February 18, 2025
Dear Shareholder,
Three significant and favourable events involving Muzhu in and around our properties in both the Ying Mining District, China, and at the Sleeping Giant Mine in Quebec, Canada, encouraged me to provide this update to our previous “Letter to Shareholders” from last October. (view here)
We are at a pivotal moment in the growth of Muzhu, and I feel it is imperative that our shareholders and potential new investors be kept up to date on developments as they unfold.
As of this writing, the price of gold continues trending upward to all-time highs. At USD $ 2,932, since the start of 2025, gold is up 10%. Over the last year, gold has increased 42%. What the market is telling us is open to interpretation but as I said, back in October, in the mining business timing is everything. Certainly, having this wind at Muzhu’s back makes for an inviting backdrop to diligently execute the many opportunities as they present themselves.
1. NEW MUZHU CHINESE PROJECT: WLG F12 Vein Project
Located a mere 21 km northeast of our XWG and LMM properties, the newly dubbed “WLG F12 Vein” project within the Wulonggou Gold Mine (“WGM”) system represents an exciting new opportunity that materialized as a result of local relationships that have been nurtured over many years. This new project is the very embodiment of the Muzhu strategy: to find under-the-radar opportunities offering minimal barrier-to-entry with an upside potential that can be executed with efficient and disciplined planning
The WLG F12 Vein was closed approximately 20 years ago to make room for the construction of a new highway. However, other veins in the Wulonggou Gold Mine system remained in production and recently, Muzhu was able to secure an Exploration Agreement to re-open the WGL F12 Vein by entering the system via the creation of a new portal. In September of last year, Muzhu’s Chinese subsidiary, LSM, executed an Exploration Agreement and paid a refundable deposit of CAD $190,000 to the owners for the exclusive rights to explore and investigate the WLG F12 Vein, the deepest vein in the Wulonggou Gold Mine’s mineralized system.
In only 3 months, under the skilled guidance of Board member and VP of China Operations, Anthony Tam, a new portal and drift to the historical workings of the WLG F12 vein has been achieved (see photos below) and a 5,000-ton bulk sample is being excavated in preparation for processing at a local floatation mill, some 9 km away. In what can be considered a vote of confidence, an advance deposit of $40,000 CAN was received by LSM from a Chinese smelter agent against the potential value that may be realized once the bulk sample is processed and refined.
Muzhu’s New Portal #684
F12 Vein
2. MUZHU LMM PROPERTY – Developments at Silvercorp Metals Inc. (“Silvercorp”) adjacent to LMW Mine
In a press release on December 18, 2024, Silvercorp released impressive drill results at their LMW gold and silver mine and expanded their resource with expansion and infill drilling as well as constructing a total of 15,694 metres of exploration tunnels. (view here)
Silvercorp’s LMM is immediately adjacent to Muzhu’s LMM property in the Ying Mining District.
For those who are not geologists or “rock hounds”, a vein intercept is when a drill hole intersects a gold or silver-bearing vein. Keep in mind that a vein is the “ore bodies” that contain the silver or gold deposits. The “richness” of a vein is measured in grams per ton. Using standard measurements, 32 grams is equal to one troy ounce. Gold and silver are measured in grams per ton (“g/t”). For instance, 32 grams per ton would be the equivalent of 1 ounce per ton. An ounce of gold is valued today at USD $ 2,932.20. An ounce of silver is valued today at USD $ 32.81 which is a 40.2% increase in the last year.
Silvercorp’s reported results include:
- Hole ZKX1019 intersected 34 g/t gold over an interval of 0.82 metres
- Hole ZKX03X151 intersected 29 g/gold over an interval of 1.11 metres
- Hole ZKX1613 intersected 2,705 g/t silver over an interval of 18.02 metres
- Hole ZKX13828 intersected 1,367 g/t silver over an interval of 1.80 metres
Based on the vein structures shown in the above map that are currently being mined by Silvercorp and their recent tunneling and drill results, Muzhu will test the theory that the same or similar geology extends to Muzhu’s LMM and XWG properties.
3. MUZHU SLEEPING GIANT SOUTH PROPERTY – Developments at Abcourt Sleeping Giant Mine
Directly adjacent to Muzhu’s Sleeping Giant South property, two significant events have occurred in this region since my October 2024 newsletter.
Firstly, Abcourt Mines Inc. continues to successfully operate the Sleeping Giant Mine while expanding and advancing its known resources from inferred to indicated status. As recently as February 13, 2025, Abcourt published these encouraging results from 2 underground drill holes at level 785. (view here)
- Holes 78-885 and 78-886 intersected the 785N Zone at targeted depths with 41.6 g/t gold over 0.7 metres in hole 78-886.
- Holes 78-885 and 78-886 also intersected other mineralized intervals outside the 2022 Mineral Resource Estimate model:
- Hole 78-885 intersected 15.44 g/t gold over 3 metres including 54.7 g/t gold over 0.6 metres, and
Hole 78-886 intersected 29.13 g/t gold over 0.6 metres.
Abcourt is continuing its underground drilling program to develop mining potential at depth.
Secondly, in a news release dated January 24, 2025 (view here), Agnico Eagle Mines Limited (NYSE: AEM, TSX: AEM) (“Agnico Eagle”) announced that it had acquired 94.1% of the O3 Mining Inc’s (view here) outstanding shares (TSXV: OIII, OTCQX: OIIIF).
Agnico Eagle Mines is the third largest gold producer in the world and their acquisition of O3 Mining increases the potential for future company acquisitions in the region.
Final Thoughts
All of what is being reported above is incredibly encouraging to the team here at Muzhu and reinforces the belief that our newly implemented strategy is moving us progressively in the right direction. We are excited to see these developments continue to unfold in the next several months.
Dwayne Yaretz
CEO/Director