Properties

Mexico: Joint Venture with Rochester Resources

As of January 21, 2009, E-Energy Ventures Inc. (“E-Energy” or the “Company”) acquired a 10% interest in Mina Real Mexico S.A. de C.V. (“Mina Real”), a private company incorporated in Mexico which is wholly owned by Rochester Resources Ltd. (TSX-Venture: RCT) (“Rochester”) for a cash payment of CDN$1.475 million.  As well, effective May 1, 2009, the Company acquired control and direction of a cumulative 6.25 million shares, or nearly 12.5% of the outstanding shares of Rochester through the purchase of 3.5 million shares for CDN$525,000, 2.75 million shares for CDN$550,000, and rights to 1.375 million share purchase warrants.

Identical terms of the acquisition were exercised by Cooper Minerals Inc. (“Cooper”), giving the Company and Cooper (collectively the “Partners”) 20% interest in Mina Real and 24.87% of Rochester.

Pursuant to the agreement, all net profit received from the operations from the Mina Real Property shall be divided on an 80%/20% basis between Rochester and the Partners, respectively with a fixed royalty of CDN$25,000 per month paid to the Partners.

Rochester is a junior gold/silver producer engaged in the production and continued exploration and development of its Mina Real and Santa Fe Properties in the State of Nayarit, Mexico, located in the Sierra Madre Occidental range.  This region is the most productive epithermal precious metal region in the world, which hosts the majority of Mexico’s gold and silver deposits.

Mina Real holds a 100% interest in the Mina Real Property, a gold/silver property with a footprint of 20,545 hectares (~20.6 km²), and an option to acquire 70% interest in the Santa Fe gold/silver property, with a surface area of 3,823 hectares (~3.8 km²), located immediately east of the Mina Real Property.  The Directors of Rochester believe they have discovered an entire gold/silver district at the Mina Real and Santa Fe Properties.

During the nine months ended February 28, 2009, a total of 24,930 tonnes were processed through the mill at the Mina Real mine, which was significantly below design production capabilities of the mill due to insufficient feed to run the mill at design parameters on a steady state.  Consequently, production for this period was 3,706 ounces gold equivalent (3,165 ounces gold and 48,780 ounces silver, at average grades of 4.4 grams/tonne Au and 115.1 grams/tonne Ag).  Net revenue for this period was $2.844 million, or $764.11 per ounce Au equivalent, while cost of operations was $4.701 million, or $1,269.84 per ounce, for a net loss of $505.73 per ounce. 

Production commencing January 2009 has ramped up to 6,814 tonnes for January and February 2009 being processed (annualized to ~41,000 tonnes), so Directors of E-Energy expects production to increase accordingly with marginal additional operational costs for the additional production.  Increase in production is significant to the bottom line for Rochester and its partners, however the Company views the exploration and development of the Mina Real and Santa Fe properties as the elements that will provide the opportunity for enhancing shareholder value of E-Energy.

To date, only 40% of the properties have been explored and over 60 vein structures have been identified at Mina Real and Santa Fe, with only 10% of the vein structures have been developed.  At Mina Real, three distinct areas with vein structures are being developed.   This includes:

• Tajos Cuates, where four different vein systems which has been traced greater than 2 kilometres at surface, with a potential which is estimated to be 1.5 million to 2.0 million tonnes ore is being developed.
• Macedo Area, where four primary vein structures have been identified and a trenching program of two of the identified areas have been completed.  Macedo is a vein that has been identified from surface work and it continues for 1 kilometre, with widths ranging from 1.5 metres to 2.0 metres, with some areas where the width is 20 metres.
• Florida-4 Vein System, which approximates a mining horizon that may range from 225 to 450 vertical metres, with a geological potential from 562,000 tonnes with grades of 4.0 g/tonne Au and 60 g/tonne silver to 2.25 million tonnes with of 8 g/tonne Au and 100 g/tonne Ag (source 43-101 Report, September 30, 2008).

The Santa Fe Property is subdivided into three areas:

• Clavenillos Area, which comprises of 3 major Vein Systems, including 5 kilometre of identified strike length and 60+ metres wide mineralized structure with three high grade veins emplaced within.
• San Jose Area, which comprises of 5 major Vein Systems with several other surface expressions noted.
• Samuel Area, which comprises of 5 Vein Systems with several secondary off shoots.

Rochester recently received the results of an extensive review of the geology, structural setting and mineralization of the Mina Real District, Nayarit State, Mexico, which was carried out by Dr. Tony Sparling, principal of Telluris Consulting Ltd. (“Telluris) of the United Kingdom, who reported to Dr. Alfredo Parra, Rochester’s Chief Operating Officer and Qualified Person (under 43.101).  Telluris is a geological consultancy established in 1993 that specializes in the application of structural and alteration studies to mineral deposits.  Dr. Starling has 19 years experience in Mexico and has been instrumental in the discovery of several new ore bodies throughout Mexico.  His findings support the Management of E-Energy and Rochester’s view of Minas Real being a discovery of a world-class gold/silver district.

The principal conclusions of Telluris review were:

• There are three main deformation events evident in the district;
• The exposed mineralization appears to represent the uppermost levels of an intermediate sulphidation epithermal system that has potential to be expanded at both depth and along strike;
• The mineralization may have undergone both hydrothermal and structural telescoping so that different stages of mineralization may be present at the current topographic level;
• Within the main structures there is a strong control by early to syn-mineralization andesite dykes whose margins have been preferentially sheared.  The same structures are also intruded by late- to post-mineral basalt dykes that are magnetic, relatively fresh and may provide a geophysical target;
• There may be an association with rhyolitic flow domes and the belief is that this area is a good analogue with the Bolanos District (Jalisco).

For more detailed description of Mina Real and Santa Fe properties, please click here.

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