an average grade of 8.73 g/t (94% recovery), Intrepid 2006 Resource/Reserve Audit
Oct 2, 2006 6:22:00 PM
TORONTO, ONTARIO -- (MARKET WIRE) -- 10/02/06 -- Intrepid Mines Limited (TSX: IAU)(TSX: IXN)(ASX: IAU), an international gold and silver production, development and exploration company has filed the current resource/reserve estimates for the Paulsens operation in Australia and the updated in-pit resource estimate for the Kamila-Mercado zones at the Casposo project in Argentina (see Sedar September 28, 2006).
At Paulsens, gold production totaled 86,206 ounces from 325,720 tonnes processed, at an average grade of 8.73 g/t (94% recovery), in the 13 months since commencement of operations through June 30th, 2006. The mine is expected to produce an average of 80,000 ounces of gold per year for the first five years of operations.
An independent audit completed late September, 2006 by Resource Evaluations Pty Ltd ("ResEval") indicates very good reconciliation between the portion of the new resource model mined and mine and mill production to date. Mined resource is three percent lower than the estimated resource. Total resources remaining at June 30th, 2006 (measured and indicated at a cut-off grade of four g/t gold) are 1,023,000 tonnes at an average grade of 10.2 g/t, containing 336, 400 ounces of gold. In addition, 97,134 ounces have been identified as inferred at a grade of 9.1 g/t gold.
ResEval has also estimated a probable reserve of 767,931 tonnes grading 8.53 g/t gold for 210,652 contained ounces of gold plus a measured and indicated resource of 427,000 tonnes grading 8.07 g/t for 100,800 ounces of gold, both remaining unmined at present. Mineral resources that are not mineral reserves do not have demonstrated economic viability via detailed design. However, potential exists to incorporate these resources into mine reserves by applying detailed mine planning and design and operations experience in the deposit to them.
In July 2006, Intrepid began the first Paulsens Deep drilling program, designed to extend mine resources beyond the original five year mine plan by extending orebody continuity below 300 metres vertical. A total of 15 holes have been drilled out of 20 planned, from surface to hole depths of 550 metres to intersect the Upper and Lower lodes. Additionally, shallow portions of the Paulsens Deep are being tested from the base of the mine. Results will be incorporated into a new resource estimate for annual reporting at December 31st, 2006.
At Casposo in Argentina, an independent updated mineral resource estimate was completed for the Kamila-Mercado zones by Eugene Puritch of P and E Mining Consultants ("P and E") in September, 2006. The in-pit resource estimate (based on a gold equivalent cutoff of 1.40 g/t gold) is 1,691,000 tonnes classified as indicated grading 5.29 g/t gold and 115.4 g/t silver containing 287,200 ounces of gold and 6,270,900 ounces of silver and representing 368,800 ounces of gold equivalent (gold/silver ratio of 77:1). (Table 2).
Table 1. Mineral Reserves and Mineral Resources of the Paulsens Deposit
as at June 30, 2006
Paulsens Deposit - June 30 2006 Mineral Resource Estimate(1,2)
------------------------------------------------------------------------
Measured Indicated Total Measured and Inferred
Indicated
------------------------------------------------------------------------
Lode Tonnes Au Tonnes Au Tonnes Au Au Tonnes Au Au
----------------------------------------
t g/t t g/t t g/t oz t g/t oz
------------------------------------------------------------------------
Upp-
er 248,800 7.9 559,800 9.5 808,600 9.0 234,200 226,000 8.9 64,700
------------------------------------------------------------------------
Low-
er 45,000 19.8 170,000 13.3 215,000 14.7 101,300 41,000 7.0 9,200
------------------------------------------------------------------------
Oth-
er - - - - - - - 64,000 11.0 22,600
------------------------------------------------------------------------
Tot-
al 294,000 9.8 729,000 10.4 1,023,000 10.2 336,400 332,000 9.1 97,100
------------------------------------------------------------------------
June 2004 Pre-
mining
Resource
Estimate 1,223,000 12.2 1,223,000 12.2 480,400 217,000 8.7 60,900
------------------------------------------------------------------------
(1) Estimate of undiluted resource remaining at 30 June 2006, using
cutoff grade of 4.0g/t Au for resources confined to 1210mRL - 720mRL
mine levels
(2) The mineral resource estimates for the Paulsens Mine set out in the
above table were prepared under the supervision of Paul Payne CPGeo, the
Qualified Person, in compliance with National Instrument 43-101.
