CMX GOLD & SILVER CORP.
Calgary, AB T3H 1H5, Canada
CMX Gold & Silver Corp. is working to reactivate its 100%-owned Clayton Silver-Lead-Zinc Mine in southeastern Idaho. The Clayton Silver Property comprises approximately 684 acres covering 29 patented and 6 unpatented mining claims.
The Clayton Silver Property contains the old Clayton Silver Mine which operated steadily for 50 years until 1986, at which time the operation was shut down because of low commodity prices. The mine produced silver, lead and zinc, plus smaller amounts of copper and minor gold. Historical production records to 1986 indicate aggregate recovery of 7,031,110 Troy ounces of silver, 86,771,527 pounds of lead, 28,172,211 pounds of zinc, 1,664,177 pounds of copper, and minor amounts of gold from approximately 2,145,000 tonnes of ore.
Products / Services
Clayton Silver Property Potential
The overriding consideration from an investor’s standpoint is determining the downside risk versus the potential share value created with different degrees of success. From our review of the historical data and the fact Clayton was an operating mine that was not mined out, we believe that the downside risk is minimal as the price of CMX’s units reflects a ground floor investment entry point. The price of the units gives a current enterprise value for CMX of approximately US$2.95 million, which we think heavily discounts the potential. At current metals prices, the project will generate a robust rate of return based on confirmation of the potential resources. Another important consideration is that, in our opinion, current prices for commodities are at the bottom of a bear market. We are convinced that over the next few years the metals markets cycle will turn upwards and prices will increase, supporting the development of the project and enhancing the value of the potential resources.
Clayton Underground Potential
CMX considers the significant prize at the Clayton Silver Mine to be the potential for confirming and adding mineral resources underground. This is the Company’s primary long term goal. Our review of the historical data has led us to conclude that the potential upside is much greater than we initially thought. See our March 31, 2015 news release. Our geologist, Rick Walker’s analysis has shown the potential for proving up substantial ore reserves. Resources available from previous work include drilling for mining purposes on the North Ore Body at the 1100 foot level and deeper drilling several hundred feet below the old workings to the 1500 foot depth. There is also potential for resources to exist at shallower depths below and adjacent to the South Ore Body. All of this points to the possibility of finding resources that are many times more than what has been mined previously.
Clayton Historical Information
Historic production, mainly of silver, lead and zinc, has a gross metal value using more recent prices of about USD $195 million ($15/oz silver, $0.75/lb lead and $0.70/lb zinc). The mine operated for several decades, mainly from the 1950s to the 1980s and was economic. Our strategy would be to run a mill that had twice or three times the capacity of the old mill, greatly improving economies of scale and increasing the present value of the potential resource.
Previous operators did very little exploration or development drilling to look for other resources. If resources with recoverable metals values several times what has been recovered previously are confirmed through drilling, the present value of the Clayton Silver Property will increase the enterprise value of CMX substantially. This would create share value many times greater than the current price.
Mine Dump Potential
From a short term perspective, the preliminary sampling program on the mine dump pile suggests potential to process the material at a profit, subject to confirmation by the proposed comprehensive sampling program, and eventually obtaining a positive preliminary economic assessment. See our February 20, 2015 news release. Proceeds of the current offering will be used, in part, to carry out the follow-up comprehensive sampling program to confirm metals values and potential tonnage from the mine dump. A successful follow-up dump sampling program that confirms values similar to the preliminary results will enable CMX to proceed with initial engineering work to confirm milling costs and recovery rates. There is potential for up to one million tonnes of dump material available for processing.
Prior Sampling Results
The 2014 Dump Sampling Program statistical averages of the 16 locations were as follows:
• Au – 0.80 gms/t
• Ag – 24.31 gms/t
• Mn – 0.60%
• Pb – 0.44%
• Zn – 0.27%
Tailings had significant Manganese with the 3 locations averaging 1.28% Mn.
Grades from the initial sampling program had the following gross metals values at prices similar to those referred to above (which we expect will rise in future):
16 Sample Locations from Dump (US$ per tonne) without Manganese
with 100% recovery – $53.83, with 80% recovery – $43.06
16 Sample Locations from Dump (US$ per tonne) with Manganese
with 100% recovery – $63.61, with 80% recovery – $50.89
3 Sample Locations from Tailings (US$ per tonne) without Manganese
with 100% recovery – $29.11, with 80% recovery – $23.29
3 Sample Locations from Tailings (US$ per tonne) with Manganese
with 100% recovery – $49.97, with 80% recovery – $39.98
President Executive Officer
Mr. Alston has been involved in public junior natural resource companies for over 25 years. He practiced law in the 1980’s in the areas of business law, oil and gas, securities regulation and corporate finance. Mr. Alston has been a member of the Law Society of Alberta from 1982 to present. He led the management team as President, Chief Executive Officer, director and co-founder of Purcell Energy Ltd. (“Purcell”), an oil and gas exploration and production company listed on the TSX. After 16 years, Purcell in 2005 sold two-thirds of its oil and gas assets for more than $150 million and spun out Tenergy Ltd. From November 2005, Mr. Alston was Chief Executive Officer and director of Tenergy Ltd., a TSX listed natural gas exploration and production company, until its sale in March 2006 for approximately $92 million.
