CHICAGO, Sept. 7, 2005 (PRIMEZONE) -- American Stellar Energy (Pink Sheets:AMRS) is pleased to report it has entered into a joint venture agreement with Paramount Gold Mining Corp. (OTC:PGDP) that allows Paramount Gold Mining Corp. to acquire up to a 70 percent interest in the San Miguel Groupings, located in Chihuahua, Mexico, from Amermin S.A. de C.V., American Stellar Energy's 97 percent-owned subsidiary.
The San Miguel Groupings include several concessions and past producing mines, including the high-grade former producing San Luis mine. The agreement also includes access to processing capacity at the 150 t/d La Currita Mill located about three kilometers away.
The agreement calls for a payment of US $400,000 to acquire a 35 percent interest in the San Miguel Groupings. Paramount can increase its interest to 55 percent by spending US $1 million on exploration within the first 18 months; and to 70 percent by spending an additional US $1.5 million within the first 30 months from the date of the agreement.
The immediate area has numerous mines and recent substantial discoveries. About 20 miles to the southeast is the 170,000 ounce/year El Sauzal mine, Glamis Gold's (NYSE:GLG) newest and largest gold mine. Gammon Lake Resource's (AMEX:GRS) Ocampo Gold-Silver Project is approximately 40 miles to the north projecting annual production of 270,000 ounces gold-equivalent ounces. Palmarejo (TSXV:PJO) is developing the nearby Palmarejo mine and has acquired ground surrounding San Miguel. Palmarejo has announced an inferred resource of 3.1 million ounce gold equivalent on their property.
The San Miguel Groupings concessions are known as Santa Clara, Las Tres S.S.S., San Luis, El Carmen, Swanick, Sangre De Cristo, Las Tres B.B.B., Guadalupe De Los Reyes, San Juan, El Rosario, San Miguel (Head of group) and Empalme. The property lies in the Temoris mining district, part of the prolific gold-silver belt of the Sierra Madre Occidental, just a few kilometers northwest of the town of Temoris. It can be accessed by vehicle and railway and has well-developed infrastructure with a recently constructed 33,000 volt power line. The project covers approximately 800 acres with an estimated six kilometers of strike in the historic gold/silver mining district.
The San Miguel Groupings covers portions of three mineralized, subparallel fault zones respectively known as Guazapares, Sangre de Cristo and Batocegachic. All three structures have been historically mined for gold and silver on those portions covered by the San Miguel Groupings by both underground and open pit methods.
The six-kilometer long Guazapares zone generally strikes north-by-25-degrees-west and dips steeply to the northeast. The southern half of the Guazapares structure is characterized by more silver-rich mineralization and the northern half is more gold-enriched. The fractured hanging wall of the main structure and fault intersections contain zones of stockwork veining that provides potential for defining bulk-tonnage deposits such as the silver deposit at the San Jose mine that was the site of a small heap-leaching operation in the mid-1980s.
The San Luis mine is the site of a bonanza-grade, gold-rich breccia body that was mined to the inclined depth of 815 feet by the Alaska-Juneau Mining Company from 1958 to1963. Company reports from the period indicate that the gold mineralization continues at depth and that high-grade blocks of ore likely remain intact. The mine was flooded by groundwater in 1963 and has not been worked since.
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.