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Joint Venture ( Xinyun Mining Co.)
The Midu Joint Venture consists of three exploration permits, covering a total of 189km2, 190 km south of Dali City, Yunnan Province. Maxy has the right to earn 75% interest of project, Chinese partner (Yunnan Mining Geology Group) participating in exploration expenditures (25%). Two main targests (Muluozuo target and Qingmuling target), a third developing.
Three main stream sediments gold anomalies out of eight were investigated to date. Quingmuling, Longtan, and Niujie zones have been identified.
The Midu Gold Project, located approximately 200 kilometers (km) west of Kunming (the capital city of Yunnan Province) is comprised of three exploration permit areas (the Niujie, Qingmuling and Baicaoshan) which cover 189.07 square km). The Project area is accessible by road with service facilities and power nearby and is geologically located within the prolific north-west trending poly-metallic metallogenic belt just north of the giant Red River Structure Zone which hosts numerous copper-gold porphyries, gold, copper-nickel, lead-zinc and platinum group metal deposits and prospects.
The Agreement
Under the terms of the Cooperative Joint Venture Agreement a Sino-Foreign Joint Venture Cooperative Company will be formed with YGM by investing US$750,000 over two years to earn a 75% interest in the Cooperative Company, plus payments to YGM
Due Diligence Report on the Midu Gold Project
Mr. Barry J. Price, P.Geo, has visited the project, done due diligence sampling and completed a NI 43-101 report on Project.
Thirteen due diligence samples of selected mineralized vein material were taken from surface trenches on the Niujie permit area and contained gold values ranging from 0.026 up to 97 and 105 grams per tone (2.83 and 3.06 oz/ton gold respectively) and correlative silver values ranging from 0.08 up to 503 g/t (14.7 oz/ton). The two best samples contained 97.1 g/t gold with 503 g/t silver, and 105 g/t gold with 351 g/t silver. Free gold has been reported from the area in the past. The thirteen samples were selected, averaged 0.5 kg, and represent pieces of quartz rich veins with copper and lead mineralization and stringers with high gold and silver values from unknown sources. Further trenching and mapping is recommended by Mr. Price to determine the source and whether economic vein mineralization may be present.
Similar showings at Qingmuling are contained in lensoid quartz zones in metamorphosed volcanics. Samples taken in old trenches contained from 0.074 to 9.65 grams per tonne gold with low silver values.
At the Baicaoshan permit an altered ultramafic body identified and sampled with anomalous gold content but less than 0.5 grams/tonne may be the source of unexplained gold and platinum anomalies identified by Maxy's joint venture partner. Mr. Price suggests that a strongly fractured and altered porphyritic intrusion nearby appears favourable for intrusion-hosted gold deposits such as are found in the Tintina gold belt, Yukon.
The Exploration Program
Mr. Price recommends a two phase exploration program involving mapping, sampling and trenching followed by a 2000 meter drill program for a total projected cost of $474,500. Maxy has commenced the first phase of the program.
Midu Technical Review
Drilling
7 DDH , total 876 meters , Muluozuo target
Understand mineralization extension and grade variance in depth and along strike, and mineralization structure
Underground
Muluozuo
3 tunnels, MLPD1, MLPD2 and MLPD3, total 820 meters
Test west-east-striking gold mineralization structure and mineralization extension to the levels of 2133.9m (PD1) and 2083.5m (PD3).
Qingmulin
2 tunnels, QMPD1 and MLPD23, total 220 meters
Test north-west-striking gold mineralization structure and mineralization extension in depth.
Trenches and wells Qingmulin and Muluozuo
9 trenches, total 3600m3,
12 wells, total 94 meters, test soil Au anomalies and to confirm the gold mineralization structure
Samples ( Muluozuo and Qingmulin )
1229 Rock Samples
Geology
Completed geological survey and 1:2000 mapping of 7.29 km2 area which covers five soil geochemical Au anomaly targets (MLZN, MLZS, MLE1,MLE2,MLE3)in adjacent Muluozuo Au target.
Completed geological survey and 1:2000 mapping of 5 km2 area to test soil geochemical Au anomalies in Qingmuling target.
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