Preliminary Economic Assessment projects IRR of 23.2% over 12-year mine
TORONTO, Dec. 20 /CNW/ - Aldridge Minerals ("Aldridge" or "the Company") today announced positive results from the
preliminary economic assessment ("PEA") (also called a scoping study)
on its Yenipazar gold, silver, copper, lead, and zinc deposit in
central Turkey. The PEA was completed by P&E Mining Consultants
Inc.("P&E"), with EHA Engineering Ltd. ("EHA") and BC Mining Research
Ltd, ("BCMR") having completed the metallurgical component of the
study. All currency amounts in this news release are in United States
dollars unless otherwise indicated.
"This is the most significant milestone for our company," said Jacob
Willoughby, President and Director of Aldridge. "The PEA ascribes an
estimated pre-tax net present value to the Yenipazar Project of $209
million discounted at 7%. We are very encouraged with these results
and believe we can greatly improve the project economics further
through metallurgical test work and continued exploration on the
promising Yenipazar property, which is 100 square kilometres in size.
In particular, we are strongly optimistic that our gold and silver
recoveries at Yenipazar can be significantly improved upon, which would
result in a substantially higher NPV".
The Yenipazar project is subject to an earn-in agreement with Anatolia
Minerals, wherein Aldridge can earn a 100% working interest, subject to
a 6 % net proceeds interest ("NPI", revenues less operational cost)
until revenues of US$ 165 million are generated, and 10 % NPI from
Conclusions and Recommendations
P&E concludes that the Yenipazar Project has favourable economic
potential as an open pit mine producing copper, zinc and lead
concentrates containing quantities of gold and silver. The base case
economic analysis contemplates an average life-of-mine strip ratio of
4.5:1 (including the pre-stripping), a 5,700 tonnes per day mill feed
rate and a 12 year mine life. Pre-production capital expenditures,
including contingencies, are estimated to be $198 million. The
Yenipazar project has an estimated pre-tax net present value of $209
million at a 7.0% discount rate and an internal rate of return of 23.2%
using base case metal prices of $2.95/lb Cu, $0.86/lb Zn, $0.90/lb Pb,
$1,007/oz Au and $16.19/oz Ag (3 year trailing average prices at Nov
30, 2010). Only 23.6 million Indicated tonnes of the diluted and
recovered potentially mineable portion of the Yenipazar Project
resource above an NSR cut off grade of $17.50 per tonne were used in
the base case. The mine life average resource grades including mine
dilution and losses are as follows: Au 1.02 g/t, Ag 31.6 g/t, Cu 0.29%,
Pb 1.09% and Zn 1.43%.
The PEA is preliminary in nature and its mineable tonnage includes 7%
Inferred mineral resources that are considered too speculative
geologically to have 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. The
remaining 93% mineable resources are in the Indicated classification.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. The potentially mineable mineral
resources in this press release were estimated using the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM), Standards on
Mineral Resources and Reserves, Definitions and Guidelines prepared by
the CIM Standing Committee on Reserve Definitions and adopted by CIM
Council December 11, 2005.
P&E recommends that the Company advance the project with extended and
advanced technical studies in metallurgical, geotechnical and
environmental matters with the intention to advance the project to a
The economic analysis uses a simple pre-tax cash flow model where annual
non-discounted revenues during the 12 year mine life are projected. The
mine would produce three concentrate product streams; copper, zinc and
lead with all three containing silver and gold.
Highlights of the economic analysis:
Yenipazar Project Economic Indicators
Net present value
Undiscounted $408 million
5.0% discount $255 million
7.0% discount (base case) $209 million
10.0% discount $151 million
Internal Rate of Return 23.2%
Project Payback Period From Start of Production (years) 3.9
Total Pre-Production Capital $198 million
Total Sustaining Capital $45 million
Life of Mine Average NSR Value ($/tonne) $57.27
Life of Mine Average Operating Cost ($/tonne) $29.65
Average Diluted and Mine Recovered Resource Grades
Au 1.02 g/t
Ag 31.6 g/t
Average Annual Payable Life-Of-Mine Production
Au 23,700 oz
Ag 1,136,000 oz
Cu 9.7 million lbs
Pb 36.8 million lbs
Zn 36.5 million lbs
Surface mining at the Yenipazar project is based on a conventional drill
and blast operation with truck and shovel loading for the waste rock
and ore. Operating bench heights of 10 metres have been assumed for the
ore and waste. A maximum of eight 90 tonne haul trucks, a 10m3 hydraulic excavator and a 13m3 front end loader are contemplated for this operation, with
annual total material movement as high as 15.8 million tonnes.
