(all amounts in US$)
TORONTO, April 1 /CNW/ - Zaruma Resources Inc. (TSX-ZMR) today reported
that it had filed its 2008 Audited Consolidated Financial Statements,
Management's Discussion and Analysis, and the Annual Information Form on
SEDAR. The reports will also be posted on the Company's website,
During 2008 the Company developed and constructed the wholly owned Luz
del Cobre copper project on the San Antonio property in Sonora, Mexico.
Financing was provided beginning in late 2007 by Empresa Minera Los Quanuales
("EMLQ"), a subsidiary of Glencore International AG. Work was suspended in
October 2008, four months before the projected start-up of copper cathode
production, as available funding was insufficient to complete the development
and plant construction. All aspects of construction on the leach pad area and
plant buildings were nearing completion on the date of suspension. Mining
commenced in the third quarter, with 337,000 tonnes of overburden removed and
58,800 tonnes of ore mined and stockpiled. Cost incurred on the project in
2008 was $28 million.
In the independent NI 43-101 Technical Report on the feasibility of the
Luz del Cobre copper project, filed in November 2006, the Company reported
proven and probable reserves within the optimized open pit shell of 4.4
million tonnes at an average grade of 1% copper, after dilution. Over a life
of mine of five and a half year, the project was projected to produce 73
million pounds of copper.
The Luz del Cobre deposit remains open towards the west and southwest. In
a news release dated May 13, 2008, the Company reported on the successful
Trion-Calvario-Luz del Cobre drilling programme, which added 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, providing six additional months of production to the mine life.
The current estimated cash production cost has dropped to $1.05 per pound
of copper as a result of lower costs of acid and other commodities as well as
a weakened Mexican exchange rate. Assuming a copper price of $1.75 per pound,
the projected operating cash flow before taxes and interest for the life of
mine is $15 million, after recovery of an estimated $37 million capital cost.
A review of the existing gold resources on the San Antonio property to
determine if heap leachable material was present that could be quickly
accessed as an alternative strategy to copper production brought the Cerro
Sapuchi, ('Sapuchi") area, within 800 metres of the Luz del Cobre crusher to
management's attention. There is a potential open-pit body of mineralization
with drilling data from the 1990's, supplemented with assay data from surface
trenching and sampling from old historical underground mine workings. The
compilation of this data, including over 5,100 fire assays, resulted in an
estimate of the contained resources and the modeling of an open pit mine using
Gemcom and Minesite software.
The Sapuchi resource, based on reliable data is an open-pit, leachable
gold resource of 2.2 million tonnes at a grade of 1.04 g/t in the "Indicated"
category for a gold content of 74,000 ounces along with 0.9 million tonnes at
a grade of 0.99 g/t in the "Inferred" category with a gold content of 24,000
ounces, as estimated by Eugene Puritch, P.Eng. of P&E Mining Consultants Inc.
The report is not yet to NI 43-101 reporting standards, but a Technical Report
on Sapuchi is expected within 45 days. The material leaches well, with an 80%
gold recovery and moderate cyanide consumption. This resource is open ended on
three sides and there are other similar gold targets in the area yet to be
The Company intends to finance the required capital cost of $4 million to
go into production through a gold loan. The projected operating cash flow from
this resource, initially producing approximately 25,000 to 27,500 ounces per
year for three years, is $33.5 million, assuming a gold price of $800 per
ounce and a cash cost of production of $374. Equipment, such as the crusher,
mobile generators, conveyors and stackers purchased for the copper project
will be utilized for the gold production. The operating plan and cost
estimates for the project have been reviewed and reported on by independent
metallurgical consultant Rolly Nice, P.Eng. The estimated time required to put
the Sapuchi resource into production is four to five months from financing.
The cooperation of EMLQ and other creditors will be required to institute this
Additional copper exploration successes were reported in a news release
on December 11 2008 from an area known as Sapo and Carrizo, located 8 km to
the southwest of Luz del Cobre along the Company's western portion of the
11,240 hectares of mining concessions. Exploration work identified a number of
near surface occurrences of oxide copper mineralization and nearby exposures
of highly altered, sulphide-bearing intrusive rocks, supporting the concept of
a larger metal target. A 2,000 metre, 9 hole drilling programme on selected
targets was completed, resulting in the discovery of a significant
hydrothermally altered breccia containing primary copper mineralization in the
Carrizo area and confirmation of the presence of near-surface oxidized copper
mineralization in at least three separate target areas in the Sapo area. The
program is being financed by EMLQ on an earn-in basis.
Exploration work, compilation and assessment of data at San Antonio was
conducted under the supervision of Exploration Manager and Qualified Person,
James E. Poulter, Professional Geologist.
In Venezuela the Company holds the El Foco property with 2005 NI 43-101
reported measured and indicated resources of 1 million tonnes at 2.6 g/t Au
for 94,000 ounces of gold and 56,000 tonnes of inferred material at 2.0 g/t Au
containing another 5,600 ounces in the open pit, heap leachable Alcaravan
project. Sufficient exploration and development work has been completed to
maintain the properties in good standing, but political instability in
Venezuela suggests that the necessary permitting to advance this project to
production in a reasonable time period is not likely, so the $1.8 million
carrying cost of the project has been written off. Expenditures incurred in
2008 totaled $156,342 compared to $58,142 in 2007.
Corporate expenses in 2008 were $849,000 compared with $659,000 in 2007.
The net loss for 2008, including the $1.8 million Venezuelan write off was
$4.3 million compared to $1.3 million in 2007. Funds raised through the
exercise of share purchase warrants was $845,000 in 2008, ($924,000 for shares
issued in 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 programmes. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability.
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.: 521 662 222 0063,
52 662 210 5650, firstname.lastname@example.org; Frank van de Water, CFO and
Secretary, Tel.: (416) 869-0772, email@example.com