Del Carmen Resource
On September 12, 2011, we announced the first National Instrument (NI) 43-101-compliant mineral resource estimate for the Rojo Grande zone at our Del Carmen project (click here to view press release). The in-pit, inferred resource is 25.4 million tonnes of oxide material grading 1.00 g/t gold and 13.3 g/t silver for 816,600 ounces of contained gold and 10.9 million ounces of contained silver, at a lower average gold equivalent cutoff grade of 0.3 g/t. Drilling in the coming field season will aim to extend and expand the deposit, which remains open to the southwest. Drilling will also target areas within the modelled pit that have not yet been tested and are currently assigned as waste.
The table below summarises the inferred in-pit mineral resource estimate:
| Million Tonnes | Gold Grade (g/t) | Silver Grade (g/t) | Gold Ounces | Silver Ounces |
|---|---|---|---|---|
| 25.4 | 1.00 | 13.3 | 816,600 | 10,853,000 |
(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.(2) The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource. It is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category (3) The 0.3 g/t gold equivalent cutoff grade was derived from an assumed open pit/heap leach operation with recoveries of 70% for gold and 40% for silver, a mining cost of US$1.50/tonne for ore and $1.40/tonne waste, process cost of US$3.50/tonne and general & administrative costs of US$2.50/tonne. The costs were derived from similar operations and the recoveries from initial metallurgical testwork. Assumed prices of $1,125/oz for gold and $20/oz for silver, based on 3-year trailing averages, were also employed.
Notes on the methodology of estimation of the inferred resource:
- The inferred resource estimate was carried out by Micon International Limited (Micon).
- The database comprised a total of 23 diamond drill holes, 4,185 metres of mainly HQ drilling (lesser amounts of PQ and NQ) and 3,446 gold and silver assays.
- An interpreted mineralised envelope was modeled into a wireframed solid in Gemcom, Approximate dimensions of the envelope were 750 metres in length (northeast-southwest), 80 to 200 metres in width (northwest-southeast), and up to 280 metres in vertical extent.
- Estimates are based on a parent cell dimension of 20 metres east, 20 metres north and 5 metres vertically.
- Grade interpolation was based on 5.0 metre composites cut to a maximum of 12.6 g/t gold and 161 g/t silver.
- Tonnage estimates are based on 71 bulk density measurements carried out by Malbex which were interpolated into the mineralized domain of the block model. Bulk density values for the Rojo Grande mineralised rock ranged from 1.68 to 2.67 tonnes/m3. The incompetent nature of certain zones of powdery quartz-alunite alteration made it difficult to obtain reliable density measurements for a small portion of the mineralized envelope. Due to this rock condition, and after a statistical analysis of the frequency of density results, a low-value outlier population was identified and all density measurements less than 2 tonnes/m3 were not used. All waste blocks and a small volume that did not get an interpolated density value were assigned the average density of 2.32 tonnes/m3.
- The resource at a 1.00 g/t gold grade was reported within a preliminary conceptual open-pit mining envelope with the purpose of delineating mineralization with a reasonable prospect of economic extraction. The Whittle open pit model was constructed using a gold price of US$1,125/oz, and heap leach gold recoveries of 70%. The resulting, unoptimized pit has a strip ratio of 2.09:1.
