In light of the limited information contained in recent Minera filings regarding its existing copper assets, the Company believes it is useful to provide some additional information on the Los Verdes and Potreritos projects which were owned by
'While there have been obvious changes in costs since the Los Verdes PEA report was published this has been accompanied by recent strengthening of metal prices. The current environment provides an ideal opportunity to revisit the development of a potential copper production 'hub' in southern
The following sections contain highlights of the current NI43-101 compliant Preliminary Economic Assessment for the Los Verdes project as well as some discussion regarding additional upside potential provided by the nearby Potreritos acquisition. While there are no immediate plans to refile an updated PEA at this time, the Company is presenting the information along with the sensitivity analysis performed on the project economics to provide some background in advance of a restart of engineering and exploration activities related to the projects.
Los Verdes PEA Economic Highlights
Highlights from the current PEA for the Los Verdes project are contained in the table below. The PEA report for
In
Suaqui Verde Acquisition
Further to the Company's press release of
Los Verdes Deposit PEA - Summary of Technical Data
The Los Verdes deposit PEA is based on a resource estimate completed by
Initial Capital Costs:
Mine Production Rate: 3,000 tonnes per day
Cash Costs:
Metallurgical Recovery: 85% for copper/molybdenum/silver
Estimate of mineable resources was prepared by the production of a preliminary Whittle pit outline using economic parameters from current PEA. No dilution factor was applied to recovered grades due to the fact that essentially all (+95%) of the resource blocks were mineable.
The initial capital cost estimate of
The average life-of-mine (LOM) unit operating costs for the project were estimated at
Based on metallurgical testwork completed for the project a conservative metal recovery of 85% to concentrates was assumed for copper, molybdenum and silver. The current metallurgical flowsheet has been able to demonstrate that salable quality concentrates can be produced for all of these components (note - silver reports to copper concentrate). A preliminary allowance of 50% for tungsten recovery has been included in the current study. Additional metallurgical work is required to determine whether the recovery of tungsten to a salable concentrate is a viable option for the Los Verdes deposit. 'Typical' concentrate treatment terms and conditions have been utilized for all economic analyses.
A number of opportunities were identified in the PEA study to further enhance the Los Verdes project development plan and economics. These included: Optimization studies aimed at improving overall metal recoveries; Inclusion of used equipment for plant facilities; Evaluation of alternatives for tailings containment facilities; Discussions with purchasers of metal concentrates to maximize payable metal values and
Metallurgical work on oxide resources to determine if additional cash flows can be generated from material currently classified as 'waste'.
Sensitivity Analyses
The results of a sensitivity analysis performed on the Lose Verdes deposit PEA base case economic model are shown in the table below. The sensitivity modeling demonstrates that the project economics are most impacted by variations in metal prices and mined grades and least impacted by capital requirements and operating costs.
The Los Verdes property is a historic molybdenum producer, which was extensively drilled in the 1970s. Repetition and expansion of that drilling by Virgin in 2006 and 2007 resulted in the completion of a pre-feasibility study in 2008. That pre-feasibility study demonstrated, in considerable detail, a robust project based on molybdenum and copper recovery only; with upside existing in tungsten and silver recovery as well as improvements in copper and molybdenum recoveries. The Los Verdes resource comprises a modest sized, compact zone of molybdenum, copper and tungsten mineralization located at the crest of a steep ridge. The geometry of the deposit is ideal for low cost open pit mining.
In
The Los Verdes/Potreritos project is made up of 17 titled exploration concessions, covering 6,629 hectares. It lies within what could be considered the southerly extension of the Basin and Range province of the southwestern
PEA Study Development Methodology
The general methodology utilized for the development of the PEA study was: A complete metallurgical processing model was completed using the Metsim software package and utilizing the testwork data completed primarily at
Mass and energy flows were taken directly from the process model and then utilized to identify and size all major process equipment items.
Capital costs were estimated for individual equipment then applied to account for additional requirements such as foundations, piping, electrical, buildings and engineering.
A conservative 30% contingency was added to all process plant capital cost estimates to account for items that were not specifically identified at this stage of the study.
Conceptual capital costs were prepared for tailings containment facilities. A study is currently underway in conjunction with
Infrastructure were developed based on a plant site location within approximately 2 km of the mine site. Infrastructure requirements included road construction and upgrades, power lines and site preparations. An allowance was made for the construction of a new road from the plant to the main highway in order to ensure that mine traffic bypasses the local town.
Owner's costs include allowances for permitting requirements, freight, first fill of consumables, spare parts and plant commissioning. Excluded from owner's costs are corporate overheads and working capital requirements.
Operating costs were developed based on estimated staffing levels, consumables (from testwork and modeling) and expenditures required to support the mine and its associated processing, maintenance and administrative activities. Power requirements were estimated based on equipment motor sizings and assuming a conservative delivered charge of
An overall contingency of 20% was applied to the operating cost totals (excluding labour) to account for additional cost items such as outside contractors, laboratory consumables, vehicle fuel requirements, etc.
All mine operating activities are assumed to be the responsibility of a third party mine contractor. Contractor rates include drilling, blasting and transportation of the waste/ore. Costs for the Company mine services group were prepared separately and included separately.
Crushing was assumed to be the responsibility of a third party contractor using portable crushing equipment (two stage crushing circuit). Contractor rates include crushing, handling and transport of crushed ore to plant facilities.
A conceptual Whittle open pit model was prepared in conjunction with
Potreritos Deposit
The Potreritos project hosts the historic Buenavista mine and Provindencia mines. The pegmatitic bodies with higher grade disseminated mineralization are located in the north-central portion of the property. The Buenavista zone is constituted by a 200 m by 250 m ovoid shaped area with at least 50 m of depth, conformed by fine grained granodiorite stock, traversed by numerous pegmatitic quartz K-feldspar dikes. Drilling has demonstrated the potential for this mineralized zone to extend at depth. Foliated masses of molybdenite, associated with black coloured acicular tourmaline, characterize its composition. Within the area, several outcrops of breccias pipe bodies (2 km diameter), rich in tourmaline and quartz, have been located.
In addition to the mineralization already identified in the areas of historic mine workings, the geology of the Potreritos deposit is such that it allows for the existence of similar bodies in areas not yet explored. Exploration work completed in 2007/8 in conjunction with the SGM (Servico Geologico Mexicano) has identified a number of other occurrences within the Potreritos claim area with indications of copper/molybdenum mineralization.
A significant IP anomaly in the south of the property (
An IP anomaly in the east of the property (Algarrobos area) coinciding with the presence of quartz-tourmaline breccias and tungsten anomalies such as those located at the Los Verdes deposit.
A fumarolic epithermal zone in the northwest of the property characterized by a strong anomaly with the presence of arsenic, tellurium and selenium. A historic borehole drilled in this zone intercepted an intrusive body which was highly fractured and altered, containing traces of copper and molybdenum below the volcanic rock. It is believed that the alteration found at surface in the volcanic rocks could be owed to this intrusion and at greater depths may form a mineralized copper-molybdenum deposit.
Contact:
President
Tel: 604-600-4423
Email: dramshaw@mineraalamos.com
Tel: 289-242-3599
Email: vvargas@mineraalamos.com
Web: www.mineraalamos.com
About
The Company's strategy is to develop very low capex assets while expanding the projects' resources and continuing to pursue complementary strategic acquisitions.
Caution Regarding Forward-Looking Statements
This news release may contain forward-looking information and
The Company does not have a feasibility study of mineral reserves, demonstrating economic and technical viability for the Santana project, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure.
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