The mine plan contemplates transporting the resource by truck to a
processing plant near the open pit followed by primary crushing. Waste
rock will be used to construct the dykes of the tailings management
facility ("TMF"). The remainder of the waste rock will be deposited in
an adjacent rock storage pile.
Estimated mine closure and TMF rehabilitation costs allowances have been
included in the economic analysis. During mine operation, health and
safety and environmental protection costs, including effluent
treatment, have also been estimated. Due to the preliminary nature of
this evaluation, the cost for land acquisition has not been included.
Further technical, environmental and socio-economic studies may result
in minor adjustments to the pit design and land usage.
Assumed life-of-mine recoveries combined from all 3 product streams of
Cu, Pb, Zn, Au and Ag are as follows: 76.6%, 77.8%, 58.8%, 36.8% and
56.9%. Projected concentrate grades are 55% for Zn, 55% for Pb with
estimated 1,025 g/t Ag and 23% for the copper concentrate, which also
is projected to contain 20 g/t Au and 337 g/t Ag. The assumed
recoveries were primarily based on locked cycle testing completed by
Dr. Zafir Emekci of Hacettepe University in Ankara, Turkey. In order
to maximize these recoveries, the company is in the process of hiring a
globally recognized testing facility specializing in the flotation of
Cu-Pb-Zn ores to conduct a thorough locked cycle flotation study.
Qualified Persons and Report
The PEA study was completed under the supervision of Eugene Puritch, P.
Eng. of P&E. Mr. Puritch was also responsible for mine design,
production scheduling and overall financial analysis. Alexander
Partsch, P.Eng., also of P&E, was responsible for mining capital and
operating costs and cash flow modelling.
Alfred Hayden, P. Eng. of EHA was responsible for metallurgical process
capital costs. Andrew Bamber P.Eng. of BCMR provided process recoveries
and operating costs. P&E is responsible for the resource estimate on
which the PEA is based.
Each of the individuals named above is a qualified person, as defined in
National Instrument 43-101, is independent of the Company and is
responsible for the technical disclosure contained in this news
release. Eugene Puritch, P.Eng has reviewed and approved the contents
of this press release.
The PEA technical report, which will be prepared in compliance with
National Instrument 43-101, will be filed on SEDAR at www.sedar.com
within 45 days of this news release.
About Aldridge Minerals
Aldridge Minerals Inc. is mainly focused on mineral opportunities in
Turkey where the Company is conducting an ambitious exploration and
development program at its flagship Yenipazar polymetallic VMS project.
Aldridge has also identified several other prospective opportunities in
Turkey as well as Papua New Guinea, where the company has amassed a
large property position with a systematic exploration program currently
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.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements including
statements relating to mineral resource estimates, capital and
operating cost estimates, production and economic return estimates. The
PEA, and the estimates contained therein, are preliminary in nature and
there is no assurance that the Company will be successful in extracting
metals from the Company's mineral exploration licences in Turkey on a
commercial scale owing to a number of factors. The PEA is based on a
number of assumptions, any one of which, if incorrect, could materially
change the projected outcome. Factors that could affect the outcome
include, without limitation, uncertainty of production and cost
estimates, permitting to construct and operate a mine (which permits
have not been obtained or applied for, and are not assured),
environmental, social and political factors, as well as metal prices
and unanticipated technical difficulties, and the other risk factors
described in the Company's MDA for the nine month period ending Aug 31,
2010 filed on October 12, 2010 available on SEDAR. The forward-looking
statements contained in this news release represent the Company's views
and expectations as of the date of this release and should not be
relied upon as representing its views and expectations at any
SOURCE Aldridge Minerals Inc.
For further information:
Aldridge Minerals Inc., Jacob Willoughby, President and Director, (416) 558-4717
The Equicom Group Inc., Patrick Piette, (416) 815 0700 x 267 or Dave Feick, (403) 218-2839