Paulsens Deposit - June 30, 2006 Mineral Reserve Estimate(1)
------------------------------------------------------------------------
Development Production Total
------------------------------------------------------------------------
Lode Tonnes Au Au Tonnes Au Au Tonnes Au Au
------------------------------------------------------------------
t g/t oz t g/t oz t g/t oz
------------------------------------------------------------------------
Upper 42,103 9.05 12,256 171,810 11.01 60,842 213,914 10.63 73,098
------------------------------------------------------------------------
Lower 69,842 7.40 16,615 484,176 7.77 120,939 554,018 7.72 137,554
------------------------------------------------------------------------
Total 111,945 8.17 28,871 655,986 8.57 181,781 767,931 8.53 210,652
------------------------------------------------------------------------
(1) The mineral reserve estimates for the Paulsens Mine set out in the
above table were prepared under the supervision of Stephen King BEng
(Mining), the Qualified Person, in compliance with National Instrument
43-101.
Table 2. Minerals Resources for the Kamila-Mercado Zones, Casposo
Project, Argentina. Casposo Project, Kamila Deposit - September 2006
In-Pit Resource Estimate(1)
------------------------------------------------------------------------
Tonnes Grade Grade Au Ag Au Eq.
Au g/t Ag (g/t) total oz total oz total oz
------------------------------------------------------------------------
Indicated 1,691,000 5.29 115.4 287,300 6,270,900 368,800
------------------------------------------------------------------------
Inferred 13,000 3.35 55.9 1,400 23,800 1,700
------------------------------------------------------------------------
(1) Estimate of drilled resource using cutoff grade of 1.40 g/t Au
equivalent (Au/Ag ratio equals 77:1), projected Process cost of
US$15.70 / tonne and General & Administration cost of US$3.35 /
processed tonne.
(2) The mineral resources for the Casposo Project set out in the above
table were prepared by Eugene Puritch, P. Eng, a Qualified Person under
National Instrument 43-101 and reported in "An Updated Resource Estimate
and Report of Exploration Activities for the Casposo Property,
Department of Calingasta, San Juan Province, Argentina", SEDAR filing,
September 28th, 2006.
Additional drill results from Paulsens mine and the Kamila - Mercado deposit, as well as Julieta and the Southeast Extension Zones at Casposo will be published as these projects advance and results are available, with incorporation of new results into mine planning at Paulsens and resource evaluations at Casposo. The Casposo feasibility is anticipated to be completed on the Kamila-Mercado zones by year end. Further resource and exploration drilling will commence in early 2007.
On behalf of the Board of Directors of Intrepid Mines,
Laurence Curtis, President & CEO (for exploration releases), or
Brett Lambert, Chief Operating Officer (for Operation releases), or
Derek Humphry, Chief Financial Officer (for Financial releases), or
Colin G. Jackson, Chairman
Information in this announcement is based on information provided by competent persons as defined in the 2004 Edition of the JORC 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and as Qualified Persons as defined in Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Information has been compiled by William McGuinty P.Geo. VP Exploration, a full time employee of Intrepid Mines Limited who has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken, and consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.
Intrepid Mines Limited has an international production, development and exploration profile, and holds interests in several gold-silver and silver-base metal properties in Australia, Argentina, El Salvador, and Canada, either directly or through joint venture partnership. The issued capital is 150,032,576 shares comprised of 119,027,689 ordinary shares of Intrepid Mines Limited quoted on the TSX:IAU and ASX:IAU and 31,004,887 Exchangeable Shares of Intrepid NuStar Exchange Corporation quoted on the TSX:IXN.