Canuc Resources

Generating Cashflow from Oil and Gas Operations for High-Grade Silver and Gold Exploration

Overview

Canuc Resources Corporation (TSXV:CDA) is a junior resource company engaged in developing value from its 100 percent owned and titled high quality, high grade San Javier silver and gold project located in Sonora State, Mexico. After six years of claim acquisition and project preparation in a private company, the San Javier silver and gold asset was brought to public markets for the first time through Canuc Resources.

To minimize dilution, preserve shareholder value and to maintain the highest possible shareholder integrity with the tightest possible capital structure, Canuc Resources funds its corporate expenses with cash flow derived from producing natural gas wells which are located in Central West Texas.

CEO and Director Chris Berlet said, “Having cash flow permits Canuc Resources to avoid unnecessary dilution and to maintain the tightest possible capital structure while unlocking the maximum shareholder value possible from the high quality San Javier silver and gold asset.”

Located in a mining friendly jurisdiction 139 kilometers east of Sonora State capital Hermosillo, the San Javier silver and gold project represents the company’s central value proposition. Intermittent mining on the central claim site between the 1950s and 1990s produced high grade silver with significant gold credits from a maximum depth of 150 meters.

Canuc Resources has accumulated 16 claims comprising more than 400 hectares of contiguous ground along strike and down dip of the main workings at San Javier. A comprehensive agreement permits for both exploration and eventual exploitation (mining) on an area covering in excess of 1,000 hectares. The Company expects to define a high quality resource in the millions of tonnes by conducting modern exploration on the San Javier project, including drilling well below and beyond the known historical resource area.

“It was evident early on that there were high grades of silver with a meaningful gold credit,” said Berlet. “In all cases, the assays were very high for silver grades. We had some bonanza grade results, and the grade averaged about 11 ounces of silver per tonne. The resource also has a significant gold credit — with assays averaging two grams per tonne consistently throughout several sections of the veins.”

The company has embarked on a multiple phase sampling and drilling program. Early exploration and underground mine workings have confirmed the presence of at least three veins, including two sub-parallel veins (Lydia and La Noria) in the footwall rocks beneath the primary Santa Rosa vein. Mineralization has been identified between the veins on surface and there exist at least two breccia zones within the mineralized corridor with high grade silver assays reported over widths of at least 11 meters.

Mineralization at San Javier occurs as discrete veins, stockworks and breccia zones. The existence of breccia zones in a sedimentary host rock environment suggests potential for a bulk tonnage deposit, which would greatly improve project economics.

Canuc Resources also intends to expand its hydrocarbon production in Stephens County, Texas. The Company expects to participate in development of at least four new wells on its proven producing property with a view to enhancing cash flow, avoiding unnecessary shareholder dilution and optimizing value for Company shareholders.

Company Highlights

  • San Javier Silver/Gold Project hosts a past producing silver mine with historic production of 50,000 tonnes of material averaging 262 g/t (9.24 oz. per ton) silver and 1.25 g/t (.044 oz. per ton) gold.
  • 5-kilometer strike length patiently accumulated over 6 years with very high grade silver (11 oz. per ton) and significant gold credits (2+ grams per tonne) evidenced throughout.
  • At least three primary veins with potential bulk tonnage along the full 3.5-kilometer length of mineralized corridor.
  • Two high grade breccia zones identified, providing bulk tonnage possibilities.
  • Ownership of six natural gas wells in Central West Texas, providing the company with a cash flow to cover corporate expenses and minimize shareholder dilution.
  • Tight capital structure for high value silver/gold project; cash flow to minimize share dilution.