(all financial figures in US$)
TORONTO, Nov. 16 /CNW/ - Zaruma Resources Inc., (TSXV-ZMR.H), (the "Company") today reported that the Consolidated Financial Statements and Management's Discussion and Analysis report for the nine and three months ended September 30, 2009 is available on SEDAR and is posted on the Company's website, www.zaruma.com.
Activity on the San Antonio, Sonora, Mexico site during the three months was limited to maintaining security and the protection of the nearly completed infrastructure of the Luz del Cobre Copper Project. The heavy rain season at San Antonio has ended, and steps taken to mitigate damage proved to be successful, with the internal roads and the leach pad requiring only minor remedial work.
A formal demand for payment of the $25 million owing to a subsidiary company of Glencore International AG for the funding of Luz del Cobre was received, and the Company filed motions with the court in Mexico which had the effect of suspending proceedings.
With a currently projected cash cost of producing copper of US$1.15 per pound, and the current market price of copper of US$2.95, the Luz del Cobre Copper Project looks very attractive. The project could be producing copper at a planned rate of 15 million pounds per year for six years within six months of completing new financing arrangements. In addition to resolving the secured debt issue, an additional $15 million will be required to complete the construction and development in order to start production.
As reported in the news release on June 16, 2009, the Company also has 2.2 million tonnes of 1.04 g/t Au open pit, heap leachable Measured and Indicated oxide gold resources for 74,000 ounces and an Inferred resource of 0.9 million tonnes of 0.86 g/t Au for 24,000 ounces, known as the "Sapuchi Gold Project" on the same property as Luz del Cobre. (Note: mineral resources that are not mineral reserves do not have demonstrated economic viability.) The resource is open ended in three directions, and at a capital cost of approximately US$9 million, could be in production at the rate of 25,000 ounces per year within a matter of six months from completing a minor amount of drilling and completing the feasibility study referred to in the June 15, 2009 Technical Report, which estimated the cash operating cost to be $440 per ounce, based on an estimated waste to ore ratio that will very likely drop with further drilling.
The Company has continued its negotiations on the financing of Luz del Cobre and the Sapuchi Gold Project, with the expectation that an agreement can be reached on the terms and conditions in the near future.
The net loss for the nine months was $1,733,000, (1.5 cents per share), including $1,137,000 in costs pertaining to the mining projects, compared to a net loss of $1,730,000, (1.5 cents per share) for the same period in 2008. For the three months, the net loss was $551,000 compared to $681,000 for the three months to September 30, 2008.
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.
Zaruma Resources Inc. is a pre-production stage company listed on the TSX-V NEX Board (symbol ZMR.H) and the Frankfurt Stock Exchange (symbol: ZMR). Common shares currently outstanding: 117,608,747.
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term is defined in the policies of the TSX Venture Exchange) accepts
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SOURCE ZARUMA RESOURCES INC.
For further information: For further information: Zaruma Resources Inc., 20 Toronto Street, 12th Floor, Toronto, ON, M5C 2B8, Canada, Fax: (416) 367-3638, firstname.lastname@example.org, www.zaruma.com; Dr. Thomas Utter, President and CEO, Tel: +1 521 662 210 5650, email@example.com; Frank van de Water, CFO and Secretary, Tel.: (416) 869-0772, firstname.lastname@example.org