TORONTO, June 18 /CNW/ - Zaruma Resources Inc., (TSX-ZMR)
Zaruma Resources Inc. reported that at yesterday's Annual and Special
Meeting of Shareholders, the directors proposed by management for election,
David Kelly, Peter Lorange, Michael Power, Michael Richings, Thomas Utter and
Frank van de Water were elected.
In addressing the shareholders, Thomas Utter, Chief Executive Officer of
the Company outlined the progress of the Luz del Cobre copper project in
Sonora, Mexico, noting that the project is on schedule for first production of
copper cathodes by the end of 2008. At this time, approximately 70% of the
purchase orders for capital equipment and contracts for the supply of services
for the development of the mine and leach pad, and for the construction of the
buildings for the solvent extraction and electro-winning plant have been
The expected capital cost of the project is currently US$35 million, and
reflects the extraordinary increase in the costs of steel, cement, labour,
power generation equipment and sulphuric acid used in the leaching process.
The increase in costs prevails throughout the mining industry, but historic
high copper prices mitigate the effect on the economics of the project.
Current projections for the first five and a half years of the mine life,
assuming a copper price of US$3.36 per pound, (trailing two year average), and
a total cash production cost of $1.55 per pound, are for the production of 73
million pounds of copper, resulting in a net cash flow from operations before
interest and income taxes of US$138 million over that period. Dr. Utter
pointed out that this projection does not take into account the recently
announced Calvario and South extension of the Luz del Cobre deposit, (news
release May 13, 2008), of 45,000 tonnes of measured resources with a grade of
1.00% Cu, 508,000 tonnes of indicated resources at 0.81% Cu, and 128,000
tonnes of inferred resources grading 0.64% Cu. The limits to these two
deposits remain open ended, and will extend the life of mine for the project.
Further drilling on these deposits is not planned until the mine plan
approaches these areas. Recovery of the capital cost of the project from cash
flow is expected to be in year 2 of the plan.
Discussions have commenced with Glencore International AG, ("Glencore")
and other interested parties regarding the funding of the increased capital
cost and working capital requirements of the project. Glencore is currently
providing US$22 million toward the capital cost under the financing agreement
signed in June 2007.
Zaruma Resources Inc. is listed on The Toronto and Frankfurt Stock
Exchanges, (symbol: ZMR). Common shares outstanding: 117,608,747.
This News Release contains forward-looking statements which are typically
preceded by, followed by or including the words "believes", "expects",
"anticipates", "estimates", "intends", "plans" or similar expressions.
Forward-looking statements are not guarantees of future performance as they
involve risks, uncertainties and assumptions, including securing additional
funding to continue its development programs.
For further information:
For further information: Zaruma Resources Inc., 20 Toronto Street, 12th
Floor, Toronto, ON, M5C 2B8, Canada, Fax: (416) 367-3638, email@example.com,
www.zaruma.com; Dr. Thomas Utter, President and CEO, Tel.: (416) 777-1781,
firstname.lastname@example.org; Frank van de Water, CFO and Secretary, Tel.: (416)