Mine Plan... Awfully quiet in here with such an anticipated release? No comments? IMO it was a good report but not surprised to see small selloff... on little to no volume however so nothing to worry about.
Don't they have resource estimate coming out soon as well?
red911
Scorpio Gold Mineral mine plan predicts three-year LOM
2012-10-01 09:49 NT - News Release
Mr. Peter Hawley reports
SCORPIO GOLD REPORTS ON MINE PLAN STUDY FOR THE DRINKWATER AND MARY PITS, MINERAL RIDGE GOLD OPERATION
Scorpio Gold Corp. is releasing results of the life-of-mine plan study (LOM) completed by AMEC E&C Services Inc. of Sparks, Nev., dated July 15, 2012, for the Drinkwater and Mary pits at the 70-per-cent-owned Mineral Ridge gold operation, Nevada. Scorpio Gold attained commercial production status at Mineral Ridge on Jan. 1, 2012.
The mine plan projects a current three-year mine life at 66,000 tons per month based on estimated measured and indicated mineral resources of 3.2 million tons grading 0.059 ounce per ton gold (190,800 ounces contained gold), including probable mineral reserves of 2.1 million tons grading 0.062 ounce per ton gold (131,000 ounces contained gold).
This mine plan study is exclusive of continuing studies by Telesto Nevada Inc., which includes deposit modelling and a National Instrument 43-101-compliant mineral resource estimate for the satellite deposits, Brodie, Wedge B, Bluelite, Solberry and Oromonte (see July 24, 2012, news release).
Peter Hawley, chief executive officer, comments: "This snapshot view of the LOM provides a strong base for the company to grow at Mineral Ridge. Already the study's quoted throughputs, grades and produced ounces have been exceeded in operations to date at Mineral Ridge. The completed 2012 Mary LC drilling and the present drilling of the Drinkwater highwall zone will be incorporated into the 2013 mine reserve plan later this fall, which is expected to add additional years to the LOM. We are pleased to receive this economic study that solidly places over 68 per cent of the total measured and indicated resources into the probable reserve category and provides good recommendations for improving the operation, as we have already done, and for advancing our satellite deposits to development and production stages. The estimated timing for Telesto's completion of the mineral resource estimate for the adjacent satellite deposits is the end of October."
Principal outcomes -- life-of-mine plan study:
- There are estimated probable mineral reserves of 2.1 million tons at 0.062 ounce per ton gold (131,000 ounces contained gold).
- There is a three-year mine life at a 66,000-tonne-per-month throughput.
- Average annual gold production is 30,000 ounces over the projected life of mine.
- Total direct operating cash costs are $906 per ounce of gold over the life of mine.
- After-tax net present value (NPV) is $25.8-million (8-per-cent discount rate) at an average gold price of $1,530 per ounce. Note that the average gold price used in the NPV calculation is based on a near-term spot gold price that regresses to a long-term price of $1,300 per ounce of gold, or the price at which the reserves and resources are reported.
- Key risks to the project include:
- Current operations mining rate is lower than assumed in the LOM; extra equipment, operating shifts or both will make up the difference.
- Current operations heap-leach solution-application rates are lower than indicated in the LOM; this situation is likely to improve once the additional water well is operational, expected in the fourth quarter of 2012.
- Key opportunities at the project include:
- Current mining results indicate that some of the material mined from voids left by historical underground mining contains gold mineralization, which has allowed a net increase in the ore recovered over what was predicted by the mineral reserve estimate.
- There is potential to identify additional mineralization from drill-defined extensions to the Drinkwater and Mary deposits, which may support the mineral resource estimation and potentially be converted into mineral reserves.
- Exploration potential of identified prospects surrounding the Drinkwater and Mary deposits.
The mineral reserves presented in the table have demonstrated economic viability through the application of modifying factors in the LOM. All mineral reserves are classified as probable mineral reserves with no proven mineral reserves.
MINERAL RESERVE ESTIMATE -- DRINKWATER AND MARY PITS Ore tons Gold grade Contained Waste tons Strip ratio Pit (x 1,000) (oz/ton) gold (oz) (x 1,000) (waste:ore)Drinkwater 1,269 0.061 77,000 4,537 3.6 Mary 832 0.065 54,000 5,488 6.6 Total 2,101 0.062 131,000 10,025 4.8 Notes: 1. The effective date of the mineral reserve is April 30, 2012.2. The mineral reserve estimate was prepared by Jim Ashton, PE, ofScorpio Gold and audited by independent qualified person, Don Tschabrun,SME-RM, of AMEC.3. Mineral reserves are reported at a 0.020-ounce-per-ton-gold cut-off grade.4. Mineral reserves are contained within a designed pit with access rampsbased on the Lerchs-Grossmann (LG) algorithm utilizing a $1,300 per ounce gold price. The optimization mining cost was $5.40 per tonne of ore mined at Drinkwater, $5.31 per tonne of ore mined at Mary, $2.77 per tonne of waste mined and $1.46 per tonne of fill mined. An average crushing cost of $2.57 and an average processing cost of $6.90 were applied per ton processed. General and administrative costs were applied at $3.98 per ton processed. Shipping and refining costs of $21 per ounce of gold produced were applied. A 65-per-cent metallurgical recovery was applied. Overall pit slope angles ranged from 45 degrees to 49 degrees.
