TIDMMIRL
RNS Number : 3668X
Minera IRL Limited
14 February 2012
For immediate release 14 February 2012
Minera IRL Announces Successful Feasibility for Don Nicolas
Project in Argentina
London and Toronto, 14 February 2012: Minera IRL Limited
("Minera IRL" or the "Company"), (TSX:IRL) (AIM:MIRL) (BVL:MIRL),
the Latin America gold mining company, is pleased to announce the
results of a Feasibility Study for the Don Nicolas Project located
in mining friendly Santa Cruz Province, Argentina. The Don Nicolas
Project is 100% owned by Minera IRL Patagonia SA, a subsidiary of
Minera IRL Limited. The study was managed by international
engineering firm Wardrop, a Tetra Tech Company (Tetra Tech).
Highlights:
-- Don Nicolas Project on track to become Minera IRL's second
producing mine with commercial gold and silver production targeted
to commence in Q4 2013
-- Based on a gold price of US$1,250 per ounce, NPV @ 5% real of
US$44.7 million (pre-tax) and US$25.1 million (post tax); and IRR
of 34.6% (pre tax) and 22.8% (post tax)
-- At a higher gold price of US$1,500 per ounce, NPV @ 5% real
of US$82.2 million (pre-tax) and US$48.0 million (post tax); and
IRR of 56.3% (pre-tax) and 38.1% (post tax)
-- Ore treatment at a rate of 350,000 tonnes per annum to
produce a steady-state average of 52,400 ounces of gold and 56,000
ounces of silver per year over an initial mine life of 3.6
years
-- Life-of-mine cash operating cost, after silver credit, of US$528 per ounce gold
-- Excellent brownfields exploration potential; 12,000 meters of
RC drilling at Martinetas is scheduled to commence in March and is
expected to add significantly to the mine life
-- Study to increase production by heap leach treatment of low
grade resources due for completion during second half 2012
"The results of the Don Nicolas Feasibility Study confirm that
Minera IRL can now proceed with the permitting and development of a
new, highly profitable gold mine to complement the Corihuarmi Gold
Mine in Peru." said Courtney Chamberlain, Executive Chairman of
Minera IRL. "We are very confident that the initial operation is
only the starting point at Don Nicolas considering the upside
potential in a number of areas. We have already defined a
substantial low grade resource that may be amenable to future heap
leach treatment. A 12,000 meter RC drilling campaign at Martinetas,
scheduled to begin in March, is expected to add significantly to
our resource base. There is potential for a longer term underground
operation at the Sulfuro deposit and, finally, we believe that
there is excellent discovery potential from our regional
exploration program."
International engineering firm Tetra Tech has managed the Don
Nicolas Feasibility Study. Coffey Mining Pty Ltd compiled the
resource estimate.
The project is based on a Canadian National Instrument 43-101
compliant "High Grade" (above a 1.6g/t gold cut-off) Measured and
Indicated Resource totalling 1.5 million tonnes, grading 6.0g/t
gold and 13g/t silver containing 278,000 ounces gold and 639,000
ounces silver. Mine design and production scheduling on this
resource has resulted in Proven and Probable Mineral Reserves of
1.2 million tonnes grading 5.1g/t gold and 10g/t silver containing
197,000 ounces gold and 401,100 ounces silver (contained within the
reported Measured and Indicated Resource).
An all open pit mining scenario has been adopted with ore
production from two districts, Martinetas and La Paloma (location
of the Sulfuro Vein), located approximately 50 kilometres apart.
The conventional crush, grind and carbon-in-leach (CIL) treatment
plant at Martinetas will have a rate of 350,000 tonnes per annum
providing a mine life of 3.6 years. Average annual steady-state
gold and silver production will be 52,400 ounces and 56,000 ounces
respectively at a cash operating cost of US$528 per ounce after
silver credits. From the reserves outlined to date, peak production
is scheduled to occur in Year 2 of operation at 63,800 ounces of
gold and 92,200 ounces of silver. Logistics are excellent, with
close proximity to a major highway. An adequate supply of ground
water has been defined.
