Cangold is advancing the Ixhuatan gold project in Mexico toward prefeasibility. The project has an existing resource of 1.7 million ounces of gold. Cangold has the same management team as Great Panther Silver and aims to develop Ixhuatan, taking advantage of the management's experience operating in Mexico. Metallurgical testing is underway as part of an internal scoping study, with the goal of an environmentally-friendly processing method without cyanide. Cangold also holds early-stage gold projects elsewhere in Mexico.

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Mexican Focus
Cangold Pushes Ixhuatan Gold Project toward Prefeasibility
~ By Greg Klein- March 28 2012
Now this is a testament to the lure of gold—and of Mexico. Two producing silver getting any value for it in their share price. So they decided to do the deal with a
mines, a silver development project and a silver exploration project, all south group that was already well established in Mexico, knew how to operate there
of the Rio Grande, didn’t quite satisfy the management of Great Panther Silver and was ready to move the project forward.”
TSX:GPR. Hence the existence of Cangold TSXV:CLD, a company whose man-
agement and board are almost identical to Great Panther’s. Having picked up Metallurgical testing is already underway, part of an internal scoping study
a 75% option on the Ixhuatan Project in the same country, Cangold has a gold that will likely lead to an independent prefeasibility for an open pit mine by late
project moving toward prefeasibility. summer or early fall. The metallurgy gets a bit fussy because southern Mexico’s
rainfall rules out heap-leach processing. “We’d like to use a contained process
that would avoid any requirement for cyanide or anything like that. That would
lead to a more environmentally friendly operation,” Archer says.
The beauty of this is that it’s an advanced-stage project with a compliant re-
source of 1.7 million gold ounces. And because it’s the same management team
as Great Panther, we can move it into production —Bob Archer
As for infrastructure, “It’s great,” Archer says. “There’s a relatively short gravel
road that leads right onto the property and paved roads leading to a number of
nearby towns.”
While the scoping study takes place, the company works on community rela-
tions. “Again, one of the beauties of this project is that we don’t have to go in with
a big drill program. We have the luxury of time, which allows us to engage the
“The beauty of this is that it’s an advanced-stage project with a compliant local communities and find out what their concerns might be. There are far too
resource of 1.7 million gold ounces,” says President/CEO Bob Archer. “And many projects that have been stopped in their tracks because companies didn’t
because it’s the same management team as Great Panther, we can move it into communicate properly.”
production, if that’s the case.”
Cangold Pushes Ixhuatan Gold Project toward Prefeasibility At the opposite end of the country, in Sonora State, Cangold has the early-stage
Plomo Project. “It’s very close to a major regional structure that comes through
Cangold’s Ixhuatan Project came with a 1.7-million-ounce gold resource northwestern Mexico,” Archer reports. “Most of the deposits in that region are re-
lated to the structure, both spatially and geologically. It’s only about 25 kilometres
Located in the southern state of Chiapas, the 4,176-hectare property had from La Herradura [44% owned by Newmont TSX:NMC], one of Mexico’s largest
already seen 89,000 metres of drilling in 342 holes. “That’s a huge amount, and gold mines. We’ve defined an area that’s about five kilometres long and three
the deposit itself is fairly well defined,” says Archer. “So there’s really no need to kilometres wide with a number of gold-bearing zones. We’ll be going back to start
update the resource. We’ve made it current from a regulatory standpoint, and mapping and sampling and ultimately resume drilling later this year.”
any additional drilling will come at the prefeasibility stage, mostly a few fill-in
holes, if there are any gaps in the model, or a couple of additional holes for a Cangold is earning 100% of Plomo subject to a 2% NSR with a private owner.
more detailed metallurgical study.” Cangold also owns the Argosy Project, a past-producing gold mine in Ontario’s
Red Lake District. But that one’s up for grabs, according to Archer. He wants to
Included in the project’s May 2011 43-101 technical report is a 2006 resource stay focused on Mexico.
estimate for the Campamento Deposit, one of nine mineralized zones. The
measured category shows 1.95 million tonnes grading 3.49 grams per tonne “I love working there,” he says. “I had worked there back in the late 1990s, when I
gold and 15.84 g/t silver for 219,000 gold ounces and 990,000 silver ounces. started Great Panther with a friend who’s a Mexican mining engineer. We wanted
The indicated category shows 15.62 million tonnes grading 1.64 g/t gold and to build a Mexican mining company. The governments at all levels are very
6.79 g/t silver for 823,000 gold ounces and 3.41 million silver ounces. Inferred supportive of mining in general, and there’s a good mining act. The geology is
resources come to 21.75 million tonnes grading 1.01 g/t gold and 3.23 g/t silver fantastic, and there are still lots of discoveries to be made.”
for 703,000 gold ounces and 2.26 million silver ounces. These numbers use a
0.5 g/t gold cutoff. At press time Cangold, had 33.9 million shares trading at $0.20 for a market
cap of $6.8 million. “Yet we’re earning 75% of a 1.7-million-ounce gold deposit,”
“
Under last September’s option agreement—labelled a reverse takeover by the Archer concludes. “The share price doesn’t reflect the potential of the project
TSXV—Cangold may acquire 75% of Linear Gold, the project’s owner and a whatsoever. I think there’s a huge upside there.”
subsidiary of Brigus Gold Corp TSX:BRD, by paying Brigus a total of $10 million
and 20 million Cangold shares over two years and completing feasibility within
three years. Following production, Brigus would get $5 per gold ounce in the The beauty of this is that it’s an advanced-stage project
proven and probable reserves shown in the feasibility study as well as a 2% net with a compliant resource of 1.7 million gold ounces. And
smelter royalty. because it’s the same management team as Great
Panther, we can move it into production
“Brigus did the deal with us because of our management team,” Archer declares.
“They were focused on their Black Fox Gold Mine near Timmins, so Ixhuatan
was a bit of an orphan for them. They had no team in Mexico, and they weren’t
– Bob Archer
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