Arenal Deeps Prefeasibility Results
Uruguay Mineral Exploration Inc
SYMBOLS: UME (TSXV), UGY (AIM)
Uruguay Mineral Exploration Inc. Announces Positive Prefeasibility
Study Results for Arenal Deeps underground mining
Uruguay Mineral Exploration Inc. (“UME” or the “Company”), the
South America focused gold production and exploration company, announces
today results from the prefeasibility study (“PFS”) of underground
mining at the Arenal Deeps deposit at its San Gregorio operation. The
independent PFS was undertaken by Golder Associates S.A. (“Golder”) of
Santiago, Chile and was based only on drill results up to April 7, 2009.
The base case financial results of the PFS are:
|
Gold Price
|
|
$US 740 per ounce
|
|
Total capital
|
|
$US 5.8 million
|
|
NPV at 10%
|
|
$US 7.7 million
|
|
IRR
|
|
41%
|
David Fowler, CEO of UME, commented, “The Arenal Deeps prefeasibility
study was based on data available as at April 7,
2009, and it excludes the holes drilled since then as well as taking a
cautious view of some potential benefits that should be realized. Even
so the technical and financial results of the prefeasibility study are
very positive. They provide confidence that the mine life at San
Gregorio will be extended and reinforce the potential for
further underground discovery in the rest of the San Gregorio district.
The infill drilling programme will continue through to January 2010, and
UME believes that when all the drilling and the final feasibility study
have been completed the grade of the Arenal Deeps resource will improve
and the NPV of the project will show benefits considerably better than
have been calculated to date. Results of the last four drill holes have
been separately announced today.”
The PFS is assumed to have a level of confidence of +/- 25% and includes
the following assumptions:
-
Gold price US$ 740 /oz per ounce
-
Underground mine operating costs of $US 18 per tonne have been
developed from existing consumable and personnel costs. The mining
method selected for this study was sublevel open stoping.
-
Existing site costs have been used for Processing, G&A, Transport and
Refining, Royalties and Taxes for the PFS averages.
-
Average cost per ounce for the life of mine was $US 570.
The results of the PFS do not take account of:
-
Any drill results obtained since April 7, 2009. The PFS was based upon
the geological resource for Arenal Deeps as estimated by Golder and
disclosed by UME on April 7, 2009. The resource model used to
calculate this reserve has NOT been updated for drill holes ALDD103 to
ALDD111 disclosed in press releases dated July 8, 2009 and August 4,
2009;
-
Mining from resources outside of the floating stope envelope, by Cut
and Fill methods. A mine plan that incorporates a mixture of sublevel
open stoping mining and Cut and Fill methods would maximize reserves;
-
Mining a number of small isolated mineralized bodies, for example the
mineralization directly below the open pit. Mining of these bodies
will be reviewed as part of the feasibility study, with potential to
increase reserves;
-
The benefits of any silver that will be recovered during the process;
and
-
Carry forward tax losses that are expected to be available.
Reserves used for the PFS estimated using open stope design, diluted and
mine recovered are as follows:
|
Reserve Category
|
|
Tonnes
|
|
Au Grade (g/t)
|
|
Contained Au Oz
|
|
Proven
|
|
140,278
|
|
1.86
|
|
8,389
|
|
Probable
|
|
1,576,184
|
|
1.95
|
|
98,817
|
|
Proven + Probable
|
|
1,716,462
|
|
1.94
|
|
107,206
|
Preliminary geomechanical and hydrogeological test work was used to
determine appropriate underground mining methods and dewatering
requirements. No additional requirement for the existing processing
facilities was investigated and the metallurgical response was assumed
to be identical to that of the Arenal ore body processed from the
exhausted open pit.
