Black Fire Minerals in transforming acquisition of Pilot Mountain Tungsten Copper project in Nevada

Black Fire Minerals (ASX: BFE) has an agreement to acquire the advanced Pilot Mountain Tungsten Copper project in Nevada from Pacific Gold Corporation (OTCBB: PCFG).

The Pilot Mountain tungsten project ranks favourably in tungsten grade with many existing tungsten mines and resource projects worldwide.

Under the terms of the deal with PCFG, Black Fire will pay an initial US$50,000 in cash for a 100 day exclusive due diligence period and then may exercise its right to acquire a 24 month option to purchase for a further cash payment of US$450,000.

At any time before the end of the option period, the company may acquire 100% of the project for further cash payments spread over a further two year period totalling US$1.5m.

A further and final cash payment of US$1m will be made upon the commencement of commercial mining. The project is also subject to a royalty agreement with a third party totalling 2% of the gross revenue of any mining operation.

The project is located 250 kilometres southeast of the city of Reno in the mining friendly state of Nevada, USA, and its tenure covers significant tungsten, copper and silver mineralisation.

Union Carbide Corp initially discovered the prospect in 1916 and explored it between 1977 and 1983.

Due to a significant collapse in tungsten prices, Union Carbide decommissioned the project in the 1980’s after undertaking mining feasibility studies and a trial pit and has not been explored since this time.

The three main tungsten deposits within the project area; Desert Scheelite, Gunmetal and Garnet are not compliant with the JORC code.

However, Black Fire’s initial exploration target for these 3 deposits is 7-9 million tonnes at 0.30 – 0.37% WO3.

Over 150 diamond and percussion holes were drilled in the project area by Union Carbide.

Some examples of better historical drill results from vertical diamond holes (not true width) at the Desert Scheelite deposit include 26.3 metres at 0.43% WO3 from 43.6m in hole #66 and 43.3m at 0.24% WO3 from 22.3m in hole #29.

There are 11 other prospect areas that represent significant potential upside for the project in addition to the three historic tungsten deposits.

One of these is the Good Hope prospect where an historic vertical drill hole (RH#2) returned a down-hole intersection of 43m at 0.41% WO3 from surface.

Black Fire intends to commence an aggressive exploration program with the objective of bringing the historically defined mineralisation into JORC compliance and to advance a number of exploration targets and commence metallurgical and other studies.

With the acquisition, Black Fire has the opportunity to capitalise on the increasing demand for tungsten which has seen significant price growth both before and since the GFC, with increases of 80% in the last 12 months.

Tungsten's applications include high speed cutting tools, heavy machinery, specialty alloys, jet turbine engines, light bulb filaments and sporting goods.

In addition, the project has the potential for significant copper and silver credits.

Anthony Baillieu, Black Fire’s acting chairman said the company is "continuing to assess several additional new project opportunities to complement its existing project portfolio and we hope to secure one or more of those opportunities in the near to medium term.”

Simon Rigby, executive director, further commented, "the company’s initial exploration target of 7‐9 million tonnes at 0.30 – 0.37% WO3 compares favourably to existing operations and the exploration upside is excellent with all three deposits currently open and 11 further prospects identified within the project area."