Chief Financial Officer
President of Psi3g, Inc. since January 2010, a private California-based commercial construction company. Mr. Squires has been Chief Financial Officer of Azteca Gold Corp. (now an inactive junior mining company) since December 2006 and the Controller and President of PSI Management Team, Inc. from 1990 until December 2009. During his 21 year tenure at PSI, Mr. Squires has held positions including Controller and Vice President of Business Development and Strategy. As Controller his responsibilities included budgeting, cash management, financial statement preparation and analysis, audit preparation, and bank, bonding and insurance relationship management.
Mr. Walker is a Professional Geologist registered with the Association of Professional Engineers and Geoscientists of British Columbia. With over 25 years of practical field experience working with organizations of all sizes from junior to major mining companies, both private and public in Canada, the United States and South America, Mr. Walker’s primary role has been management of exploration programs for precious metals (with an emphasis on silver) and base metals. His background includes experience with a variety of deposit types including porphyries, sedimentary exhalative, volcanogenic massive sulphides , polymetallic veins, industrial minerals, gold, silver, base metals, rare to strategic metals and diamonds. Mr. Walker provides consulting services through his firm, Dynamic Exploration Ltd., of which he has been President since 1996. He was the President of the East Kootenay Chamber of Mines (1994-2006) and a Director of the B.C. and Yukon Chamber of Mines (1999-2004).
General Counsel/Legal Officer
James P. O’Sullivan
Mr. O’Sullivan is a senior associate lawyer in the Calgary office of Norton Rose Fulbright (Canada) LLP. His current practice focuses on providing corporate and commercial advice to junior issuers, including start-up and growth companies active in the energy, mining, healthcare and technology markets. Mr. O’Sullivan’s expertise includes corporate governance, regulatory compliance and continuous disclosure matters. He has extensive experience in financings, mergers and acquisitions and other corporate reorganizations. He also serves as corporate secretary for several Canadian public companies. Mr. O’Sullivan has been a member of the Law Society of Alberta since 2007.
John A. Niedermaier
CEO of Mi Casa Rentals Inc., an oilfield supply company. Mr. Niedermaier is a professional engineer and member of APEGGA. Mr. Niedermaier has 49 years of experience in the oil and gas drilling and service industry during which time he founded and was President of Badger Drilling Ltd., Derrick Drilling Ltd. and Petro Well Services Ltd. In the early 1980s he was one of the founders of the Canadian Association of Drilling Engineers (CADE). Mr. Niedermaier also served on the board of the Canadian Association of Oilwell Drilling Contractors and was President in 1986. He co-founded Storm Well Servicing Inc. in 2002, which was sold in 2007. He is presently founder and President of Mi Casa Rentals Inc., an oilfield supply company. Mr. Niedermaier was a director of Purcell Energy Ltd. from 1989 until 2005 and has been on numerous public and private company boards. He is currently a director of Marksmen Energy Inc., a TSXV listed oil and gas company, and three private oil and gas companies.
J. David Clements
Mr. Clements is a petroleum geologist with over 40 years of experience in the oil industry. His early experience included Exploration and Operations with Husky Oil, Algas Minerals (Novalta), Geocrude and, in the early 1980’s, he was the Vice-President of Exploration and Land for Canadian Jorex Limited until its sale in 1996. This experience with small oil companies provided direct involvement in all facets of exploration and development. Since then, he co-founded, and or was a major shareholder of, several entities, including Storm Service Rigs Inc., Auburn Exploration Ltd., Auburn Energy Ltd., Spirit Energy Ltd., and Spirit Energy Inc. These companies were all funded through private investment and with the exception of Spirit Energy Inc., were subsequently sold to public entities. Storm Service Rigs Inc. was sold to Technicoil Corporation in 2007.
CEO and Director of Passport Energy Ltd. from October 2010 until it merged into Powder Mountain Energy Ltd. in June 2014. President, CEO and director of Powder Mountain from June 2014 until July 2015 when it merged with Canamax Energy Ltd. Mr. Murray has over 30 years of extensive experience in the oil and gas industry in the areas of exploration and production negotiations, acquisitions, gas marketing, general oil and gas operations and management. From 1980 to 1987, Mr. Murray was employed by BP Resources Canada as District Landman, Negotiations, for the Canadian frontier and western Canadian Basin producing properties. Mr. Murray was a co-founder, director and COO of Purcell and was responsible for managing the exploration and production operations of the company. From November 2005 Mr. Murray was President and director of Tenergy Ltd. until its sale in March 2006 for $92 million. He is President of Zorzal Incorporated, a Canadian-owned winery in Mendoza, Argentina.
Mr. Corrigan has a career spanning several decades with extensive experience in management and organization of heavy industry development, steel fabrication and erection, machine fabrication, industrial and municipal waste stream processing, power generation facilities, and mining property development and operation. Since 1976, Mr. Corrigan has been providing professional services as a business development consultant and/or owner-partner in heavy industry development projects, which have included development, management and finance of a U.S. $60+ million, 22 MW hydroelectric production and transmission facility in Belize, Central America, and as owners’ representative supervising construction of a 2.5 MW hydroelectric production facility in NW Colorado.
Mr. Alston has a B. Comm. He has over 25 years of experience in executive and management roles with public junior mining exploration companies. Mr. Alston has been a senior officer and director of several junior companies, as well as being involved in many different aspects of the business, including stock exchange listings, corporate finance activities, corporate development, project management, and accounting and audit functions. He has extensive experience in facilitating exploration projects for precious metals, diamonds and base metals.