Pan American Goldfields Reports Q1 2012 Pilot Production and Revenues from The Cieneguita Project and The Completion of $2.1 Million Private Placement

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• Publié par: pan-american-goldfields-ltd
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• Langue: English

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Pan American Goldfields Reports Q1 2012 Pilot Production and Revenues from The Cieneguita Project and The Completion of $2.1 Million Private Placement

PR Newswire VANCOUVER, British Columbia, July 23, 2012

VANCOUVER, British Columbia,July 23, 2012/PRNewswire/ -- Pan American Goldfields Ltd. (OTCQB: MXOM) (the "Company") is pleased to announce mineral production and revenues received from pilot production at its Cieneguita Project located inChihuahua, Mexicofor the quarter endingMay 31st, 2012. In the Company's first quarter 2012 (the three months endedMay 31, 2012), its joint venture with Minera Rio Tinto (MRT), a private Mexican company, generated net cash flow from pilot operations of approximately$2,960,000, of which$592,000is attributable to Pan American under the joint venture agreement. Pan American's percentage interest in the cash flow from the pilot operation, which was financed entirely by MRT, is 20% in the shallow ores mined (up to 15 meters) and 80% below that level. The pilot mining is focused on a higher-grade zone of mineralization in pit 3. The most recent month's pilot production (June 2012) reached a record 1,624 oz/Au eq. compared to 1,280 0z/Au eq. in May. Production during the first quarter averaged 471 tons per day with an average Au recovery of 89.5% and an average Ag recovery of 90%. The average head grade was 1.42 grams/ton Au and 83.6 grams/ton Ag. The addition of a second water source improved water recycling and more recently adequate precipitation has resulted in the MRT facilities operating at near design capacity. The pilot production is being conducted by MRT, and under the current st contract, production is to endDecember 31, 2012. AfterDecember 31, 2012, MRT can maintain its 20% interest in the project by contributing to the project's development on a pro-rata basis as it is developed according to the results of an ongoing preliminary economic assessment (PEA) which is progressing under the guidance of M3 Engineering & Technology ofTucson, Arizona. The Company is in talks with MRT regarding revising the agreement to allow MRT to profitably mine certain ores below 15 meters and to allow the continuation of this pilot operation until December, 2013 in return for an increase in the Company's portion of the net cash flow from the pilot operation. Mining during this period, if it occurs, is expected to focus on the higher-grade zone currently being mined in pit 3. At its current 500 TPD rate of production the Company estimates that extending mining through the end of 2013 would impact less than 1% of the current resource.

Cieneguita Mineral Production and Revenue 2012

 CIENEGUITAThis This  BULKPRIMARY monthmonth (April(March (Feb.(Jan.  FLOTATIONJune 1May 11 to1 to1 to2 toYear to  2012to 30to 3130) 31) 29) 31)Date  Tonsmilled 16,24514,804 12,175 15,452 14,766 14,25587,696  TPD560 493 406 515 509 492528  HeadGrades (Au)1.3 1.38 1.48 1.42 1.53 1.641.45  HeadGrades (Ag)112 93 76 82 91 8490  Recovery% (Au)89.4 90.4 89.289 89.6 89.5 89.52  Recovery% (Ag)92.3 88.891 90.4 90.2 89.8 90.43  OuncesGold Produced608 593 517 629 651 6733,670  OuncesSilver Produced54,163 36,633 28,497 36,517 37,819 35,071 228,700  OuncesGold  Equivalent  Produced  ($1600/$30)  1,6241,280 1,051 1,313 1,360 1,3317,959

Private Placement The Company has also completed a$2.1 millionprivate placement offering where it issued 17.5 million shares of its common stock at a subscription price of$0.12per share. Of the aggregate$2.1 million,$1,050,000was paid as cash and$1,050,000was paid through the transfer of real property inArgentina valued at$1,050,000. The Company is in the process of selling the$1,050,000worth of what it considers to be highly marketable properties, which are located inSan Carlos de Bariloche,Argentina. The proceeds from their sale are intended to be used to fund a planned winter 2012-2013 drilling campaign at the company's Cerro Delta,Argentinaproject. Of the$1,050,000cash portion, part is to provide funding to allow for the timely completion of the ongoing PEA for a larger mining operation at the company's Cieneguita Project. Metallurgical testing for the PEA is currently nearing completion, as is an updated geologic model of the deposit and associated mineralization. Preliminary site layout work has been completed and is awaiting confirmation of ongoing geotechnical work related to mine waste rock dumps and sulfide flotation tailings. TheCieneguitadeposit contains a NI 43-101 compliant resource of 1.1 million Measured and Indicated gold equivalent ounces. This resource contains 20,087,000 Measured and Indicated tonnes grading 0.74 g/t gold and 51.8 g/t silver and 453,000 Inferred tonnes grading 0.99 g/t gold and 34.2 g/t silver.

About Pan American Goldfields

Pan American Goldfields is a precious metals mining and exploration company with projects inMexico'sbooming Sierra Madre gold-silver belt and the Maricunga Gold Belt straddling the border betweenArgentinaandChile. The Company's most advanced development is its now producingCieneguitagold- silver mine, where a preliminary economic assessment for the expansion of the operation is underway. In addition, the Company holds the Cerro Delta project

inArgentina, where it is preparing to drill-test a series of large porphyry-style copper-gold occurrences - which are on structure and 12 miles east of Barrick's 23.2 million oz/Au Cerro Casale in the Maricunga gold belt. The Company continues to assess other high-impact acquisitions inColombia,Argentinaand Mongolia. On behalf of the Board of Directors, Neil Maedel, Chairman

Safe Harbor Disclosure

The information in this press release contains forward-looking statements regarding future events or the future financial performance of the Company. Please note that any statements that may be considered forward-looking are based on projections; that any projections involve judgment, and that individual judgments may vary. Moreover, these projections are based only on limited information available to us now, which is subject to change. Although those projections and the factors influencing them will likely change, we are under no obligation to inform you if they do. Actual results may differ substantially from any such forward looking statements as a result of various factors, many of which are beyond our control, including, among others, the timing and outcome of our feasibility study on our Cieneguita Project; the costs and results of our initial production activities on our Cieneguita Project; the future financial and operating performances of our projects; the estimation of mineral resources and the realization of mineral reserves, if any, on our existing and any future projects; the timing of exploration, development, and production activities and estimated future production, if any; estimates related to costs of production, capital, operating and exploration expenditures; requirements for additional capital and our ability to raise additional capital on a timely basis and on acceptable terms; government regulation of mining operations, environmental risks, reclamation and rehabilitation expenses; title disputes or claims against our existing and any future projects; and the future price of gold, silver, or other minerals. These and other factors can be found in our filings with the SEC. The Company undertakes no obligation to release publicly the results of any revision to these forward-looking statements to reflect events or circumstances following the date of this release. For further information: Email: [e-mail] Tel: [phone]