The table below outlines the sensitivity of PFS economics to various
price scenarios:
|
Gold Price (US$)
|
|
NPV at 10% (US$M)
|
|
IRR (%)
|
|
592
|
|
-0.3
|
|
8.8
|
|
666
|
|
3.9
|
|
26.9
|
|
740
|
|
7.7
|
|
41.3
|
|
814
|
|
11.8
|
|
57.4
|
|
888
|
|
15.7
|
|
71.7
|
Application of the PFS development schedule to the current status of the
project results in the following timeline:
|
Activity
|
|
Timing
|
|
Definition drilling
|
|
July 2009 to January 2010
|
|
Resource modeling
|
|
February 2010
|
|
Bankable Feasibility Study
|
|
June 2010
|
|
Commence Development
|
|
July 2010
|
|
Open Stope production starts
|
|
February 2011
|
|
Open Stope in full production
|
|
May 2012
|
Opportunities to accelerate the development timetable are being
considered as part of feasibility work.
Qualified Person's Statement
The technical information presented in this press release has been
reviewed and verified by Mr. John Sadek, Vice President Operations and a
Mining Engineer, Dr. Marcelo Godoy, PhD,MSc,BSc, Principal Mining
Engineer of Golder Associates S.A and Juan Pablo Gonzalez, MBA, BSc,
Senior Mining Engineer and Associate of Golder Associates S.A
Mr. Sadek has a Bachelor of Engineering (Mining) from the University of
Sydney and is a member of the AusIMM and SME. He has over 20 years of
international experience in mining. Mr Sadek was the qualified Person
for the purposes of the AIM Guidance Note on Mining, Oil and Gas
Companies dated March 2006.
Dr. Marcelo Godoy, PhD,MSc,BSc, Principal Mining Engineer of Golder
Associates S.A., member of the AusIMM and SME with 14 years
international experience in the mining industry. Dr. Godoy was the
qualified person that has supervised the preparation of this
Pre-feasibility Study.
Juan Pablo Gonzalez, MBA, BSc, Senior Mining Engineer and Associate of
Golder Associates S.A. member of the AusIMM and IIMCH with 17 years
international experience in the mining industry. Mr. Juan Pablo was the
qualified person responsible for the underground reserve estimate.
Forward Looking Statements
All statements, other than statements of historical fact, contained or
incorporated by reference in this news release, including any
information as to the future financial or operating performance of the
Company, constitute “forward-looking statements” within the meaning of
certain securities laws, including the “safe harbour” provisions of the
Securities Act (Ontario) and the United States Private Securities
Litigation Reform Act of 1995 and are based on expectations estimates
and projections as of the date of this news release. There can be no
assurance that such statements will prove to be accurate, such
statements are subject to significant risks and uncertainties, and
actual results and future events could differ materially from those
anticipated in such statements. Forward-looking statements include,
without limitation success of exploration activities; permitting time
lines; the failure of plant; equipment or processes to operate as
anticipated; accidents; labour disputes; requirements for additional
capital title disputes or claims and limitations on insurance coverage.
The Company disclaims any intention or obligation to update or revise
any forward looking statements whether as a result of new information,
future events and such forward-looking statements, except to the extent
required by applicable law.
ENDS
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Editors’ note: Uruguay Mineral Exploration Inc. is a gold producer and
exploration company focused on identifying and developing mineral
opportunities in Latin America. UME is a fully integrated mining
company, possessing the skills necessary to explore and develop its
discoveries. The Company operates the only producing gold mine in
Uruguay (San Gregorio), and is also the leading mineral exploration
company in Uruguay having assembled an exploration portfolio based on
gold, base metals and diamond prospects.
Uruguay Mineral Exploration Inc. is quoted in Canada (TSXV) and London
(AIM) and Matrix Corporate Capital LLP is its Nominated Adviser and
Broker.
For further information, please contact:
Uruguay Mineral Exploration Inc
Tony Shearer, Chairman: +44
20 7602-1570; Tony Shearer, Chairman: +44
20 7602-1570; tonyshearer@btinternet.com
David
Fowler, CEO: 598 2 6016354; David
Fowler, CEO: 598 2 6016354; urumin@ume.com.uy
Matrix Corporate Capital LLP
Louis Castro, +44 (0) 203 206
7209Louis Castro, +44 (0) 203 206
7209
Tim Graham, +44 (0) 203 206 7206Tim Graham, +44 (0) 203 206 7206
Investor Relations in North America
Susan Borinelli,
Breakstone Group: +1 646-330-5907; Susan Borinelli,
Breakstone Group: +1 646-330-5907; sborinelli@breakstone-group.com