MINERAL RESOURCE ESTIMATE -- DRINKWATER AND MARY PITS Tons Gold grade Contained gold Classification (x 1,000) (oz/ton) (oz)Measured - - - Indicated 3,231 0.059 190,800 Measured plus indicated 3,231 0.059 190,800 Inferred 89 0.043 3,800 Notes: 1. Mineral resources are reported inclusive of mineral reserves.2. The effective date of the mineral resource is April 30, 2012.3. The mineral resource estimate was prepared by Jim Ashton, PE, ofScorpio Gold and audited by independent qualified person, MichaelMunroe, SME-RM, of AMEC.4. Mineral resources are reported at or above a 0.020-ounce-per-ton-gold cut-off grade.5. Mineral resources are reported using a long-term gold price of$1,500 (U.S.) per ounce.6. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The mineral resource estimate is based on a total of 1,510 drill holes and 52,682 assay results collected between 1939 and 2012 from the Drinkwater, Mary and Last Chance deposits. The cut-off date for information used in the geologic model and mineral resource model was Feb. 29, 2012.
The key assumptions, parameters and methods used to estimate the mineral resource and mineral reserve are as follows:
- Mineral resources reported are constrained within a conceptual Lerchs-Grossmann (LG) pit shell and are inclusive of mineral reserves.
- The economic parameters used to construct the mineral resource LG pit are the same as those used in the mineral reserve pit except that the price of gold was increased from $1,300 per ounce to $1,500 per ounce.
- The block model consists of 15-foot-by-15-foot-by-10-foot blocks estimated using inverse distance to the second power methodology. Mineralized envelopes were constructed on 50-foot-spaced sections using a 0.010-ounce-per-ton-gold assay grade as a guide. The envelopes were combined into wire frames that defined the extent of mineralization for both the Drinkwater and Mary deposits.
- Extensive historical underground workings are present in the Drinkwater and Mary areas. Underground wire frames were used to remove the percentage of the block contained within the mineralized envelope.
- A single bulk-density factor of 13 cubic feet per short ton was assigned to all blocks that represent in situ rock and used in the mineral resource estimates.
- In the Drinkwater area, assays were capped at a threshold of 1.6-ounce-per-ton gold, and in the Mary area, assays were capped at a threshold of 1.0 ounce per ton gold.
- Mineralization pinches and swells and is not easily mapped, and correlation between sections is often difficult; therefore, outlier restriction was also applied to restrict gold interpolation at a threshold of 0.5 ounce per ton gold and a distance of 60 feet.
The mineral resource and mineral reserve estimates were prepared by Jim Ashton, PE, of Scorpio Gold, and audited by AMEC. An independent technical report supporting the disclosure of the mineral resource and mineral reserve estimate is being prepared by AMEC and will be filed on SEDAR within 45 days of this news release. The mineral reserve and mineral resource estimates have been prepared in accordance with the 2010 CIM Definition Standards for Mineral Resources and Mineral Reserves as incorporated by reference in National Instrument 43-101 of the Canadian Securities Administrators. The AMEC qualified persons for the estimates are Don Tschabrun, RM-SME, for mineral reserves, and Michael Munroe, RM-SME, for mineral resources. The technical report will be authored by Todd Wakefield, SME-RM, Michael Munroe, SME-RM, Don Tschabrun, SME-RM, and Michael Drozd, SME-RM, of AMEC. Readers are cautioned that the conclusions, projections and estimates set out in this news release are subject to important qualifications, assumptions and exclusions, all of which are detailed in the coming technical report. To fully understand the summary information set out above, the technical report that will be filed on SEDAR should be read in its entirety.
Scorpio Gold's chief executive officer, Peter Hawley, PGeo, is a qualified person for the Mineral Ridge operation and has reviewed and approved the content of this release. For additional information, please see the company's website.
About Mineral Ridge
The Mineral Ridge gold mining operation is located in Esmeralda county, Nevada. Scorpio Gold holds a 70-per-cent interest with joint venture partner Waterton Global Value LP (30 per cent) and is entitled to receive 80 per cent of cash flow generated. Mineral Ridge is currently in production as a conventional open pit mining and heap-leach operation. The property is host to multiple gold-bearing structures, veins and bodies at exploration, development and production stages.
We seek Safe Harbor.