(all figures in US$)
TORONTO, March 30 /CNW/ - Zaruma Resources Inc. (TSX-ZMR) today reported
that it has filed its 2006 Audited Consolidated Financial Statements,
Management's Discussion and Analysis, and the Annual Information Form on
SEDAR. The reports are also posted on the Company's website, www.zaruma.com.
The main activities in recent months were concentrated on the Company's
wholly owned Luz del Cobre copper project on the San Antonio property in
Sonora, Mexico, with additional test work and a review of all aspects of the
Technical Report on the feasibility of this project. The Technical Report,
compliant with NI 43-101 reporting standards, was filed on November 10, 2006.
Glencore International AG is actively participating in the current work in
progress, under a Memorandum of Understanding whereby they undertook to
finance the capital cost of the project, thereby obtaining the right to
purchase the copper produced at prevailing London Metal Exchange pricing.
Additional metallurgical recovery testing is being done on separate
samples of material from different locations in the ore body. New trenches
were opened up in the near surface oxidized material and samples submitted to
column testing. The test results reported 85% recovery of copper after 30 days
of leaching compared to 80% recovery reported in last year's tests. Samples
recently taken from two different levels of tunnel networks into the centre of
the ore body show leach recovery curves surpassing 80% of contained copper
after 30 days. The occurrence of slow leaching primary copper sulphides
appears to be limited. Closed circuit column tests are currently being
conducted to replicate as closely as possible actual leach pad operating
conditions. These tests should be completed in April and are expected to
confirm the recovery tests done on composite samples in September, 2006.
Considerable work has been done in refining the block model of the ore
reserves, and an updated model will be completed in April. The additional
information will be used for operational mine planning, but is not expected to
change the total ore reserves. It has been determined that the deposit is
still open ended on the south side, but it is not planned to establish
possible additional tonnage by drilling at this time, as an expansion of
reserves would not alter the mine plan or the economic feasibility conclusion
in the Technical Report.
The Technical Report was completed by M3 Engineering and Technology
Corporation, ("M3"), Tucson, Arizona and P&E Mining Consultants Inc., ("P&E"),
Brampton, Ontario. Qualified Persons and Independent Consultants Peter Erath,
P.Eng. of M3 authored the review of the process design, flow sheet,
engineering and capital and operating cost estimates, and Jerry T. Hanks
prepared the metallurgical testing section of the report. Eugene Puritch,
P.Eng., of P&E estimated the ore reserves and prepared the pit optimization
and production schedule. Proven and probable reserves within the optimized
open pit shell total 4.4 million tonnes at 1% copper, after dilution.
Based on the SX-EW plant processing copper solution from mining 2,800
tonnes of ore per day, the project capital cost estimate is US$24.4 million.
This study is based on contract mining of the open pit, a mine life of over 5
years and an average copper recovery of 78.6%. The planned average annual
copper cathode production is 15 million pounds. At an assumed selling price of
$2.235 and an estimated operating cost of $0.92 per pound, the pre-tax net
operating cash flow is expected to be $19.4 million per year. The net present
value of the project is calculated to be $39 million at a 5% discount rate and
$30 million at a 10% discount rate. The capital payback period is estimated to
be 1.9 years after reaching full production.
Expenditures at San Antonio in 2006 were almost all on the Luz del Cobre
project. Total expenditures were $1,247,000 of which $899,000 was written off
as development and evaluation costs, (2005 - $605,000, largely on gold
Kappes, Cassiday & Associates, ("KCA") Reno, Nevada, and P&E Mining
Consultants Inc., ("P&E") of Brampton, Ontario are completing a Scoping Study
on the Alcaravan gold deposit on the Company's El Foco property in Venezuela.
KCA is completing the engineering and cost estimates for the project, and
Eugene Puritch, P.Eng., of P&E estimated the ore resources and prepared the
pit optimization and production schedule.
The report will be used to support the application to the Venezuelan
government for a mine construction permit. Costs incurred on the El Foco
Project in 2006 were $195,000 compared with $239,000 in 2005.
Corporate expenses in 2006 were $601,000 compared with $651,000 in 2005.
The Company follows a policy of expensing exploration, development and
evaluation costs as they are incurred, until economic feasibility of a project
is determined. The net loss for 2006 was $1.7 million compared to $1.5 million
in 2005. Funds raised through private placements of common shares and the
exercise of share purchase warrants was $2.8 million in 2006, compared to
$610,000 in 2005.
Zaruma Resources Inc. is a pre-production mineral exploration company
listed on The Toronto and Frankfurt Stock Exchanges (symbol: ZMR). Common
shares outstanding: 102,767,912.
This News Release contains forward-looking statements which are typically
preceded by, followed by or include 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, but not limited to
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)