On behalf of the Board of Directors, I am pleased
to update you on the business plan for the company and
progress of El Niņo Ventures Inc ("ELN", the "Company")
(TSX.V:ELN, OTCQX:ELNOF, FSE:E7Q) for 2011 thus far as
well as our goals and objectives for the balance of this
year and beyond.
El Niņo Ventures Inc. is an international exploration
company, focused on exploring for lead, zinc, copper,
gold and silver in New Brunswick, Canada and
Copper/Cobalt in the Democratic Republic of Congo (DRC).
2010-2011 Accomplishments
Harry Barr
Chairman & Acting CEO
Added key technical, administrative and
financial personnel to El Niņo's teams in both Canada and the
DRC
Two phase financing: $2,128,159 total
closed for over-subscribed $1.5M non-brokered private placement
announced on
March 1st, 2011 (See press release dated
April 8, 2011).
Both DRC Judgments rendered in our favor;
ELN appoints new manager for its J/V Company, Infinity Resources
Sprl.
El Nino Ventures entered into a
Participation Agreement on the Murray Brook Massive Sulphide /Polymetallic
Deposit situated in the Bathurst Mining Camp in New Brunswick,
Canada with Votorantim Metals Canada (see press release dated
January 20, 2011)
Completed Phase I exploration program
including a 3,132 metre drill program and Airborne geophysics
Commencing $1M Phase II drilling program
including 6,650 metres drilling program.
Conducting airborne geophysics, part of a
$5M exploration program, at the Tri-Party agreement in Bathurst
Mining Camp Project. This exploration initiative includes a
10,000 metre drilling program that has commenced.
El Niņo is involved in two
major exploration programs in New Brunswick, Canada;
Murray Brook Deposit
The Murray Brook
deposit is a polymetallic, volcanic hosted, massive‐sulfide deposit
and is the fifth largest in the Bathurst Mining Camp. The property
is located approximately 60 km west of Bathurst New Brunswick,
within the Bathurst Mining Camp.
An existing gravel road accesses the property from a paved highway.
The electricity grid is nearby, as are communities with goods,
services and skilled labor.
Under Votorantim's Option and Joint Venture Agreement
with Murray Brook Minerals and Murray Brook Resources, both
privately held companies, Votorantim can earn a 50% interest in the
Properties, by funding $2,250,000 in exploration expenditures and
making payments totalling $300,000 over a three year period
commencing November 1, 2010. Votorantim can earn an additional 20%
interest in the Properties by funding an additional
$2,250,000 in exploration expenditures over an additional two year
period.
Figure 1- Murray Brook and Camel Back Property
Map and Geophysics
ELN has elected to enter into a
participation agreement wherein it can earn 50% of Votorantim's
interest by paying 50% of the costs incurred by Votorantim in the
Option and Joint Venture Agreement. Murray Brook Deposit has a past
production of; 1,384 kg gold and 9,829 kg silver. Copper rich zone
within this deposit contains an estimated 2.087 Mt grading 2.0% Cu,
1.1% Zn, 0.4% Pb, 46 g/t Ag and 0.3 g/t Au
The presence of favorable stratigraphy and some untested EM
anomalies shows that the Camel Back block, which is a second project
adjacent to Murray Brook and is part of the participation agreement
between Votorantim and ELN merits further exploration for
discovering new deposits.
Figure 2- Murray Brook Open Pit
During the Phase I exploration program a total of 15 holes havebeen completed. Phase I drilling campaign focused on
three objectives;
Infill drilling; Drill
holes are located between historical, collar locations; where
there are up to 100 metres between reported intercepts in
historical holes, compiled from work reports of earlier drill
programs.
Step-out drilling; to
expand the size of the massive-sulphide body.
Due Diligent drilling;
Votorantim, as operator, conducted a 595.2 metres diamond
drilling program to confirm results reported from previous
drilling programs on the Murray Brook mining lease.
Significant assay results
from an initial 595 metre, due diligence drill program on the Murray
Brook deposit included;
7.51% Zinc; 4.24% Lead 84.0 g/t (2.45 opt)
Silver; 1.0 g/t (0.05 opt) Gold and 0.10% Copper over 17.00
metres (55.77 ft) in hole MB-10-15.
