Piedmont Announces Exploration Update At Trinity Silver Project, Nevada
Reno, NV – October 5, 2006 - Piedmont Mining Company, Inc. (PIED) today announced that an initial drill program of 10 angle core holes totaling approximately 3,700 feet was completed in mid-June at the Trinity Silver property. This program was designed to confirm the presence of silver mineralization encountered in previous drilling on the property in the mid-1980s and to provide geological information on the structural controls on mineralization. Assay results showed that 4 of the 10 new core holes contained 5 to 10 foot intervals of 10 ounces of silver per ton or better, with assays ranging up to almost 26 ounces per ton. These high-grade zones occur within broader, 20 to more than 100 feet wide zones of lower grade mineralization. Only 1 of the 10 holes showed no significant mineralization. Moderate to significant core loss occurred in the vicinity of many of the higher-grade intercepts.
These results confirm the presence of high-grade silver mineralization below and adjacent to the old pit. When our study of the new drilling data and recent remapping of the pit has been completed we will plan a second phase of drilling to pursue high-grade sulfide targets beneath and adjacent to the pit as well as a number of outlying targets on our land package, as indicated by previous drilling and structural interpretations.
The Trinity Silver property is located about 16 miles northwest of the town of Lovelock in Pershing County, Nevada, and about 25 miles northwest of the Rochester Silver Mine, one of the largest silver mines in the US. The property consists of 59 unpatented mining claims and about 5,000 acres of fee land, or about 5,800 acres in total.
Silver mineralization was discovered at the Trinity Silver property in 1981 by U.S. Borax, which operated an open pit mine on the property from 1987 to 1989 producing about 5 million ounces of silver from 1.1 million tons of ore before the property was then completely reclaimed. Reports by U.S. Borax after the cessation of mining indicated that the property still contains a significant silver resource. Primary silver mineralization occurs with sphalerite, galena and pyrite in veinlets and in the matrix of a brecciated rhyolite. Supergene enrichment appears to be significant. Previous testing shows that both the sulfide and the oxide mineralization have favorable metallurgical characteristics. The age of this mineralization appears to be about 25 million years, similar to the Majuba porphyry system to the northeast.
In September 2005 Piedmont signed a 5-year ‘Exploration and Development Agreement’ on the Trinity Silver property with AuEx, Inc., the U.S. subsidiary of AuEx Ventures, Inc. (TSX Venture Exchange: XAU), which leased this property package from Newmont Mining Corporation in July 2005. The work commitment in the first year of this agreement was $75,000 and in the second year of the agreement is $125,000. Piedmont has spent more than $300,000 to date on this project and has therefore more than satisfied the first 2 years of required work expenditures. We must expend $1,000,000 before September 16, 2008 to earn a 25% interest in the property. We may then spend another $1,000,000 before September 16, 2010 to earn a 51% interest. At that point, Piedmont may elect to enter a joint venture with AuEx, Inc. or spend another $2,000,000 on exploration and development to earn a 60% interest and then enter a joint venture. This property package can be purchased from Newmont for $500,000 prior to September 16, 2008 or for $1,000,000 after that date (such payment would be credited against our earn-in requirements), subject to certain clawback provisions by Newmont and a sliding royalty of up to 5% when silver prices exceed $10 per ounce (which royalty could be reduced by 1 percentage point under certain conditions). Piedmont may terminate this agreement on 30 days notice.
Piedmont is an exploration stage company with minimal revenues, limited assets and a $12.5 million tax-loss carryforward. It is now a fully reporting company with the SEC. Its Common Stock traded in the US electronic pink sheets under the symbol: PIED.
The Company includes the following cautionary statement in this news release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation reform Act of 1995 for forward-looking statements made by, or on behalf of, the Company. Forward-looking statements herein may involve risks and uncertainties that could cause results to differ materially from those expressed in the forward-looking statements, including statements about plans, objectives, goals, strategies, future events or performance, and assumptions that are other than statements of historical facts. These forward-looking statements may be based on various assumptions, which could be based upon further assumptions. The Company’s expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections will be achieved or accomplished.
Piedmont Mining Company, Inc. Reno, Nevada
