Technical Report - Quarter Ended 31st December, 2006
1.0 SUMMARY & COMMENTS Macmin Silver Ltd (Macmin) is a silver focused company whose primary projects are the Texas Silver Project, S.E. Queensland, Australia where the Twin Hills Silver Mine is nearing production and the Tally Ho Project near Mackay, Central Queensland. Macmin has exposure to gold by way of an 18% equity in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd.
2.0
TEXAS SILVER MINES PTY LTD 2.1 Twin Hills (ML 50161)
3.0 EXPLORATION 3.1 Tally Ho Silver Project During the quarter, the company made presentations at the ‘Stockday Conference' in Frankfurt (October 26-28) and in Munich at the International Precious Metals Show (November 23-24). These presentations in Germany provided the opportunity for the many European shareholders to discuss, with management representatives, the progress of Macmin's activities. The company also made a presentation at the inaugural Silver Summit (UK) on November 9 in London with the purpose of promoting our activities to UK investors. An Entitlements Issue to shareholders raised $8.62 million before costs in December. The Company wishes to thank all those shareholders who supported the Company in this Issue. Funds raised will be used for an aggressive exploration programme in 2007 on the Company's tenements. Macmin maintains equity investments in the following public companies with exposure to the precious and base metals sectors. Information and releases about these companies' activities can be found on each company's website.
New Guinea Gold Corporation (17% Macmin) continued with exploration and mine development during the quarter and issued a number of announcements on encouraging exploration results, which can be viewed at www.newguineagold.ca. Two press releases, one on the Sinivit development schedule, and the other on the proposed reorganization plan for New Guinea Gold Property Assets are included in this report at Appendix B. D.M. O'Neill MANAGING DIRECTOR This report is based on & accurately reflectsinformation compiled by a competent personas defined in Appendix 5A of the ASX Listing Rules APPENDIX A 23rd January 2007 Summary The significance of the results from this drilling programme, in comparison to the initial successful drilling carried out by Macmin in August 2006, is that higher zinc values were encountered in several holes. Encouraging mineralised intercepts occurred in most holes, but particularly holes GRRC29, 30 and 32, which have demonstrated narrower high grade silver-zinc polymetallic zones which represent an additional target to the broader mineralised zones previously encountered in the breccia body. Drilling The drilling programme undertaken at the Tally Ho Silver Project near Mackay in Central Queensland was carried out in November, 2006. The assay results from the RC drilling of the programme were received in January 2007. A total of 13 reverse circulation drill holes (1,842m) were drilled; 7 holes on the Tally Ho breccia and 6 holes on the Lily prospect (located about 500m north-east of the Tally Ho breccia). Significant zones of silver-zinc mineralisation were encountered in the Tally Ho breccia (Table 1 - Drill results and Table 2 - Co-ordinates); but only anomalous values were encountered around the Lily Prospect. In drill hole GRRC29, a 2m interval (76-78m) encountered 507g/t silver, 1.07g/t gold, 23.3% zinc and 0.72% copper. This high grade massive sulphide intercept represents a new target type hosted within or adjacent to the breccia body. Significant zinc was also encountered in GRRC30 where an 8m intercept (50-58m) encountered 70g/t silver, 0.16g/t gold, 9.56% zinc and 0.28% copper, within the breccia. A drill section (Figures 1 & 2 Section A-A) at Tally Ho shows the continuity of mineralised breccia, detected thus far, along a 200m length. Although silver mineralised throughout the drilled section, it can be seen that the silver dominant polymetallic mineralisation in the south-west passes to a zinc rich polymetallic mineralisation towards the north-east, which is very encouraging for the economic potential of the project as the zinc component would represent a very significant by-product credit, should development of a silver mine be undertaken. Macmin carried out a ground magnetic survey (Figure 3) in October 2006, which revealed the presence of an annular magnetic high response. The one diamond drill hole that has intersected this magnetic feature has encountered disseminated magnetite and magnetite veinlets which may represent hydrothermal alteration from a shallow high level intrusive. A multi-purpose drill rig has been contracted to start a major drilling programme at Tally Ho in April. In the meantime, a soil geochemical survey will be carried out to obtain data on the extent of the outcropping mineralised breccia/intrusive complex, with the aim of providing additional drill targets. *************************** An update on the commissioning of the Twin Hills Silver Mine will be provided in the Quarterly ASX report to be released prior to the end of January, 2007.D.M. O'Neill MANAGING DIRECTOR The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Denis O'Neill, who is a Member of The Australasian Institute of Mining and Metallurgy. Denis O'Neill is a full-time employee of the company. Denis O'Neill has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Denis O'Neill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Table 1.