The weighted average, metal content of complete
sulphide intervals through the deposit from all Phase I holes,
comprising 1,034 samples obtained from 1,069.5 metres of massive to
semi-massive sulphide @ 0% metal cut-off, yields a weighted average
of:
All sulphide intervals: 0.36% Cu; 1.15% Pb;
2.99% Zn; 0.61 g/t Au; and 42.80 g/t Ag.
Equivalent to: 9.2% Zn using metal
prices on February 28th, 2011.
Out of a total of 1,034 samples obtained from within the massive
sulphide body, 121 samples (12%) returned assays of
greater than 10% Pb and Zn combined and 248 samples (24%) returned
values of greater than 1 g/t Au.
Management believes the economic-potential calculations
look quite attractive at current metal prices for the Murray Brook
project. Recent assay results confirm historical resultsreported by previous operators and are very
encouraging with further diamond drilling recommended evaluating the
deposit.
Due to encouraging phase I results,
a phase II, 6650 metre drilling program was initiated with results
are expected by early fall 2011.
Tri Party Option Agreement with Xstrata Zinc
Canada & Votorantim Metals -- Bathurst Mining District, New
Brunswick
In New Brunswick, El Niņo holds a 50%
interest in an extensive base metal project located within the
Bathurst mining camp in Bathurst, New Brunswick, where earlier
drilling campaigns have been carried out on several historical
deposits of lead, zinc and copper mineralization within the large
claim block (4712 claims) owned 50% ELN, 50% Xstrata Zinc.
El Niņo entered into an option
agreement with Votorantim Metals Canada Inc. and Xstrata Zinc Canada
(The Bathurst Tri-Party agreement) whereby Votorantim may earn a 50%
interest in El Niņo's landholdings by expending $10 million over 5
years and may further increase its interest in El Niņo's
landholdings to 70% by expending an additional $10 million over a
further two years. (See press releases dated May 26, 2006
& July 22, 2009)
Figure 3- Sulphides in Murray Brook Drill Core
Figure 4- ELN Bathurst Project's Locations
The Tri-party option agreement is between Xstrata
Zinc Canada, El Niņo Ventures and Brazilian mining company,
Votorantim Metals.
Votorantim has an option to obtain a 50%
interest by incurring exploration expenditures of $10M over
a period of 5 years.
Votorantim may increase its interest to
70% by expending an additional $10M over 2 years
Votorantim's
2011 expenditures will be $5M and will include up to
10,000 metres of drilling, currently underway --
results expected Q3 2011
2011 Phase 1
Property wide HeliTEM survey, Fugro
Airborne Gravity, utilizing a 100m line spacing to provide
better resolution than earlier fixed wing gravity systems to
directly detect large buried massive sulphide deposits has
been completed: Final HeliTEM survey and Fugro Airborne
Gravity results are pending.
A focused 10,000 metre drill program is
underway which will test several specific targets that are
the result of previous exploration initiatives.
Kasala
Copper-Cobalt Project -- Democratic Republic of Congo (DRC)
The Company has been focused on
the development of several exploration permits in the Democratic
Republic of Congo (DRC). Over the last 3.5 years, the Company
has completed approximately 12,000 metres of reverse circulation
drilling and 5,500 metres of diamond drill holes on three of the
Company's exploration permits. Management believes that a
significant new copper discovery was made on the Kasala Project with
the known mineralized strike length being traced to 800 metres.
Exploration to date has outlined two major parallel zones east of
Kasala which have a combined strike length of over 3 km. The
Kasala project is located only 26km NW from Anvil's Kinsevere Mining
project, which is scheduled to commence commercial production for Q3
2011.