Key performance and economic indicators are shown in following
table.
Parameter Units Key Performance Indicator
Mine life Years 3.6
------- --------------------------------
Tonnes Mt 1.2
------- --------------------------------
Grade - gold g/t 5.1
------- --------------------------------
Grade - silver g/t 10
------- --------------------------------
Gold Metallurgical extraction % 92.1%
------- --------------------------------
Silver Metallurgical extraction % 47.4%
------- --------------------------------
Gold produced koz 181.0
------- --------------------------------
Silver produced koz 190.2
------- --------------------------------
Pre-production capital cost $M 55.5
------- --------------------------------
Sustaining capital cost $M 7.3
------- --------------------------------
Life-of-Mine site cash operating
cost $/t 82.5
------- --------------------------------
Life-of-Mine total cash operating
cost (after silver credit)
excluding royalties $/oz 528
------- --------------------------------
Base Case Upside
Gold price $/oz $1,250 $1,500
------- ---------------- --------------
Pre Post Pre Post
Tax Tax Tax Tax
------- ------- ------- ------ ------
Project cash flow $M 58.7 36.1 101.6 62.2
------- ------- ------- ------ ------
NPV at 5% real $M 44.7 25.1 82.2 48.0
------- ------- ------- ------ ------
NPV at 7% real $M 39.9 21.6 75.6 43.7
------- ------- ------- ------ ------
NPV at 8% real $M 37.6 19.8 72.4 41.4
------- ------- ------- ------ ------
IRR (real) % 34.6% 22.8% 56.3% 38.1%
------- ------- ------- ------ ------
Payback period Years 1.8 2.0 1.5 1.7
------- ------- ------- ------ ------
Note:
1. $ represents US dollars
2. Costs are in 4Q 2011$
3. Silver price of $25/oz assumed
4. NPV as at commencement of construction
5. Initial Capital Cost excludes IGV (general sales
tax), which is recovered once in production
6. Pre- tax is before other taxes (5% export duty and
0.6% debit & 0.6% credit tax) and Corporate Income Tax
of 35%
7. Post-tax includes tax deduction for prior expenditure
and a deduction for allowable prior tax losses
The Canadian National Instrument 43-101 documentation is
expected to be filed on SEDAR by 16 February 2012.
The Environmental Impact Assessment (EIA) is well advanced and
environmental consultant Ausenco Vector is working toward
completing this. The ensuing permitting process is expected to be
completed during the second half of 2012 and development is
expected to take approximately 12 months with target production in
Q4 2013.
The Company believes that there is significant opportunity for
enhancement of the Don Nicolas Project in the future including the
following:
-- The low grade resource in the Indicated category totals 4.2
million tonnes grading 0.8g/t gold and 4g/t silver for a total of
102,000 ounces of gold and 516,000 ounces of silver. Studies are
underway to test the application of heap leaching to treat this
resource and due for completion during the second half 2012. During
the mining operation outlined in the feasibility study, 2.1 million
tonnes of low grade material, included in the above resource,
grading 0.7g/t gold and 3g/t silver containing 49,000 ounce of gold
and 215,000 ounces of silver will be stockpiled. This can be
readily reclaimed if heap leaching proves practical;
-- Potential exists for a future underground mine at La Paloma
where resource already exists in the open ended high grade shoot
which extends below the Sulfuro open pit;
-- The 7,000 meter RC in-fill and extension drilling program
completed during 2011 at Martinetas was highly successful. A
further 12,000 meter RC program is scheduled to commence in early
March at Martinetas. The Company believes that this program will
add significantly to the resource base which, if achieved, will
extend the mine life;
-- Potential to outline high grade gold and silver resources
which may be defined from exploration prospects within trucking
distance and treated at the Martinetas plant. Examples of planned
follow-up exploration include reported intersections of 0.7m
grading 136g/t gold and 157g/t silver and 4.2m grading 1.63g/t gold
and 663g/t silver that have already been reported in separate
systems at the Escondido discovery, approximately 35 kilometres
from Martinetas; and
-- Further work underway to investigate the potential to further
reduce operating cost such as the possible provision of low cost
grid power.
