TORONTO, July 29 /CNW/ - Galway Resources Ltd. (GWY: TSX-V) is pleased to
announce metallurgical results from the Victorio molybdenum-tungsten project
located in southern New Mexico. Overall, the results confirmed the historical
metallurgical test work done in the early 1980s and which formed the basis for
the assumptions regarding recoveries that were included in the recently
published Scoping Study. Conclusion of the phase 2 metallurgical program,
which is expected in the first quarter 2009, will allow for finalizing of the
concentrator flowsheet and better estimation of the capital and operating
costs implications on the metallurgical side in order to support the
"We are very pleased with these results from our metallurgical testing
program and believe there is room for further improvement which would only
further enhance the economics of this project," cites Robert Hinchcliffe,
President and CEO of Galway Resources.
Phase 1 of Metallurgical Program Just Completed
The first phase of the metallurgical program which has been ongoing at
Hazen Research, Inc. over the past year has been successfully concluded. The
purpose of the program was to confirm the results of the testwork performed in
1982 by Hazen on behalf of Gulf Mineral Resources Co. That original study
concluded that a molybdenum concentrate grade of 55-56% Mo was achievable at a
recovery of 85% and a low grade tungsten concentrate could be produced at a
75% recovery, which would then have to be further processed to produce a
marketable ammonium paratungstate (APT). The first phase has achieved similar
results to those achieved in the past.
Phase 2 Metallurgical Program to Commence at Hazen
The phase 2 program will soon be launched utilizing fresh core samples
from the 2008 drilling program. The initial emphasis will be on producing a
marketable tungsten concentrate by gravity concentration and pre-concentration
methods. Production of a marketable concentrate will have a significant
positive impact on the project economics by significantly reducing both
operating and capital costs associated with an APT plant.
"The molybdenum testwork continues to show that we can make a clean,
marketable molybdenum concentrate at high recoveries. However, we are most
excited about the possibility of improving the tungsten metallurgical
performance and economics. The potential to eliminate or reduce the need to
produce APT will have a significant positive impact on the economics of the
Victorio project. Additionally, every 1% improvement in molybdenum recovery
boosts the NPV of the project by approximately 6%," cites Paul Valenti, VP of
Project Development for Galway Resources.
New Metallurgical Advisor Hired
We have recently retained H.M. (Matt) Bolu, P. Eng., consulting
metallurgist and expert on tungsten metallurgy to oversee the work at Hazen.
Matt is a consulting process engineer and has worked in the mining industry
for over 31 years. His professional career includes process
design/development, plant operations/management, project feasibility/economic
studies, detail design, and plant commissioning.
Matt has worked at Uludag Wolfram and CanTung mines as well as in
tantalum, gold, and copper mines from the 1970's through to 2000, and has been
involved in engineering and design/development of a number of tungsten
projects around the globe including MacTung and Nui Phao.
Highlights of Scoping Study
As reported on February 27, 2008, the highlights of the Scoping Study
completed by SRK Consulting U.S. Inc., which contemplated two different mining
scenarios using an average life of a mine price of $15/lb molybdenum (versus
the current price of $33 per pound) and $8/lb tungsten price (versus the
current price of $13 per pound) include:
Block Caving Scenario: This scenario is a larger project that considers
producing an average of 9.4 million pounds of molybdenum and 9.0 million
pounds of tungsten annually for 17 years. The preliminary economics suggest an
NPV (discount rate of 6%) of over US$270 million, a pre-tax (unlevered) IRR of
15%, and a required investment of US$442 million.
Selective Mining Scenario: This is a smaller scale project that offers
higher returns with a pre-tax (unlevered) IRR of 26%, and a NPV of
US$95 million. Under this scenario only a portion of the target resource is
extracted, with an average of 6.2 million pounds of molybdenum and 5 million
pounds of tungsten annually for 10 years. The capital required is estimated to
be US$242 million, the mining methods are a combination of long-hole stoping
with paste backfill and room-and-pillar mining.
About the Company
The company is focused on developing and commercializing the Victorio
project, which has 165,000 feet of historical drilling and an additional
40,000 feet drilled by Galway. The Company has retained John Tumazos to
investigate strategic alternatives to advance this project. The Company also
has an exploration initiative underway in Colombia that is focused on coal and
gold exploration. Management believes that its strategic portfolio of
properties offers investors an interesting exposure to a unique blend of
commodities (molybdenum, gold, tungsten, metallurgical and thermal coal) in
varying stages of development.
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this news release.
Some statements in this news release contain forward-looking information.
These statements include, but are not limited to, statements with respect to
the completion of transactions, the timing and amount of payments and share
issuances, the completion of financings, the use of proceeds, future
exploration, development and production activities and future expenditures.
These statements address future events and conditions and, as such, involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by the
statements. Such factors include, among others, the ability to complete
contemplated transactions, payments, share issuances and financings, the use
of proceeds, the time and success of future exploration, development and
production activities and the timing and amount of expenditures.
For further information:
For further information: Galway Resources Ltd., Robert Hinchcliffe,
President and Director, 1-800-475-2412, www.galwayresources.com