VANCOUVER, Oct. 3 /PRNewswire-FirstCall/ -- Oremex Resources Inc. (TSX-V: ORM) (the "Company") is pleased to announce positive results from an independent Preliminary Assessment Study conducted by Snowden Mining Industry Consultants Inc. ("Snowden") on the Company's Tejamen silver property in Mexico. Snowden is an internationally recognized independent consulting company that has completed a large number of assessments for the mining industry.
In order to complete the Preliminary Assessment on Tejamen, Snowden utilized the results of an independent resource study by Wardrop Engineering (NI 43-101 compliant as reported in April 11, 2006 news release). That study concluded that the Tejamen property contains a silver-equivalent Inferred resource of 50.8 million ounces (69.8 grams per tonne of silver equivalent in 22.6 million tonnes). The base case mining scenario developed by Snowden utilizes an optimized pit shell containing 21.7 million tonnes grading 51.9 grams per tonne silver and 0.023 grams per tonne gold.
The following table illustrates the impact of the silver price on the estimated Net Present Value (NPV) of the project, before taxes. A 7% discount rate has been applied.
NPV Sensitivity to Metal Value
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Ag Value NPV
$US/oz (US$million)
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8 19.2
10 58.6
12 97.4
15 155.5
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Based on the cost and productivity assumptions provided in the Preliminary Assessment Study, Snowden concludes that a 10,000 tonne per day (3.65 million tonnes per year) surface mining project and heap leach processing system can generate a profitable operation when silver prices average US$8 per ounce (approximately US$0.26 per gram) and process recoveries for silver average 65 percent or greater over the life of mine. Preliminary metallurgical testwork to date has indicated recoveries of 70 percent for silver.
At a silver price of US$10 per ounce, silver recovery of 70 percent, initial capital investment of US$45.2 million, sustaining capital of $8.6 million (including a contingency of 15%), and life-of-mine average cash operating costs of US$5.72 per tonne (including a contingency of 20%) the Net Present Value is estimated to be US$58.6 million (before taxes). The foregoing is based on a mine life of approximately seven years, one year of pre-stripping and heap construction, and an average stripping ratio of approximately 2:1. At a silver price of US$12 the project has a Net Present Value of US$97.4 million. The Snowden technical report will be filed on SEDAR.
"This is very good news for Oremex shareholders and enhances shareholder value," said Linda Thorstad, CEO. "The preliminary assessment study demonstrates that the Tejamen silver project may be economically viable at silver prices as low as US$8 per ounce with recoveries that are consistent with those of preliminary metallurgical test work. The study also provides recommendations for future development of the project."
It should be emphasized that the Preliminary Assessment is based on information generated prior to the recent diamond drilling program, and does not consider the exploration potential of the Tejamen property, which is open in several directions and at depth. A 12,500-metre reverse circulation program is planned to test the lateral and vertical limits of mineralization and to provide in-fill data to transfer the resources to a higher category. The in-house qualified person responsible for the projects is Linda Thorstad, P.Geo., Chief Executive Officer.
In addition to its Tejamen silver property, the Company holds the San Lucas Property, where a 19-hole (3,042 metre) drill program outlined a silver-gold mineralized system with lead and zinc in volcanic rocks. Highlights include 9.26 grams per tonne gold and 233 grams per tonne silver over 4 metres in Hole #3 and 6 metres of 203 grams per tonne silver in Hole #4. Surface mapping and sampling have traced the zone for a two kilometre strike length. The Company also holds four other properties in Mexico.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy and accuracy of this release.
National Instrument 43-101 requires the following statement: that the preliminary assessment is preliminary in nature, that 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, and there is no certainty that the preliminary assessment will be realized.
Forward Looking Statements: The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. Forward-looking statements in this release include statements regarding future exploration programs, operation plans, geological interpretations, mineral tenure issues and mineral recovery processes. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.
CONTACT: Linda Thorstad, M.Sc., P.Geo., Chief Executive Officer, T: (604) 683-5651, E:
