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SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): February 13, 1996
ConSil Corp.
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(Exact name of registrant as specified in its charter)
Idaho
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(State or other jurisdiction of incorporation)
0-4846-3 82-0288840
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(Commission File Number) (IRS Employer Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
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(Address of principal executive offices) (Zip Code)
(208) 769-4100
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(Registrant's Telephone Number)
Page 1 of 3 Pages
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Item 2. Acquisition or Disposition of Assets
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Registrant's wholly-owned subsidiary, Minera ConSil,
S.A. de C.V. (collectively, the "Registrant"), entered into an
agreement on February 13, 1996, for a three (3) month exclusive
pre-option period pursuant to which it may acquire an exclusive
option to purchase a 100% interest, subject to certain royalties
described below, in certain mining equipment and concessions
located in the state of Zacatecas, Mexico, known as the
Sombrerete Mine (the "Properties") from Grupo Catorce, S.A. de
C.V. ("Grucat"), a Mexican corporation. Consideration for the
three (3) month pre-option period is five thousand dollars
($5000) per month, during which time Registrant will perform an
investigation of the Properties. Should Registrant elect to
enter into the option, Registrant shall expend the following
minimum amounts by the following dates for the benefit of the
Properties: Two hundred thousand dollars ($200,000) within the
first six (6) months after the date of entering into the option;
five hundred thousand dollars ($500,000) within twelve (12)
months after the date of entering into the option; and eight
hundred thousand dollars ($800,000) within twenty-four (24)
months after the date of entering into the option. Registrant
may extend the term of the option up to five (5) years after the
date of entering into the option by making advance minimum
royalty payments to Grucat of one hundred fifty thousand dollars
($150,000) per year and work commitments of two hundred thousand
dollars ($200,000) per year for each year the option is extended.
Should Registrant exercise its option, the purchase price for
the Properties involves a cash component of one million U.S.
dollars (U.S.$1,000,000) and a production royalty component
described below. The cash component shall be payable over three
(3) years as follows: one hundred thousand dollars ($100,000) on
the first anniversary of the exercise of the option; one hundred
thousand dollars ($100,000) on the second anniversary of the
exercise of the option; and eight hundred thousand dollars
($800,000) on the third anniversary of the exercise of the option.
The production royalty component shall be the grant by Registrant
to Grucat of four percent (4%) of net smelter returns, which may
be reduced to two percent (2%) of net smelter returns by
Registrant paying Grucat one million dollars ($1,000,000) in
cash within ninety (90) days of Registrant exercising its
option.
Item 5. Other Events.
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On February 13, 1996, the Registrant issued the press
release attached hereto as Exhibit A, which is incorporated
herein by this reference.
Page 2 of 3 Pages
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Item 7. Financial Statements, Proforma Financial Information
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and Exhibits.
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Exhibit A - Press Release dated February 13, 1996.
SIGNATURE
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Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONSIL CORP.
By /s/ Nathaniel K. Adams
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Name: Nathaniel K. Adams
Title: Secretary
Dated: February 15, 1996.
Page 3 of 3 Pages
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ConSil Corp. EXHIBIT A
Suite 500 - 625 Howe Street
Vancouver, B.C. V6C 2T6
604/331-0844 - Telephone
604/331-0845 - Fax
13 February 1996
NEWS RELEASE
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ConSil Corp. is pleased to announce it has acquired an option to
purchase a 100% interest in the Sombrerete silver mine, Zacatecas
State, Mexico. Sombrerete, discovered in 1555, is the second
oldest silver mine in Mexico. Historical production is estimated
at 150 to 200 million ounces.
Sombrerete produced most recently from 1950 to 1991, when it
closed down due to low silver prices and Mexico's high inflation
with an unfavorable exchange rate. Just prior to closing,
production of about 300 gpt (10 oz/ton) Ag was from waste dumps,
old stope fill, extensions of known ore shoots and a newly
discovered ore shoot. Historical mining grades are estimated at
700 gpt (23 oz/ton) Ag, with 1.5 gpt Au, 3.5% Pb and 5.5% Zn.
Proven and probable reserves at shut-down were reported at
404,000 tonnes grading 295 gpt Ag and 0.5 gpt Au.
The immediate potential at Sombrerete is the new ore shoot on the
main vein structure, Pabellon, on which mining had just been
initiated at shut-down. On the 345 m level the shoot graded 300
gpt Ag across a 15 m width, along with a 100 m strike length. No
exploration has been carried out on this wide shoot between the
mining level and surface. Historically, these shoots produce
bonanza grades higher in the structure, closer to surface. Thus,
there is potential to build significant reserves quickly. In
addition, there is excellent potential for the discovery of more
shoots along both the main vein and a parallel structure, which
are known to extend at least 2 km further to the northwest. The
parallel structure, also a former producer, contains an
undeveloped 840 gpt Ag diamond drill intercept on the 505 m
level.
ConSil can acquire a 100% interest in the Sombrerete Mine from
Grupo Catorce, S.A. de C.V. ("Grucat") for US$1 million over a
three year period, with a US$100,000 payment at the end of year
one, US$100,000 at the end of year two and US$800,000 on the
exercise of the option. The option can be extended for up to 5
years with the payment of an additional US$150,000 pre-production
royalty each year of extension. During the option, ConSil will
perform a minimum US$200,000 work program in the first six
months, US$500,000 in the next six months and US$800,000 in the
next twelve months, plus US$200,000 in exploration work during
any option extension year. Grucat will retain a 4% NSR, which
can be reduced to 2% with a payment of US$1 million. The
purchase includes a 400 tpd flotation mill, two operating shafts
and related mining equipment and infrastructure.
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ConSil has a due diligence period of up to three months. A
1,500 m surface diamond drilling program will commence
immediately upon completion of due diligence. With successful
exploration, the mine could be back in production, with a
targeted production rate of 500 tonnes per day and a grade of 450
gpt (15 oz/ton) Ag, as early as mid-1998.
ConSil's listing application has been submitted to the Vancouver
Stock Exchange and formal approval is expected shortly.
On behalf of the Board of Directors,
/s/ Ralph R. Noyes, Chairman
For further information contact Gerry Carlson at 604-331-0844 or
Ralph Noyes at 208-769-7610.
