Apogee Silver's Pulacayo Project Demonstrates Positive Feasibility Study Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 01/17/13 -- Apogee Silver Ltd. ("Apogee" or the "Company") (TSX VENTURE: APE) has received the results of a positive Feasibility Study to develop the Pulacayo silver-lead-zinc deposit located at its 100% controlled Pulacayo property in southwestern Bolivia.
Highlights of the Feasibility Study (FS) (1,2,3):
The Feasibility Study confirms the technical and financial viability of a silver-lead-zinc mine and base metals concentrator at Pulacayo that will form a platform from which full-scale development of the Pulacayo-Paca resource can take place. The mining scenario presented in the FS considers only 39% of the silver ounces estimated in the Pulacayo Mineral Resource summary (see Table 4 below). It also excludes the prospective Paca project adjacent to the Pulacayo property (see the Company's press release dated Feb 19, 2007). The highlights of the Feasibility Study are summarized in Table 1.
CEO Neil T. Ringdahl stated, "We are delighted with this result for a resource that still shows so much exploration potential. Although the existing mineral resources at Pulacayo could support a significantly higher production profile, it is the Company's preference at this time to build a robust underground operation with a conservative footprint and reduced capital cost. In this way, technical execution risk is reduced while allowing subsequent growth to take place at a pace that respects the needs and concerns of local communities - something we take very seriously. The initial mining scenario forms the foundation for future production growth and could provide the Company with the opportunity to fund future expansion from internally generated cash flow."
Additional Technical Information Related to the Feasibility Study
Financial Analysis
Projected prices(3) of $28.00 per ounce of silver, $0.89 per pound of lead and $1.00 per pound for zinc were used as the base case in the Feasibility Study. The silver price projection is based on a three-year trailing average at Nov 30, 2012, while the base metal price projections are based on independent market analysis. The financial analysis for the base case indicates a project with an expected pre-tax IRR of 47.1% and projected to generate $25.7 million of average annual after-tax cash flow for the first 6 years of production with a payback period of 3.9 years. Annual after-tax cash flow while in operation is expected to be $18.8 million. The project is sensitive to silver price, as set out in Table 2, still positive at a US$20/oz, and increasingly attractive at higher (current market) silver prices. The project is less sensitive to operational and capital costs (Table 3).
Project Location & Infrastructure
The Pulacayo-Paca property currently comprises approximately 22,828 hectares of contiguous mining concessions centered on the historic Pulacayo mine and town site. The property is located in southwest Bolivia, approximately 460 km from the capital city of La Paz, 130 km southwest of the town of Potosi and 18 km east of the city of Uyuni (Figure 1). It is accessible by good roads from La Paz which are now paved to the town of Uyuni and Pulacayo. Uyuni has railway connections with Argentina and Chile. The Pulacayo Mine is supplied by a 44kV power line that is shared by the Pulacayo town which will be upgraded for the project. Project designs are also sensitive to the protection of potable water. This is currently fed via a twelve kilometer pipeline from a reservoir that collects water from a historical drainage tunnel as well as surface runoff from precipitation.
Geology
The Pulacayo Deposit supported the second largest silver mine in the history of Bolivia, with over 600 million reported ounces of past silver production. The deposit is associated with a low sulphidation epithermal system that hosts both precious and base metal mineralization within Tertiary sediments of the Quenhua Formation and intruding andesitic volcanic rocks of the Rotchild and Megacristal units. Of the 1,000 m vertical extent of sulphide mineralization, the top 450 m section is hosted within the intruding volcanic unit and the bottom 550 m is hosted in the underlying sedimentary unit. Mineralization hosted by volcanic rocks occurs over tens of meters in thickness as a stockwork of narrow veins and veinlets accompanied by disseminations in associated argillicly-altered marginal areas. The intruded sedimentary rocks host spatially constrained, bonanza style, high-grade veins that locally measure up to several meters in width. These typically bifurcate into the wider stockwork and disseminated zones that characterize the overlying volcanic sequence. Veins are commonly banded in texture and can contain semi-massive to massive sulphides, with the primary minerals of economic importance being galena, sphalerite, tetrahedrite and other silver sulfosalts. In combination, these comprise the Tajo Vein System that constitutes the main Pulacayo deposit that is the subject of this Feasibility Study.
Mineral Resources & Reserves
Mineral resources (Table 4) were reported by Michael Cullen (P.Geo) of Mercator Geological Services Limited and Eugene Puritch (P.Eng.) of P&E Mining Consultants Inc. at an effective date of September 28th, 2012. Mineral reserves based on the September 28th, 2012 resource estimate were reported by Professor Jim Porter of TWP at an effective date of December 11, 2012 (Table 5). Please refer to the Company's press releases dated September 28th, 2012 and November 14, 2012 regarding disclosure of the resource estimate and associated technical report.
The resource estimate is based on validated results of 69,739 meters of diamond drilling and 606.34 meters of surface trenching carried out by Apogee Silver through various programs between 2006 and 2012. This includes 226 surface drill holes, 42 underground drill holes and 6 surface trenches.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The probable mineral reserve which constitutes 57% of the Underground Indicated Mineral Resource and 21% of the estimated Total Indicated Mineral resource, is set out in Table 5 below.
