TORONTO, ONTARIO–(Marketwired – June 6, 2013) –
On July 18, 2012, the Company released the results of the Preliminary Economic Assessment (“PEA”) for Aranzazu, prepared by
The Company announces the following updates to the Aranzazu mine and mill expansion:
- Basic engineering (65% completed to date) now fixes the feed rate expansion of 4,500 tpd and anticipates completion of the expansion by the second quarter of 2015. The engineering is expected to be completed in August 2013 and includes the design for an upgrade to the fresh water system, a redesign of the coarse ore stockpile feeders and a high capacity tailings thickener to improve water recovery;
- The expanded operation, with roaster capability, expected to have a remaining life of 16 years and estimated life-of-mine cash costs per payable pound of copper of $1.15 to $1.25;
- The Company expects the estimated capital requirement of $113 million (including a contingency of $12 million) is expected to be funded by a combination of internally generated cash flows and external financing and which is allocated amongst the following phases;
- $41 million for mine development, which enables access to higher grade ores and the phasing out of the open pit activities during 2014, and increases production to approximately 25 million pounds per year;
- $33 million for the roaster, which is expected to result in substantially reduced arsenic-related treatment and refining charges and penalties; and
- $39 million for plant expansion (additional mill, paste-fill plant and thickeners) which is expected to increase production to an expected 35 million pounds of copper per year;
- The roaster was selected and the purchase contract awarded in February 2013 with an estimated 46 week delivery time. The roaster is expected to be operational in the second quarter of 2014; and
- The deposit continues to remain open at depth and on strike therefore allowing potential for further future expansion.
Jim Bannantine, the Company’s President and Chief Executive Officer stated: “Since the publication of the Preliminary Economic Assessment,
The Company expects each of these project elements, individually and as a group, are expected to result in substantial reductions to the cash costs per payable pound of copper over the life of the project and therefore contribute to realizing a value of the Aranzazu asset greater than that stated in the PEA because of the increase in capacity from 4,000 to 4,500 tpd.”
Additional Project Commentary
The measured, indicated and inferred mineral resources as of September 30, 2011, and included in the PEA, have not been updated.
The underground mine has been designed to facilitate the extraction of 4,500 tpd through the application of transverse long hole open stoping, a low-cost bulk mining technique suitable for the significant mineralized mining width and strong continuity of Aranzazu resources. Paste backfill is integral to the project to maximize both resource recovery and mining productivity. Modern trackless mobile equipment will be used for the majority of mining activities.
An extensive underground development program that attains a minimum of 700 meters per month of advance is being executed to develop and maintain access to adequate resources to sustain 4,500 tpd of production. Underground project infrastructure include ventilation shafts and fans, a centralized pumping station, a modern maintenance facility, electrical substations, fueling facility and other ancillary installations.
Material handling from the underground workings to the concentrator is accomplished by a modern fleet of haulage trucks via an extensive ramp system connected to two existing surface portals. Primary crushing will continue to be performed on surface.
The Company expects the planned underground infrastructure and mining method support a potential increase in production to 4,500 tpd and the incremental investment in fixed plant and mobile equipment has been included in the capital expenditure schedule above. It is expected that the economy of scale realized by the expansion of the mine and processing plant will yield a decrease in the cash cost per payable pound of copper produced of between $0.75 and $1.00 per pound of payable copper.
The expansion of the processing plant to 4,500 tpd capacity will include an additional 13′ x 18′ primary ball mill and two 130 m3 and eight 5 m3 tank flotation cells. This will provide not only sufficient additional rougher flotation capacity but also allow for the total reconfiguration of the cleaner circuit to further optimize final concentrate quality. Additional crushing capacity will be achieved by more fully utilizing the available runtime of the existing equipment so the expansion to 4,500 tpd is capital efficient. The installation of the additional equipment can also be carried out with minimal disruption to current production.
A new tailings thickener and the paste backfill plant is also expected to improve the recovery of water from tailings. The existing tailings storage facility offers short-term capacity, while the majority of the tailings from the expanded production scenario will be stored in a new facility to be developed to the east of the current operation. It is anticipated that 40% of tailings will be delivered to the underground mine as paste backfill.
Arsenic reduction in the copper concentrate will be achieved using partial roasting technology. The roaster was selected and the contract awarded to
About the Aranzazu Mine
The Aranzazu mine is located within the Municipality of Concepción
del Oro in the north eastern region of the State of Zacatecas, Mexico, and covers approximately 11,380 hectares, including the historical, past producing El Cobre area. The property can be accessed by paved highway from both the city of Zacatecas located 250 kilometres to the southwest and from the city of Saltillo located 112 kilometres to the northeast. Both Zacatecas and Saltillo are serviced by daily domestic and international flights.
National Instrument 43-101 Compliance
Unless otherwise indicated,
The PEA was prepared under the direction of AMC by independent industry professionals, all Qualified Persons under NI 43-101. The Qualified Person for
Bruce Butcher, P. Eng., Vice President, Technical Services, who has reviewed and approved this press release. The updates in this press release do not materially change the overall results or conclusions of the PEA.
The PEA is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
This news release contains certain “forward-looking information” and “forward-looking statements”, as defined in applicable securities laws (collectively, “forward-looking statements”). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements relate to future events or future performance and reflect the Company’s current estimates, predictions, expectations or beliefs regarding future events and include, without limitation, statements with respect to: the planned Aranzazu mine and mill expansion, including the cost, timing and results thereof; projected mine performance and economics; project internal cash flows; external financing; the amount of mineral reserves and mineral resources; the amount of future production over any period; the amount of waste tonnes mined; the amount of mining and haulage costs; cash costs; operating costs; strip ratios and mining rates; expected grades and ounces of metals and minerals; expected processing recoveries; expected time frames; prices of metals and minerals; mine life; and gold hedge programs. Often, but not always, forward-looking statements may be identified by the use of words such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements in this news release are based upon, without limitation, the following estimates and assumptions: the availability of financing on acceptable terms; the presence of and continuity of metals at the Company’s Mines at modeled grades; the capacities of various machinery and equipment; the results or performance of the proposed expansion of Aranzazu, the availability of personnel, machinery and equipment at estimated prices; exchange rates; metals and minerals sales prices; appropriate discount rates; tax rates and royalty rates applicable to the mining operations; cash costs; anticipated mining losses and dilution; metals recovery rates, reasonable contingency requirements; and receipt of regulatory approvals on acceptable terms.
Known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s ability to predict or control could cause actual results to differ materially from those contained in the forward-looking statements. Specific reference is made to the PEA and the most recent Annual Information Form on file with certain Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements, which include, without limitation, gold and copper or certain other commodity price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the mineral exploration and development industry. Readers are cautioned that the foregoing list of factors is not exhaustive of the factors that may affect the forward-looking statements.
All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.