Table 2. Co-ordinates (Datum GDA94)
  
1 December 2006 We have today received a ‘Notice of extension of time for decision', which moves the decision date to 2 March 2007. In that notice the EPA advise that "additional time is necessary to allow for the preparation and review of the draft Environmental Authority". Along with the Notice, the EPA have supplied a preliminary draft Environmental Authority and advise that they are working on further non-standard conditions to be included in the final draft Environmental Authority. The EPA also advise "it is anticipated this entire period (to 2 March 2007) will not be required to finalise the Environmental Authority". The Company is actively working with the EPA and our environmental consultants to finalise requirements and ensure that the delay (if any) in silver production will be minimal. In the meantime, we are confident that staff and equipment at the site can be productively employed in ongoing site works and commissioning activities. G.M. Edwards COMPANY SECRETARY 28th November 2006 I am pleased to be able to report to you that we are on track to produce silver in the first quarter 2007. 2006 has been a successful year in terms of the share price with the price rising from 15 cents in November last year to a high of 44 cents in July when silver peaked at just under $US15/oz and is now sitting around 30 cents with silver over US$13/oz. When silver exceeds its high of US$15/oz I believe we can expect the share price to test its previous high of 44 cents. In terms of mine development, 2006 has been difficult and we have to note with regret that production has been delayed until early 2007. The delays in proceeding to production were many and largely caused by three factors - initially the weather, then difficulty in obtaining some equipment due to the high level of activity in the industry and finally due to more rigorous requirements and studies by the Environmental Protection Agency (EPA) than we had expected. As of today the construction is nearing completion with only construction of the storm water dam wall and waste rock dump drainage system to be finished to EPA requirements. Plant commissioning of the crushing, agglomerating and heap stacking system have commenced. The electrowinning circuit is ready for wet commissioning. We believe that we have now complied with all requirements of the EPA and expect final EPA approval by the end of 2006. This will allow us to almost immediately commence processing of silver ore with silver production thereafter. Over the succeeding few months we expect that silver production will gradually be increased to the initial expected annualised rate of 2.5M ozs/year. If silver exceeds US$15/oz next year we will look at increasing production further. There are some unresolved points - notably whether we choose to sell our silver product directly or whether we decide to have it refined to silver bullion or a combination of both. We have formed a sales committee to follow this through but it probably cannot be resolved until we produce sufficient powder to allow end users to determine if it suits their needs. Exploration has been fairly low key throughout 2006, but we had a very significant discovery at Tally Ho in central/east Queensland. As a result of this discovery and our desire to fully optimise exploration opportunities in the Texas area we recently decided that we should very substantially increase exploration in the near term - thus the reason for the current Rights Issue. We also have zinc potential we would like to pursue at the Silver Spur prospect at Texas. We take the view that the silver price is likely to be higher in 2007. We want to have a much greater exploration program in progress when this happens to take advantage of the likely enthusiasm for silver at that time. We considered we should not wait until mid 2007 to be able to substantially increase our exploration budget. With the funds raised by the Rights Issue we will also be able to look at other opportunities to expand your company. In terms of investments, New Guinea Gold, Malachite and Frontier are all generating positive exploration results with New Guinea Gold looking especially attractive. The final point I would like to make is the very substantial backing the company gets from European investors. Over 40% of our shares are held by shareholders who reside in Germany and Switzerland. Before closing I would like to introduce Bill Guthrie who is the General Manager of the Texas Project and extend my thanks to director Ed Newman who has worked tirelessly at Texas and to our Managing Director Denis O'Neill for his excellent leadership. In closing I wish all shareholders a Prosperous 2007 and thank you for your support over the past years. R.D.McNeil CHAIRMAN APPENDIX B SINIVIT DEVELOPMENT SCHEDULE Vancouver 8th December, 2006 New Guinea Gold Corporation ("NGG" or "the Company") reports significant progress has been made at the Sinivit Project. Facilities at site and operational now include an 80 man camp, office, logistics organization, all necessary mobile equipment, mining contractor and mining equipment, vehicles, explosives magazine, cyanide storage area, maintenance facilities, sample preparation facilities, all mine roads including mine haul roads, crushing plant and gold extraction plant. The surface of the mineralized zone has been benched for initial mining, grade control has been completed over surface exposures and grade control drilling using the RC rig has commenced. The crushing plant will commence commissioning in January and mining of gold mineralized rock and waste has already commenced.