Mining
The mining strategy adopted for the Pulacayo deposit has accommodated the complexity of the stockwork of veins, the exceptionally weak geotechnical condition of the ore and the existence of some 100 years of planned and unplanned mining activities. Considerable execution risk has been mitigated through the adoption of a highly selective mining method. Furthermore, a conservative approach to the production build up that considers stope redundancy necessitated by the potential intersection of unplanned voids during stope development was considered. Together with the risk assessment, the strategy optimises capital investment in proportion to the mining production plan.
The mining method employed is predominantly mechanised, underhand cut and fill mining using longhole drilling and a cemented paste backfill. Limited conventional shrinkage stoping is also employed on the top level. Access is by means of spiral ramp systems from surface together with the existing underground infrastructure.
Processing and metallurgy
The design of the concentrator plant is modular (500 t/d each, 2 modules), each circuit is conventional with a single ball grinding mill and a differential lead and zinc flotation circuit, followed by concentrate pressure filtration to produce final lead and zinc concentrates. The results of the locked cycle tests were used to create a grade-recovery prediction model, which was applied to the range of feed grades over the life of mine. The average life of mine feed grades and their predicted recoveries are shown in Table 6 below. Further testing to improve silver recoveries will be conducted.
Extensive sampling and metallurgical test work was undertaken on the deposit to define the most suitable base metals recovery technology into which the silver reports. Bench batch scale, open circuit and locked cycle, flotation test results indicate that a conventional differential flotation process provides the best performance for recovery and grade. Locked cycle tests were performed under the proven differential flotation flowsheet by Maelgyn Minerals Services Africa, an accredited laboratory. The results were used as the metallurgical input data for the economic evaluation conducted on the project. Four metallurgical programs have been completed. Additional testing was carried out to establish the concentrates filtration rate, tailings settling characteristics and cemented paste backfill preparation technologies.
Next Steps
The completion of the Feasibility Study marks an important milestone in the development of the Pulacayo-Paca Project. The next important step for the Company will be the completion and submission of the Environmental Impact Assessment (ESIA) Report as part of the Project's permitting process. The submission of this report to the Bolivian Ministry of Mother Earth is expected before the end of first quarter 2013. With the completion of the Feasibility Study, the Company will now progress financing discussions both in Bolivia and abroad.
The Company expects to file the full NI 43-101 compliant technical report (Feasibility Study report) on the SEDAR profile of the Company at in respect of the Pulacayo Deposit within 45 days of this press release. A corresponding press release will be issued when that filing has been made.
Notes to this press release
Qualified Persons
This independent Feasibility Study was prepared by TWP Sudamerica under the supervision of Professor Jim Porter a Fellow of the Southern African Institute of Mining and Metallurgy and Director of the Centre for Mechanised Mining Systems at the University of the Witwatersrand, and Graeme Farr, an independent qualified Process Engineer with 37 years experience in Mineral Processing, a Fellow of the South African Institute of Mining and Metallurgy and Senior Process Consultant for TWP Projects. The technical and scientific information in this press release has been reviewed and approved by Professor Jim Porter, Graeme Farr, Michael Cullen (P.Geo) and Eugene Puritch (P.Eng.), each of whom is independent of the Company and each of whom is a Qualified Person under NI 43-101.
About Apogee Silver Ltd
Apogee Silver Ltd. is a mineral exploration and development stage company listed on the TSX Venture Exchange under the symbol APE. Apogee targets advanced silver-zinc-lead projects in South America that demonstrate potential to be developed to production. Currently its projects are located in the historic silver producing regions of southwest Bolivia and northern Chile. There are currently 301,066,809 common shares of Apogee issued and outstanding.
Apogee's most advanced project is the 100% controlled Pulacayo-Paca project in Bolivia. This project includes the property that covered the second-largest silver mine in the history of Bolivia with a historical estimate of over 600 million ounces of past production.
About TWP Sudamerica
TWP Sudamerica S.A. based in Lima, Peru is a wholly-owned subsidiary of TWP Projects and the Basil Read Group, which is a capable international resource and infrastructure focused engineering project house with 30 years of experience. It provides a full range of engineering, architectural, finance and project management solutions. The TWP group employs in excess of 1,400 multi-disciplinary professionals and administrative personnel around the world. The company has a project portfolio with a capital value of more than US$15-billion and has offices in South Africa, Australia, Mozambique, Namibia, Peru and Chile. TWP Sudamerica's Peru office employs more than 150 professionals and is completing work in Chile, Colombia, Bolivia and Peru and Canada.
TWP Weblink:
Cautionary Note Regarding Forward-Looking Information:
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements, projections and estimates with respect to results of the feasibility study and the mineral reserve and resource estimate, the potential effect of the metallurgical results, the impact and anticipated timing of future metallurgical results, potential effect of the toll milling and trial mining process and impact upon the future development of the property, the future financial or operating performance of the Company, its subsidiaries and its projects, the development of and the anticipated timing with respect to the Pulacayo-Paca project, the ability to obtain financing; and the impact of concerns relating to permitting, regulation, governmental and local community relations. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Estimates underlying the results of the feasibility study arise from engineering, geological and costing work of TWP Sudamerica, Mercator Geological Services, P&E Mining Consultants and the Company. See the technical report relating to the feasibility study for a description of all relevant estimates, assumptions and parameters. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
To view Figure 1, please visit the following link: .
Contacts:
Apogee Silver Ltd.
Marilia Bento
Vice President Corporate Development
+1 (416) 309-2694
Apogee Silver Ltd.
Neil T. Ringdahl
Chief Executive Officer
+1 (647) 339-4484
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Datum: 17.01.2013 - 13:00 Uhr
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