First Gold Signs Letter of Intent for a 50% Interest in a Past Producing High Grade Silver/Lead/Zinc/Copper Project Located in the Heart of Mexico's Sierra Madre del Sur

Monday, November 09, 2009 10:51 AM

(Source: MARKETWIRE) tracking

First Gold Exploration Inc. (TSX VENTURE: EFG) (FRANKFURT: F12) is pleased to announce that it has signed a letter of intent (LOI) to earn a 50% interest in the San Javier silver property located in the Municipality of Malinalpetec, State of Guerrero, Mexico.

The 253 hectares property hosts a silver-gold-lead-zinc epithermal mineralization typical the Mexican precious metal belt. It is located within the Sierra Madre del Sur, therefore in the southern portion of the precious metal belt. This portion of the belt is characterized by a high Silver/Gold ratio.

Approximately 30 quartz-sulphide veins have been discovered in the district so far. They are hosted in a weathered granodiorite. According to the vendors, the veins run for 400-500 metres and their average thickness is in the order of 1.5 metres. Historical and recent sampling indicates that the veins carry grades above 500 g/t Ag, 1-2% Pb and 1-2% Zn. These epithermal veins hosts a variety of sulphide minerals such as argentite, pyrite, galena, sphalerite, arsenopyrite and chalcopyrite. The following table was provided by the vendors. It gives examples of results from high grade vein material found on the property. Sampling procedures are not known.

      Ag           Pb     Zn
  g/t     oz/t      %      %
----------------------------
  440     12.8   1.49   0.44
  731     21.3   1.44   0.44
  297      8.7   1.41   0.10
  162      4.7   1.86   0.31
  816     23.8   3.60   0.57
  563     16.4   5.66   4.55
  238      6.9   4.21   6.88
  418     12.2   1.32   0.72
  506     14.8   2.15   1.53
  419     12.2   3.70   0.07
 2290     66.8   4.81   2.83
 1270     37.0   3.71   2.28
 1760     51.3   2.93   1.88
12247    357.3   6.83   1.76
 1930     56.3   7.15   3.67
  481     14.0   8.86   3.30
----------------------------

Small underground workings are observed on the property and limited mining was apparently recently carried out (A shaft 85 m deep, small pits and other shafts have been constructed and seven of the thirty veins have apparently produced high grade material in the past). A small processing plant was built on site. Capacity and state of the equipment is not known at present time. It will be investigated during the due diligence process.

Camsim Minas S.A DE C.V., a privately-held Mexican Corporation, currently is the holder of an option to earn-in 100% of the title, subject to a 10% Net Profit Interest (the 10% NPI can be reduced to 3.5% at any time in the future, by making a one-time payment in the amount of USD $8M), in the "La Mina San Francisco Javier" property, which is comprised of approximately 253 hectares, situated in Tiapa District, Malinaltepec in the state of Guerrero, Mexico.

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