VANCOUVER, BRITISH COLUMBIA — (MARKET WIRE) — 10/17/11 —
Table 1 below presents the updated resource estimate for the Aranzazu Mine at a 0.5% Cu cut-off and Table 2 shows the resource estimate at a 0.8% Cu cut-off. The cut-off is based on copper grades only.
The 0.8% Cu cut-off is being used for resource definition of the Arroyos Azules, BW, and Mexicana zones, which are actively being mined. The 0.5% Cu cut-off will be used to continue to assess the potential of the project to be ramped up to a bulk underground operation. The updated resource estimate is based on (i) in-fill drilling of the deposit in order to increase the confidence level for the overall system and ensure a minimum of 25 metre centres for ongoing reserve estimates; and, (ii) deep drilling that has extended the mineralization at depth. Since the September 2010 resource estimate(1), the Company has completed an additional 56,665 metres of drilling in 224 drill holes prior to the May 20th cut-off date for the updated resource estimate. Since taking over the Aranzazu Mine in June 2008, the Company has completed a total of 108,052 metres of drilling in 471 drill holes.
Table 1 – Aranzazu Resource Estimate – 0.5% Cu only cut-off ————————————————————————— Category Cut-off Tonnes Copper Copper Gold Gold Silver Silver Grade (‘000) (%) (‘000 (g/t) (‘000 (g/t) (‘000 Copper lbs) oz.) oz) (%) ————————————————————————— Measured 0.5 15,827 1.01 354,121 0.64 325 10.97 5,582 ————————————————————————— Indicated 0.5 16,463 1.20 436,367 0.44 233 16.12 8,529 ————————————————————————— Measured and 0.5 32,290 1.11 790,488 0.54 558 13.59 14,111 Indicated ————————————————————————— Inferred 0.5 10,976 1.04 251,099 0.45 94 14.09 4,971 ————————————————————————— Table 2 – Aranzazu Resource Estimate – 0.8% Cu only cut-off ————————————————————————— Category Cut-off Tonnes Copper Copper Gold Gold Silver Silver Grade (‘000) (%) (‘000 (g/t) (‘000 (g/t) (‘000 Copper lbs) oz.) oz) (%) ————————————————————————— Measured 0.8 8,338 1.36 250,215 0.82 219 14.06 3,768 ————————————————————————— Indicated 0.8 9,432 1.63 338,523 0.56 171 21.45 6,504 ————————————————————————— Measured and 0.8 17,770 1.50 588,738 0.68 390 17.98 10,272 Indicated ————————————————————————— Inferred 0.8 5,808 1.40 178,902 0.58 94 17.64 3,295 ————————————————————————— Note:
The tonnes of measured and indicated resources for the updated 0.5% Cu cut-off and the 0.8% Cu cut-off estimates have increased by 29% and 25%, respectively, as compared to the September 2010 resources estimate and based on similar average copper, gold and silver grades.
Commenting on the updated resource estimate, Mr.
Tom Ogryzlo, Interim CEO of
Quality Assurance and Quality Control (“QA/QC”) Procedures for the Aranzazu Mine
The resource estimation has been prepared by
William J. Lewis, B.Sc., P.Geo. of
The mineral resource for the Aranzazu Mine was estimated by ordinary kriging for copper, gold and silver constrained by seven 3D solid models based on a 0.30% Cu grade shell within the skarn complex. Block dimensions were 5 x 5 metres horizontal and 5 metres vertical. The deposit has been tested by 976 core holes and 234 reverse circulation holes drilled between 1960 and May 2011. Grade estimation was based on analyses of 33,703 two-metre composites from 1209 drill holes. Statistical analysis identified high-grade outlier composites and a total of 28 Cu, 36 Au and 59 Ag composites were capped. Capping reduced the total Cu metal content by approximately 2% and the total Au and Ag metal content by approximately 3%.
Exploration at the Aranzazu Mine ceased on May 12, 2011 and was conducted under the supervision of
J. Britt Reid, P.Eng., who is the Company’s qualified person as defined by National Instrument 43-101. Mr. Reid has also reviewed and approved the contents of this news release as applicable.
Diamond drilling core was logged, photographed and then split in half using a diamond core saw. Half the core has been retained off-site in a secure storage facility, and the other half was sampled, secured in sealed, labelled bags and then transported to the Stewart Mexico facility in Zacatecas, Mexico, and processed using the same preparation protocol discussed below. Assays were completed at the Eco Tech Stewart laboratory in Kamloops, B.C. The entire half-core and reverse circulation drill cuttings were crushed to 95 percent passing two millimetres, split and pulverized to 95 percent passing 150 mesh, split again, and a 150-gram sample sent for assay. Gold assays were determined by fire assay with an AA finish, over-limit assays are determined by fire assay with a gravimetric finish. Silver, copper, lead and zinc assays were determined by a four-acid digestion with an ICP-MS finish. Molybdenum assays were determined by aqua regia digestion followed by an ICP-OES finish. Silver over-limits were determined by a fire assay with a gravimetric finish. The Company systematically inserts certified standard samples, sample duplicates in a non-sequential order and blank samples in all batches of samples sent to Stewart Mexico and Eco Tech Stewart as a means of quality control. Additionally, Stewart Mexico and Eco Tech Stewart have their own stringent internal QA/QC protocols. Check samples were systematically sent to the
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This news release contains “forward-looking statements” within the meaning of the applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking statements, including any information as to the Company’s strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as “plan,” “expect”, “budget”, “target”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, but are not limited to, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices (such as gold, copper, silver, nickel and iron ore), currency exchange rates (such as the Canadian dollar, Brazilian Real, Mexican
Peso and the Honduran Lempira versus the United States dollar), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company’s corporate resources, changes in project parameters as plans continue to be refined, changes in project development and production time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, final pricing for concentrate sales, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, successful completion of proposed acquisitions, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes, as well as those risk factors discussed or referred to in the Company’s Annual Information Form, dated March 30, 2011, under the heading “Item 4.2 – Risk Factors”. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company’s expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company’s plans and objectives and may not be appropriate for other purposes. The reader is also cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. There are currently no mineral reserves on the Aranzazu Mine.
(1) The September 2010 resource estimate is contained in the technical report dated October 25, 2010, and entitled “NI 43-101 Technical Report and Resource Estimate on the Aranzazu Property, Zacatecas State, Mexico” prepared for
William J. Lewis, B.Sc., P.Geo of