Vancouver, Nov. 19, 2010 - Canasil Resources Inc. (Canasil, TSX-V: CLZ) announces that the Company and Pan American Silver Corp. (Pan American, the Optionee, TSX: PAA) have signed a letter agreement covering an earn-in option on Canasil’s Carina project in Durango State, Mexico. The letter agreement is binding until replaced by a definitive agreement. It is understood that Pan American is required and wishes to offer the assignment of the agreement to the La Preciosa joint venture with Orko Silver Corp. (Orko, TSX OK), which is advancing the adjacent La Preciosa Silver project.
Canasil President Bahman Yamini commented “This is another positive development and opportunity for Canasil to advance its silver/gold exploration projects in Mexico in cooperation with leading industry partners. Pan American and its La Preciosa joint venture partner, Orko Silver, are ideal partners for advancing Canasil’s large Carina property. They are actively working on advancing the neighbouring La Preciosa silver project and have considerable technical and operating experience and capabilities in the area. We are very pleased with this opportunity to advance the Carina property and look forward to the start of the first year exploration program.”
The option terms provide for the Optionee to earn an initial 55% interest in Canasil’s Carina property for total exploration expenditures of US$3,650,000 and total cash payments of US$365,000 to Canasil over a period of four years. Following the initial earn-in, a 55%-45% joint venture (JV) will be established with the Optionee as Operator. The Optionee may increase its interest in the JV to 70% by funding a full feasibility study within three years, and to 80% by financing the project through to production. In the latter case, the optionee would be entitled to recover the Canasil portion of the capital costs financed by the Optionee from 85% of Canasil’s portion of the project cash flow.
The Carina property covers 12,147 hectares and is located 45 km northeast of the city of Durango. The claims are adjacent to the southern border of the Pan American-Orko Silver joint venture’s La Preciosa silver project. Canasil’s mapping and sampling has defined an area of 500 metres by 800 metres hosting multiple quartz vein structures with anomalous silver, gold and base metal values in surface samples. The large claim area requires further evaluation to explore for and identify other potential mineralized zones.
Canasil is a Canadian mineral exploration company with interests in precious and base metal projects in Durango, Sinaloa and Zacatecas States, Mexico, and in British Columbia, Canada. Canasil’s directors and management include industry professionals with a track record of identifying and advancing successful mineral exploration projects. Canasil is actively engaged in the exploration of its mineral properties.
For further information please contact:
President and C.E.O.
Canasil Resources Inc.
Tel: (604) 709-0109
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release