Chairman and CEO Bob McNeil stated "Although development of the Sinivit Project is proceeding somewhat slower than we had planned there are no major impediments to gold production in the near future. Mining has commenced and crushing will commence in due course. It will take approximately 6 to 8 weeks to crush a sufficient supply of gold mineralized rock in order for processing to commence. At present gold prices of over AUD$800/oz, the Sinivit project is very robust and will provide a very strong foundation for continued expansion of the Company ." The schedule to gold production is now as follows:
NGG has a comprehensive drilling program in place for 2007 to define gold resources at other key gold properties, Normanby (Imwauna), Mt Penck, and Sehulea (Weioko). See also www.newguineagold.ca For further information contact Forbes West toll free at 888 655 5532, email forbes@sherbournegroup.ca or Judith O'Quinn at 604 662 3598, email ngg@telus.net The technical data in this release was prepared by or under the supervision of Robert D. McNeil, CEO of New Guinea Gold Corporation. Mr McNeil has an MSc in Geology, 44 years mining industry experience, is a Fellow of the Australian Institute of Mining and Metallurgy, and meets the requirements of NI 43-101 for a qualified person. ON BEHALF OF THE BOARD "R.D.McNeil" CHAIRMAN & CEO The TSX Venture Exchange has not reviewed and does not accept the responsibility of the adequacy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company. PROPOSED RE-ORGANISATION PLAN FOR NEW GUINEA GOLD PROPERTY ASSETS Vancouver, 16th November 2006New Guinea Gold Corporation (the "Company" or "NGG") holds interests in ten gold properties and two porphyry copper/gold/molybdenum properties in Papua New Guinea. The Company is focussing on gold - developing the Sinivit property (92.5% NGG) and defining resources on the Normanby property (Imwauna Project - 100% NGG), Sehulea Property (100% NGG), and Mt Penck Project (60% NGG). Although exploration is proceeding on all 12 properties, the financial resources of the company has not permitted exploration to proceed at a pace warranted by the potential of the remaining properties and present metal prices. The Company needs to obtain better value for shareholders from these assets. Management, our investment advisers and some major shareholders are of the opinion that the present share price and market capitalisation of the Company only reflects the few key properties on which exploration/ development is currently focussed and does not factor in a value for most of the remaining properties. Seven properties are being considered as part of the re-organisation and of these seven properties six are held in conjunction with Vangold Resources Ltd. The Boards of Directors of the partners are pleased to announce that their respective management teams are preparing a proposal for the re-organisation of mineral property assets currently held by Kanon Resources Ltd (Kanon), the Simuku porphyry copper/gold/molybdenum system held by NGG (90%) and Yeaman (10%) and the Mt Nakru porphyry copper/gold/molybdenum system held by NGG 50% and Kanon (50%). Kanon is owned 50% NGG and 50% Vangold. Each of the respective Boards of Directors have instructed their management teams to negotiate the terms of the re-organisation, review financing sources and nominate Boards of Directors. The terms of the re-organisation are subject to the necessary financing and the respective Board's, shareholder, regulatory and statutory approvals. The re-organisation will allow NGG to focus more closely on its three key gold properties, Sinivit (NGG 92.5%), Normanby (Imwauna 100% NGG), and Sehulea (Weioko 100% NGG). NGG will also retain its interests in J/V properties Feni and Crater Mountain. The re-organisation should allow a substantial increase in drilling activity at the key properties. The "spin off" companies being considered for the re-organisation are:
Mr Bob McNeil, Chairman and CEO of NGG states: "We all believe that the best way to benefit our respective shareholders is by transferring these highly prospective mineral property assets into the two new entities. Our Board is considering how shareholders can gain most benefit from the reorganization. Our preference is to distribute some or all of the interest retained by NGG directly to shareholders in proportion to their holding in NGG but I must emphasize that at this time the Board has not made a final decision. If this reorganization is approved, it will allow us to increase our activities on these projects without further major dilution of each company's shares. For example, we would expect to increase the current expenditures at Mt Penck by at least 100%, add additional drills to the program and also start a drilling program to define resources at the copper properties. I believe this will be a great opportunity for our shareholders." Mr. Dal Brynelsen, President and CEO of Vangold commented on the re-organisation by stating, "This is the first major step forward for Vangold's large portfolio of projects. Our mandate has always been to create solid, viable entities from our diverse projects directly enhancing shareholder value. This particular combination of properties will allow both new companies the opportunity to become such entities. The new companies will be well financed with a strong balance sheet and no debt. This will ensure that exploration and development can be expedited on a more timely schedule, with the aim of meeting our common goal that of furthering development and adding to the value of these important assets. I agree with Bob that Vangold would also look to distributing some or all of the interest retained by Vangold directly to shareholders in proportion to their holdings in Vangold." . NGG is also developing a gold project at the Sinivit property in Papua New Guinea and is currently engaged in resource definition drilling at the Imwauna Gold Project. NGG expects to commence drilling at the Weioko Project in the near future and recently completed a drilling program to test molybdenum potential at Simuku (results pending). Drilling continues at Mt Penck and will commence at Mt Nakru in the near future. In other PNG projects, recent field sampling and mapping at the Feni Project has defined a three square kilometer area within the former Ambitle Volcano collapse which warrants drill testing for Lihir style gold mineralisation (News Release 7 November, 2006). The Feni Project is presently held 50/50 by Vangold and NGG with Vangold retaining the right to acquire a further 25% interest. For further information contact Forbes West toll free at 888 655 5532, email forbes@sherbournegroup.ca or Judith O'Quinn at 604 662 3598, email ngg@telus.net The technical data in this release was prepared by or under the supervision of Robert D. McNeil, CEO of New Guinea Gold Corporation. Mr McNeil has an MSc in Geology, 44 years mining industry experience, is a Fellow of the Australian Institute of Mining and Metallurgy, and meets the requirements of NI 43-101 for a qualified person. ON BEHALF OF THE BOARD "R.D.McNeil" CHAIRMAN & CEO The TSX Venture Exchange has not reviewed and does not accept the responsibility of the adequacy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.      |
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