VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 17, 2012) - Douglas Scheving, CFO and Corporate Secretary is pleased to report that Columbus Energy Limited, ("CEL" or the "Company") (TSX VENTURE:CEL) has entered into an agreement with Jacqueline Halliday whereby the Company has acquired the right to purchase a 99.9% interest in Minera de Rio Guadiato S.L. ("Minera") which owns the right to 100% of the El Paredon mineral rights in the La Nava-El Paredon Mineral Concession, which is located in the north western part of Cordoba Province, and some 50km north west of the provincial capital Cordoba.
The consideration to be paid for 99.9% of the shares of Minera (Spanish law requires that a Spanish national has 0.1% of the shares) is $230,000 in common shares of the company at a deemed price of $0.05 per share and a 2.5% Net Smelter Return. This is a non-arms length transaction. This is the historic cost of acquisition, holding costs, and exploration and development of the project.
The Mineral Concession is located towards the north western end of the "Eje Magmatica" (Magmatic Axis), a belt of Lower Carboniferous volcano-sedimentary strata with important Hercynian intrusives. Felsic tuffs within this belt host a small but relatively high-grade, near-surface polymetallic volcanogenic sulphide deposit at El Paredon which is situated within the Mineral Concession.
The El Paredon deposit is hosted by the volcano-sedimentary strata of the Erillas Volcanic Complex. It is situated on the western flank of the shallow Nava-El Paredon Syncline.
At El Paredon, the basal carboniferous sedimentary sequence is overlain by a lower sequence of felsic tuffs, lavas and agglomerates. This felsic volcanic sequence, is in turn, overlain by a series of hybrid breccias and tuffs of felsic to intermediate composition. The hybrid volcanic sequence is, in turn, overlain by a second series of felsic tuffs in a restricted area in the axial zone of the syncline. The second sequence has been, by and large, eroded.
At the top of the lower sequence of the felsic tuffs, there is a horizon of dark-coloured tuffaceous shales. This horizon is frequently silicified and at times chloritized. These alterations contain disseminated sulphides which in places contain lenses of semi-massive or banded mineralisation.
In the footwall of this mineralised zone, the felsic volcanic can be brecciated and are frequently sericitised with cross-cutting quartz and pyritic veinlets. The overlying hybrid tuffs do not exhibit ateration, and may have been deposited following the alteration and mineralising event.
A feasibility study made on the El Paredon deposit prepared by the Instituto Geologica y Minera de Espana ("IGME") (Diciembre 1981), entitled Estudio de Viabilidad Tecnico-Economica del Yacimiento de Sulfuros "La Nava - El Paredon" (Cordoba), 2 Tomos, Centro de Documentacion Report No. 10781, included an estimation of a "mineable mineral resource" and preliminary mineral beneficiation testwork. It concluded that the optimum design of the open-pit (to a depth of 80m) with dimensions of 330m in length and 150m width would have recoverable resources of 639,155 tonnes grading 1.08% Cu, 2.98% Pb, 6.53% Zn, 79.85g/t Ag, and 0.61g/t Au. Removal of waste would be required corresponding to an ore/waste ratio of 1 tonne/4.33m3. Details of how the resource estimate was calculated are not available.
This "mineable mineral resource" estimate was made in accordance with the standards in effect at the time by IGME, a government agency, but a "mineable mineral resource" estimate is not compliant with National Instrument 43-101 and is reported here for reference purposes only, and should not be relied upon.
An additional 17 core drill holes are reported to have been completed between August 1982 and January 1983, however the results of this work are not available. The resource estimate has not been updated since 1981. A NI 43-101 Technical Report is being prepared for the Company by Mr. Andrew Gourlay. P. Geo.
Additional drilling will be required to confirm the mineralization and grades encountered in the historic exploration, and to test for extensions of the mineralized zones. Results from the proposed drilling will be incorporated into an updated and compliant resource estimate, when all the results have been received and compiled.
A qualified person has not done sufficient work to classify the historical "mineable mineral resource" as current mineral resources or mineral reserves. The Company is not treating the historical "mineable mineral resource" as current mineral resources or mineral reserves.
Previous exploration and technical studies were focused on the known deposits at El Paredon with very limited regional exploration and there is the potential for the resource to be substantially increased within the area covered by the Permits. "Minera" will remain the operator of the property and will manage and control exploration work in line with that recommended in the NI 43-101 report.
The Company continues to hold a right of first refusal on the purchase from S.W.J. of the Jan Kanty Coal Mine in Upper Silesia. (see the Company news release of Sept. 06, 2011 for further details) negotiations are continuing with a nearby nearly depleted coal mine with regards to accessing the Jan Kanty 510 seam from their existing 510 seam roadways. If successful this would reduce capital costs, be more in accordance with the local communities concerns over environmental issues and allow for more coal to be made available for extraction from Jan Kanty.
A wholly owned subsidiary, Columbus Energy Poland Spz.o.o., has been incorporated to apply for other projects of merit which have been identified in Poland.
CEL currently has 65,206,291 shares issued and outstanding. The Company will be seeking a financing concurrent with the issue.
The closing of the transaction detailed herein remains subject to the acceptance of the TSX Venture Exchange.
Mr. Andrew Gourlay, P. Geo., is the Qualified Person who reviewed and approved the scientific and technical information contained in this news release.
This news release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization, exploration results and future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include market prices, exploitation and exploration results, availability of capital and financing, general economic, market or business conditions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment, timeliness of government approvals, unanticipated environmental impacts on operations and other exploration risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.