Black Banana Prospect Opportunity, Guyana

UPDATE:

Download Black Banana Rock Samples PDF

Executive Summary

The Black Banana Project consists of ten (10) medium scale prospecting licenses, covering approximately  8,290 acres. The Black Banana property acquisition represents a low cost opportunity to acquire and develop high grade vein hosted gold and potentially a larger stockwork or disseminated gold target the Baramita/ Mathews Ridge area of Northwest Guyana. The host environment is the lower Proterozoic mafic metavolcanic and chemical sedimentary rocks of the Pastora – Supamo Terrane, similar in character and probably equivalent to the host rocks in the nearby El Callao District in Venezuela. Preliminary sampling confirms that the quartz veins which are subject to ongoing artisanal mining operations host high grade gold, and the host rocks are also mineralized with sufficient gold concentrations to consider the potential for a disseminated or stockwork target in addition to the veins. The acquisition and evaluation of this prospect can be managed in a cost – effective manner due to its location, the terms of acquisition, and the clear focus of this work.


Location and Access
This map shows the location of Guyana in relation to adjoining nations in South America. Guyana is English speaking, uses British Law, and is a stable parliamentary democracy. The property lies 22 km west of the commercial airstrip at Matthews Ridge, and can be reached by gravel roads and then in turn via 3 km of ATV trails. Construction of an all weather access can be achieved with a few days of bulldozer operating time because the access route from the government maintained road between Mathews Ridge and Baramita lies along a laterite ridge proximal to the targets of interest.

This map shows the location of the Black Banana Gold Property in relation to the nearest commercial Airport at Mathews Ridge (22 km east-northeast of the property) and a selection of major gold deposits and districts in Venezuela and Guyana.

Comparison of NW Guyana to the More Developed Districts in Venezuela
The mining potential of Guyana is much less developed than other nearby nations due to relatively sparse infrastructure however Guyana has a very good legal and business environment. The Black Banana licenses cover rocks with are of the same stratigraphic sequence (the same history and rock chemistry) as the nearby El Callao District in Venezuela, which has current reserves in excess of 15 million ounces of recoverable gold (including Choco 10, Lo Increible, Tomi, and the Columbia Mine) and has produced in excess of 10 million ounces since 1880. The area is famous for its sustained high grades and the continuity of the Columbia Mine Veins to depth. The highly prospective Eldorado (La Camorra and Valle Hondo) and Km 88 (Las Cristinas and Brisas del Cuyuni deposits) are hosted in a younger and distinctly different stratigraphic sequence but provide additional examples of the substantial mineral endowment of this region.

Property Title
The Black Banana property consists of ten medium scale prospecting licenses, each of which has a nominal area of 1,000 acres. Some of these licenses are clipped by the buffer zone of the Baramita Closed Area (an Amerindian Land Reserve) and the total coverage is therefore approximately 8,290 acres. The location of these claims is shown on the following map in reference to surrounding lands and their status. Shoreham Resources holds the exclusive option to acquire 100% of the Black Banana Licenses and the right to conduct exploration and mining activity while earning its interest.

Regional Land Status, Black Banana Property
The Black Banana Licenses cover part of a well located band of volcanic stratigraphy in an area covered by mineral licenses and prospecting permits.

Regional Magnetic Data in the area of the Black Banana Licenses
The magnetic signatures clearly show disruption of a magnetic volcanic unit near a regional fold axis and a series of NE trending structures. The NE trending Structures are the known mineralized shear and vein systems.

High Grade Gold Veins
The property vendor is producing between a few tonnes of this high grade material per day by heat spalling the rock and backpacking the ore down to the river where it is crushed and passed over an amalgamation plate to recover one to two ounces per tonne. Samples of this material returned assays as cited in the table below.

Results of Work To-Date
Mr. Stephen Lamazon, an experienced geological technician working with our team in Guyana, was sent to the property in May 2008 to conduct a confirmatory field examination. These are the results of his Phase I sampling. This quartz vein material is truly exceptional in grade, and the Black Banana Property is a high priority target for exploration and development.

Business Terms and Transaction History
The property was submitted to Shoreham in March 2008 and a Letter of Intent negotiated in May 2008. The property owner had to wait until September to receive his formal licenses so that the Letter of Intent could be formalized. The agreement calls for a US$2,000 symbolic payment on signature (which has been made), a 90 day due diligence review period, a US$23,000 payment on closing of Shoreham’s due diligence review, and a cumulative sum of US$157,500 in staged payments over four years. The agreement also calls for investments of US$300,000 in the exploration and development of the property, which can be waived if the cash payments are accelerated. The vendor retains a 3% Net Smelter Royalty which Shoreham can purchase at any time for US$500,000 per percentage point. The royalty can be treated as a cap by Shoreham if such an arrangement is more convenient.

Strategy
We are pleased with the technical merits of the property but do not wish to create the impression that we cannot focus on our priorities at Marudi Mountain. The Black Banana prospect is peripheral to our corporate goals. At this moment we are interested in using the Black Banana to attract cash – through leveraged investments (an obligation to make placements at prices above the prevailing market) and work requirements which carry our interest to vesting with the underlying vendor and pay all evaluation costs.