TORONTO, June 9 /PRNewswire-FirstCall/ -- Inmet Mining Corporation (IMN-TSX) today announced an update with respect to the mid-May suspension of the authorization for the Las Cruces dewatering and re-injection system (DRS) by the Confederacion Hidrografica del Guadalquivir (CHG).
Background of the DRS System
The DRS is a system of 69 water wells located in the proximity of the Las Cruces open pit that extracts water from the surrounding aquifer and re-injects it into the same aquifer through adjacent wells to prevent water from flowing into the pit.
The DRS was designed as part of the open pit mining concept and was permitted by CHG in October 2003 after a two-year review. The purpose of the DRS is to ensure that the regional aquifer is not affected by the operation of the mine. The aquifer is a formation of sand that lies approximately 150 metres below the surface and allows groundwater to accumulate. Under the conditions of the DRS authorization, Las Cruces is permitted to extract a small amount of water from the aquifer. The majority of process water required by Las Cruces will be recycled from the Seville sewage treatment facility.
CHG Suspension Resolution and Inmet's Response
Since the suspension of the DRS authorization, Las Cruces has stopped all mining in the area of the ore deposit. However, some mining of overburden material for future pit expansions has continued. Construction of the process plant has not been affected by the suspension of the DRS authorization. Las Cruces has also continued to operate elements of the DRS to ensure the environmental protection of the aquifer and the integrity of the open pit. Water that is accumulating in the bottom of the pit is being pumped into lined storage ponds as an interim measure.
To address CHG's concerns that led to the suspension of the DRS authorization, Las Cruces has developed a plan that contains two proposed primary actions. The first proposed action involves purification of water extracted from the aquifer through a highly efficient reverse osmosis water treatment process prior to reinjection into the aquifer. Such purification would provide a safeguard should water become impacted in the future. To accelerate the implementation of water purification, Las Cruces has sourced two reverse osmosis treatment units from a US supplier that can purify up to half of the quantity of water extracted from the aquifer. Las Cruces' objective is to be in a position to commence water purification on an interim basis by the end of August. The second proposed action is the relocation of certain DRS extraction wells currently located above the mineralized zone to locations outside of the mineralized zone. We expect the cost of implementing both actions to be approximately US$15 million.
Las Cruces has already outlined its proposed actions in a letter to CHG and will submit the technical aspects of its plan to CHG by June 13, 2008. Although Las Cruces has and will continue to dedicate all its efforts towards satisfying CHG's concerns, it is possible that the suspension period may continue past Las Cruces' expected start of cathode production, which we have anticipated would be in the fourth quarter of this year. In that case, start-up of operations at the Las Cruces process plant and resumption of mining activity in the pit, including the mining of ore for the process plant, would be delayed until the DRS authorization is reinstated.
Conference Call and Webcast
On Tuesday, June 10, 2008 at 8:30 Eastern Time, Inmet will hold a live conference call and webcast with slide presentation regarding this Las Cruces project update. The call will be hosted by Richard Ross, Chairman and Chief Executive Officer and Jochen Tilk, President and Chief Operating Officer.
You are cordially invited to listen to the audio webcast through either:
http://w.on24.com/r.htm?e=111731&s=1&k=1D17610470C2E987100F5E5B9BF97316 or http://www.inmetmining.com/. After the broadcast, an archive of the webcast will be available on both websites.
Interested persons who are unable to connect to the webcast can listen to the conference call by dialing +1 416-644-3417 (local/international) or toll-free +1 800-732-9307 (North America only).
Forward looking information
Securities regulators encourage companies to disclose forward-looking information to help investors understand a company's future prospects. This press release contains forward-looking information. These are "forward-looking" because we have used what we know and expect today to make a statement about the future. Forward-looking statements usually include words such as may, expect, anticipate, and believe or other similar words. Capital and operating cost estimates are forward-looking statements, and are based on assumptions that we believe to be reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our respective business or events that happen after the date of this press release. You should not place undue reliance on forward-looking statements.
About Inmet
Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We have interests in four mining operations in locations around the world: Cayeli, Pyhasalmi, Troilus and Ok Tedi. We also have interests in three development properties, Las Cruces, Cerattepe and Petaquilla.
This press release is also available at http://www.inmetmining.com/.