El Niņo's previous drilling proved high
grade mineralization over mineable widths include:
o22 m at 3.28% Cu
o29 m at 2.82% Cu
o31 m at 2.19% Cu
o11 m at 3.68% Cu
Unfortunately the Company has been unable to advance its exploration
programs for the past two years as it was forced to respond to a
series of spurious and unsubstantiated claims which the Company has
successfully challenged, which resulted in having its former manager
removed and a new manager appointed for its DRC joint venture
company, Infinity Resources Sprl. As well, the company has
filed a series of specific claims against the previous manager and
is proceeding with arbitration in British Columbia, scheduled for
October, 2011.
Figure 5- ELN Congo Project's Locations
The following is a chronological order for these
claims and of our success to date in addressing these spurious
charges the result of which has allowed us to begin reestablishing
our ability to conduct business and secure our assets in the DRC.
June 24, 2010: ELN successfully defends its position
resulting in litigation in the DRC being dismissed;
Subsequently, El Niņo Files $850,000 claim against Georges
Kavvadias and GCP Group Ltd. in Canada for Breach of Agreement
and fraud
August / September 2010 - El Niņo files two
judgments in the DRC against George Kavvadias and GCP Group to
remove him as manager of Infinity Resources Sprl for
incompetence and negligence and for gross misuse of a Power of
Attorney
October 1, 2010: El Niņo charges Georges Kavvadias
and GCP Group with Fraud, Fraudulent Misrepresentation,
Misappropriation of Funds, Breach of Agreement and Claims for
USD$ 850,000 + damages in the Supreme Court of British Columbia
by El Niņo.
January 5, 2011 - El Niņo received notice from the
Supreme Court of British Columbia of the hearing held on
November 25, 2010 regarding its Notice of Dispute and Petition
against George Kavvadias and GCP Group. The Company was
successful in having the Court determine that these claims
should be decided through arbitration.
January, 2011 -- ELN initiates process of
identifying arbitrator for arbitration of the claims submitted
to the Supreme Court of BC. After continuous delaying
tactics by Mr. Kavvadias, an arbitrator has been confirmed with
arbitration set for October, 2011.
April 11, 2011: Announcement that DRC court rules in
favor of El Niņo for two judgments against George Kavvadias.
Removing him as Manager of Infinity Resources Sprl and charging
him with incompetence, fraudulently issuing minutes of a
shareholders meeting and for gross abuse of a Power of Attorney.
June 20, 2011: Results of the above
Court action allows El Niņo to take over possession/control of
its 70% owned subsidiary, Infinity Resources. El Nino appoints
new manager, begins to reestablish corporate control over its
affairs in the DRC.
Although appeals have been submitted, management
believes that we will be successful in all instances and that it was
imperative that the Company do everything in its power to protect
its investment and assets on behalf of its shareholders. To support
its decision in devoting substantial time and money on securing this
important asset, the Company has conducted ongoing extensive
re-evaluation of all of its historical geological data and has had
meaningful and informative discussions with major companies who have
shown a serious interest in the Kasala project. Due to the
quality of the asset and the following the project has generated
with senior and mid-tier mining companies and institutional
investors, we plan to conclude the above mentioned legal matters on
a timely and cost effective basis so that we can go on to explore
and develop our DRC assets.
In anticipation of removing these last obstacles the Company has
prepared a budget for an extensive exploration plan which will
include both surface and drilling programs to successfully realize
the full potential of these highly prospective properties. Over the
last two years, your company has assembled a key technical, legal
and administrative management team for the DRC. Management is
continuing to seek additional quality properties not only in this
mineral-rich area of the world but in other parts as well.
The junior exploration sector has suffered considerably from the
recent global economic crisis. However the first five months
of 2011 provided the junior market with excellent liquidity,
increasing share prices and the ability to raise equity to further
El Niņo Ventures' objective. From May through to July, some of
the gains have been marginalized but metal prices have remained
strong and demand is going up; analysts that focus on base metals,
gold and silver point to growing demand for the metals market and
strong pricing over the foreseeable future. ELN directors and
management are very optimistic about our company and its projects
and look forward to continuing to provide you with the positive
results from our projects for the balance of this year's exploration
activities. We have made significant progress on both of our
Bathurst, New Brunswick projects and would like to acknowledge the
technical and financial help we have received from our partners,
Votorantim.
