Feasibility study on Casposo newsIntrepid Receives Feasibility Study on Casposo Gold-Silver Project, Argentina
Monday March 5, 7:30 am ET
TORONTO, ONTARIO--(CCNMatthews - March 5, 2007) - Intrepid Mines Limited (TSX:IAU - News; TSX:IXN - News; ASX:IAU - News), an international gold and silver production, development and exploration company, is pleased to announce results of the recently completed feasibility study conducted by AMEC (Peru) SA on the Kamila zone at the Casposo Project in San Juan, Argentina.
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The highlights of the study are as follows (U.S. dollars are used, unless otherwise indicated):
- Mineral resources (Indicated only): 2.2 million tonnes of ore containing 313,278 ounces gold and 8.2 million ounces silver, grading 4.46 grams per tonne gold and 116 grams per tonne silver
- Mineral reserves: 1.8 million tonnes of ore containing 270,089 ounces of gold at 4.69 grams per tonne and 6.5 million ounces of silver grading 114 grams per tonne silver (predominantly open cut)
- Average annual production of 50,478 ounces of gold and 1.1 million ounces of silver or 68,500 ounces of gold equivalent annually using base case gold and silver pricing
- Average annual operating cost: $248 per ounce of gold equivalent, or $168 per ounce of gold after silver credits (of $8.50 per ounce)
- Capital costs, including 12 percent contingency, $45.5 million
- Average annual surplus operating cash flow (at $500 per ounce and $8.50 silver) after sustaining capital: $13.8 million
- Internal rate of return 15% at a base gold price of $500 per ounce and $8.50 per ounce silver, rising to 40% at $650 per ounce of gold and $12.85 per ounce of silver
- Construction period: 15 months
Project Economics of the Kamila Zone
The Casposo project hosts a mineralized corridor approximately six km long characterised by a low sulphidation vein complex which outcrops principally at the Kamila and Mercado deposits and together comprise the Kamila Zone. A decision was made in 2005 to focus drilling and a preliminary assessment at Kamila to test the economic potential of the deposit. Based on results of this work, Intrepid decided in late 2005 to proceed to feasibility while continuing to evaluate the remaining five km of the Casposo structure.
The results do not include Southeast Inca, Southeast Extension and Julieta Zones, all of which require further drilling to expand resources in proximity to the proposed development.
Based on the feasibility study (effective date February 2007) key assumptions, project parameters and a base gold price of $500 per ounce and $8.50 per ounce for silver, an internal rate of return (IRR) after taxes of the Kamila deposit at Casposo is estimated at 15 percent as highlighted in the price sensitivity analysis below. At recent metal prices the IRR ranges up to 40 percent at $650 per ounce of gold and $12.85 per ounce of silver. A range of sensitivities to commodity prices are provided below. Project Economics - IRR