More Company information is available on the Company's website
www.minera-irl.com and from SEDAR.
For more information please contact:
Minera IRL
Trish Kent, Vice President, Corporate Relations + 511 4181230
Collins Stewart (Nominated Adviser & Broker,
London)
John Prior + 44 (0)20 7523
Adam Miller 8350
finnCap (Co-broker, London)
Geoff Nash (Corporate Finance)
Matthew Robinson (Corporate Finance) + 44 (0)20 7600
Joanna Weaving (Corporate Broking) 1658
RBC Europe Ltd (Co-broker, London)
Stephen Foss
Martin Eales +44 (0)20 7653 4000
Buchanan (Financial PR, London)
Bobby Morse
James Strong +44 (0)20 7466 5000
Minera IRL Limited is the AIM traded, TSX and BVL listed holding
company of precious metals mining and exploration companies focused
in Latin America. Minera IRL is led by an experienced senior
management team with extensive industry experience, particularly in
operating in South America. The Group operates the Corihuarmi Gold
Mine and the advanced gold projects Ollachea in Peru and Don
Nicolas in Argentina. For more information, please visit
www.minera-irl.com
The Toronto Stock Exchange neither approves nor disapproves the
information contained in this News Release.
Some of the statements contained in this release are
forward-looking statements, such as estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Since forward-looking statements
address future events and conditions, by their very nature, they
involve inherent risks and uncertainties.
While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future
performance suggestions herein. Except as required by applicable
law or regulation, Minera IRL Limited does not intend to update any
forward-looking statements to conform these statements to actual
results.
Competent Persons Statement
Minera IRL Limited expects to file a NI 43-101 compliant technical
report by 16 February 2012 on the Don Nicolas Project outlining
the Mineral Resource and Reserves Estimate and the result of
a Feasibility Study. The report will be available on www.sedar.com.
The NI 43-101 technical report will be authored by Callum Grant,
P.Eng., Hassan Ghaffari, P.Eng., Andre DeRuijter, P.Eng., and
Steven Osterberg, P.Geo. (USA), of Wardrop, a Tetra Tech Company;
Doug Corley, P. Geo. (Australia) of Coffey Mining Pty Ltd;
Carlos Guzman, Mining Engineer (Chile) of NCL Ingenieria y
Construccion Ltda;, Alistair Cadden, C.Eng. (UK) of Golder
Associates Argentina SA and Anthony Sanford, Pr. Sci. Nat.
of Ausenco Vector. These independent Qualified Persons have
verified the data in this news release.
The preparation of the technical information contained herein
was supervised by Courtney Chamberlain, Executive Chairman,
BSc and MSc Metallurgical Engineering, a Fellow of the Australian
Institute of Mining and Metallurgy (AUSIMM), who is recognized
as a Qualified Person for the purposes of National Instrument
43-101, and who has reviewed and approved the technical information
in this press release. Also by Donald McIver, VP Exploration
of the Company, MSc Exploration and Economic Geology, a Fellow
of the Australian Institute of Mining and Metallurgy (AUSIMM),
who is recognized as a Qualified Person for the purposes of
National Instrument 43-101, and who has reviewed and approved
the resource information in this press release.
Quality Assurance and Quality Control Procedures Disclosure
The Company has implemented and maintains a Minera IRL quality
assurance/quality control (QA/QC) protocol on its projects
to ensure best industry practice in sampling and analysis of
exploration and resource definition samples. The insertion
of field duplicates, certified standards and blank samples
into the sample stream form part of the MIRL procedure (these
act as an independent check on contamination, precision and
accuracy in the analytical laboratory).
Assay results are reported once rigorous QAQC procedures have
been approved.
Independent Audit Programs
Towards maintaining compliancy with international standards
as they pertain to the minerals industry resource evaluation
and estimation procedure, MIRL regularly contracts the services
of industry experts to conduct detailed audits of established
QAQC procedures.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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