between the Mwembeshi Shear Zone and the Mushika Machete Shear Zone. The geology of the Mpande Dome is dominated by the Basement Super Group consisting of gneiss and quartzite overlain by meta-dolerite, tuff and meta-basalt, which, in turn, is overlain by the Katanga Super Group consisting of schist, carbonate, quartzite and conglomerate. The Mpande Dome is the location of many gold occurrences, 19 of which have been recorded as significant. These occurrences are mostly associated with greenstones, but the most significant occurrences are associated with the dome-like features of the basement, which have proved promising for gold and other minerals such as platinum group metals and nickel.
Work to date on the Funzwe River license has identified limited occurrences of bedrock gold, elluvial gold, alluvial gold, and alluvial PGMs, all of yet-undetermined qualities and quantities. Mayfair Mining has identified ten areas of potential alluvial gold bearing sediments within the Funzwe River license area. There is no assurance that any of the results at Funzwe River will be consistent or sustained without further exploration, development and testing.
Past Exploration Work
Limited work has been previously conducted on Mayfair Mining's Zambian licenses. Between 1960 and 1983, all of the licenses in the Mapatizya area were prospected by Northern Minerals, although no significant production was undertaken and in 1983, small scale trial production was undertaken by a private individual who later abandoned the licenses after producing approximately 30 tons of amethyst. Between 1992 and 2004, Mwaca Mining and Minerals took over the licenses and conducted exploration and small scale mining. Approximately 400 tons of amethyst was produced and sold.
The Funzwe River license area was subject to cursory prospecting by the Geological Survey Department of Zambia. In the 1980's, Anglo American prospected using geochemistry and geophysics throughout the area and reportedly found sub-economic copper with associated gold.
Amethyst Production and Marketing
Mayfair Mining commenced limited production of the Mapatizya amethyst in 2005. The Company has recorded an increase in the production of the Mapatizya amethyst during the 2008/2009 fiscal years and in early 2009 the Company had successfully implemented operations, sales and marketing of its amethyst production to Hong Kong. Mine life is anticipated to be 80 to 100 years.
Marketing
Coloured gemstone prices are generally determined by supply and demand. Based on data from the U.S. International Trade Centre, the three largest markets for loose finished gemstones are the United States, Europe and Japan, which account for $1.341 billion, while the markets for rough unfinished stones are Thailand, India and China, which account for $695 million. Thailand and India are the main cutting centres that acquire bulk shipments of rough stones and then export the finished product to the United States and European markets. Hong Kong has become the major stone brokerage centre for mainland China.
Demand for amethyst is so great that Mayfair Mining expects to be able to sell all of its production, from the low-grade industrial quartz to the high-end gem quality, each month.
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AN OVERVIEW of the AMETHYST MARKET IN ZAMBIA
Amethyst, a popular gemstone found in many countries, is the purple and most valuable variety of quartz. If it were not so widely available, its unparalleled color would make it very expensive. Zambia is one of the leading producers of high-quality amethysts, second only to Brazil. In Zambia, amethyst is currently being mined in the Mwakambwiko Hills near Lake Kariba, where the concessions of Mayfair Mining are also concentrated. It occurs here in veins and stockworks generated during late-Karoo or post-Karoo tectonism. One of the best qualities of this gemstone is that almost all grades and sizes are marketable from high gemstone quality and cabochons to bits and off-cuts sold in bulk, resulting in almost no waste.
Zambian amethysts are among the most beautiful and valuable in the world. Many expensive amethysts of an intense violet with red flashes come from Zambian mine fields. Zambian amethysts are distributed mainly to the Asian countries of China, India, Japan and Thailand. The growing economies of these regions have increased consumer demand. Consequently, the price for amethysts on the world market should continue to improve. Because larger mining operations concentrate on more valuable diamonds, sapphires and emeralds, the total supply of amethysts remains limited. For the Zambian government these current economic facts have triggered the redevelopment of the Zambian gemstone industry through privatization under the Mining Sector Diversification Program. This process started in 2002 and was financially supported by the European Development Fund. The Ministry of Mines and Mineral Development welcomes the efforts of Mayfair Mining, which is re-designing and modernizing the properties in the Mapatizya area, where one of the biggest amethyst deposits in the world, Kalomo Mapatizya, is located. Kalomo Mapatizya is estimated to have 2.5 million tons of ore with approximately 72,000 tons of run-of-mine amethyst, or more than 2.6 million kilograms of high and middle grade saleable amethyst plus unlimited amounts of low-grade amethyst. Despite this, the annual production of amethyst in Zambia is still relatively low, at about 700 tons of high-grade stones. However, the potential is very substantial as the extent of the high-quality stones becomes apparent.
The amethyst business, in common with the coloured stone industry, is generally determined by supply and demand and research has shown that the global coloured stone market is valued at approximately US$2.0 billion. Based on data from the United States International Trade Centre, the three largest markets for loose, finished coloured gemstones are the United States, Europe and Japan, accounting for approximately US$1.34 billion. Rough, unfinished stones account for US$695 million, with Thailand, India and China being the largest markets.
Zambian government statistics show that since 2000, the value of amethyst exports has not fallen below US$3.0 million per annum. This is second only to the value of the export of emeralds. The bulk of available amethysts come from the Mapatizya area where Mayfair Mining's licenses are located.
Most amethyst producers in the Mapatizya area are small scale and under-funded, unable to service serious overseas markets. An attempt by the Kalomo Miners Association to develop a central processing facility with the help of the Mining Sector Diversification Program is unlikely to create conditions for the servicing of large scale overseas orders. The only real commercial competitor in the amethyst market is Kariba Minerals, formerly state-owned and a large producer of amethyst marketed directly to overseas markets.
Most small amethyst producers market their product through intermediaries and thus do not gain the full value of their product. The key to profitable operation is large scale production, value enhancement through sorting and grading and direct marketing to major brokers and end users in India, Hong Kong and Mainland China. Mayfair Zambia plans to concentrate on the production of a graded product with the bulk material supplied to the Indian and Chinese markets and the high quality faceting material supplied to Thailand, Europe and the United States.
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