The turnaround in the fortunes of Cream Minerals demonstrates that what is undesired isn't always necessarily undesirable. In the fall of 2010 the company was in possession of a promising silver-gold asset in Mexico's Nayarit State, but it was...

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New Milenio, New Hope
Cream is Born Again in Mexico
~ By Ted Niles - August 30, 2011
The turnaround in the fortunes of Cream Minerals demonstrates that what and the 43-101 for Dos Hornos 2 and average them out, you’re going to be
is undesired isn’t always necessarily undesirable. In the fall of 2010 the pretty close to what we reported in the 43-101.”
company was in possession of a promising silver-gold asset in Mexico’s
Nayarit State, but it was—in President and CEO Michael O’Connor’s The current resource is contained within only 600 hectares of the property.
words— “chronically underfunded, with about $1.8 million in debt,” making O’Connor points out that Nuevo Milenio offers a number of other as yet
any progress there nearly impossible. So when Endeavour Silver launched untested targets over its five kilometres of mineralized strike length. “If we
a hostile takeover bid in October 2010, it is doubtful that anyone at Cream go a little bit further to the west, further down the caldera floor, there are two
was thinking of the potential upside. But not only did enough of the mori- zones,” he reports. And both present “blue sky” exploration targets.
bund company’s shareholders feel they were being low-balled that the bid
was withdrawn two months later, Cream’s survival resulted in a $6 million As to the timeline for an updated resource at Nuevo Milenio, O’Connor
bought-deal private placement. Suddenly its debts were paid, and it had a presents two scenarios: “If we’re going to do a 43-101 on just the inferred,
tidy sum of cash. we’re probably looking at the end of October 2011. If we decide to do a 43-
101 on everything—pull in the inferred and pull in the exploration data and
just have a new project-life 43-101—I think that would push us towards the
end of December 2011, early January 2012.” He relates, “A couple of geolo-
gists from ACA Howe are doing a property visit. They’re going to look at the
infill work and the exploration work done to date. I’ll chat with them and we’ll
make a decision as to whether or not we do two [resources] or one big one.
We’re probably thinking about doing one big one.”
In the event that Cream does the “big one,” O’Connor expects that the next
step would be a preliminary economic analysis. “At the same time we’ll map
out another 20,000 metres of drilling,” he adds. “I think it might take 50,000
metres overall to get to where we’d want to be.”
Cream is keeping its long-term options open. The company’s metallurgical
work suggests very positive recovery rates, and the project has good ac-
cess to infrastructure—water, power, rail and the Tepic airport all within 14
Cream was then able to initiate in February 2011 a 20,000-metre drill kilometres—promising low-capital costs. O’Connor enthuses, “The capital
program on its flagship Nuevo Milenio project. Located 27 kilometres from costs could be under $200 million. But when you get up into the 150-million-
Tepic, the capital of Nayarit, it consists of 2,560 hectares and has a 2008 NI ounce and higher range, with reasonably good grades and good metallurgy,
43-101 inferred resource estimate of 41 million ounces silver at an average these kinds of projects become attractive to larger producers. There is the
grade of 251.1 grams per tonne and 271,482 ounces gold at an average possibility that we could put it in play, create an auction, and see what we
grade of 1.7 g/t. can get, or somebody may just show up and make an offer.”
“The objective of the current drill program,” explains O’Connor, “is to O’Connor concludes, “When we were flat broke and carrying $1.8 million
produce enough data to do another 43-101 and upgrade as much of the in debt, we looked at auctioning off the property for $5 million cash up front
inferred to indicated as we can.” and an additional exploration commitment. We had several companies look-
ing at the project—Minco Silver, for instance. At the same time, Endeavour
O’Connor continues, “When we move from the side and down to the floor Silver launched its hostile takeover bid. Logically, what all that tells me is
of the caldera, there are four mineralized zones that we know of [i.e. Dos that Nuevo Milenio is a high-potential project.”
Hornos 1, Dos Hornos 2, Veta Tomas and Once Bocas]. Of those four, three
“
are good exploration targets. The fourth one comprises part of the inferred Cream Minerals has 152.2 million shares currently trading at $0.155 for a
mineral resource, so we’re drilling that infill at 25-metre spacing.” Explora- market cap of $23.6 million.
tion drilling will consist of a minimum of 6,000 metres at 50-metre spacing,
which O’Connor anticipates will be sufficient for a new inferred resource.
When you get up into the 150-million-
Infill drilling at Dos Hornos 2, reported August 18, includes assays of ounce and higher range, with reasonably
103.17 g/t silver and 0.97 gold over 17.5 metres, 115.18 g/t silver and 0.73
g/t gold over 8 metres, 73.24 g/t silver and 0.68 g/t gold over 10 metres good grades and good metallurgy, these
and 42.67 g/t silver and 0.21 g/t gold over 13 metres. Step-out drilling at kinds of projects become attractive to
Dos Hornos 1 returned June 21 assays of 151.4 g/t silver and 0.39 g/t gold
over 4.6 metres, 105.32 g/t silver and 0.65 g/t gold over 5 metres and 140 larger producers
g/t silver and 0.83 g/t gold over 5.2 metres. Of the former results, O’Connor – Michael O’Connor
comments, “We’re happy with them. If people were to look at these assays
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