Aurania Resources Ltd V.ARU

News - 43-101 IR res est

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TORONTO, ONTARIO--(Marketwire - Oct. 4, 2007) - Aurelian Resources Inc. (TSX:ARU) today announced the first National Instrument 43-101-compliant, inferred mineral resource estimate for Fruta Del Norte (FDN), a buried epithermal gold-silver discovery on its wholly-owned Condor Project in south-eastern Ecuador. An initial inferred resource of 58.9 million tonnes grading 7.23 g/t gold (Au) and 11.8 g/t silver (Ag) for 13.7 million ounces of contained gold and 22.4 million ounces of contained silver was determined at a cut off grade of 2.3 g/t gold-equivalent. The company also announced preliminary metallurgical testing has confirmed that gold recoveries in the order of 85-95% can be obtained using well-proven gold-silver recovery processes. The table below summarises the resource estimate at a 2.3 g/t(4) Au equivalent cut-off grade: --------------------------------------------------------------------------- Au Ag Au Eq (3) Au Ag Au Eq Metric Grade Grade Grade Contained Contained Contained Zone tonnes (t) (g/t) (g/t) (g/t) Ounces Ounces Ounces --------------------------------------------------------------------------- FDN 1 31,600,000 7.43 13.7 7.65 7,548,600 13,918,700 7,773,500 --------------------------------------------------------------------------- FDN 2 15,500,000 7.31 10.6 7.48 3,642,800 5,282,400 3,728,100 --------------------------------------------------------------------------- FDN 3 1,000,000 12.36 9.9 12.53 397,400 318,300 403,000 --------------------------------------------------------------------------- FDN 4 10,800,000 6.05 8.2 6.18 2,100,700 2,847,300 2,147,000 --------------------------------------------------------------------------- Total 58,900,000 7.23 11.8 7.42 13,689,500 22,366,700 14,051,600 --------------------------------------------------------------------------- (1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. (2) The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource. It is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category. (3) Au equivalent ounces were calculated on the basis of US$550/oz Au, US$10/oz Ag, 90% Au recovery, 80% Ag recovery which combine for an Au Eq ratio of 61.9 grams Ag equals 1 gram Au. (4) The 2.3 g/t Au equivalent cut-off grade utilized to report the resource was derived from a mining cost of US$24/tonne, process cost of US$11.50/tonne and a G&A cost of US$1.50/tonne which combine for an overall site cost of US$37/tonne. The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005. "13.7 million ounces of gold is an outstanding achievement for an initial inferred resource on a discovery made a mere 17 months ago. We are confident that the quality of the FDN resource in terms of grade and continuity will support a fast track approach to developing this tremendous deposit," said Patrick F.N. Anderson, Aurelian's President and CEO. "We will be discussing these results and our early-stage development plans with the Ecuadorian government over the coming months and look forward to working with them and our local communities to bring FDN into production under the highest social and environmental standards." Mr. Anderson concluded, "Our goal is to add to Aurelian's value by concurrently bringing the FDN deposit into production while adding to the resource. In addition, we will be accelerating our follow up on the more than 30 other gold targets on our Condor property with the objective of finding other world class deposits". George Bee, Aurelian's COO commented, "It is still early days but we have a clear vision for the first stage of development of FDN. We want this project to set the standard for responsible large-scale mining in Ecuador. We envision a mine with a small footprint that benefits local communities and makes a major contribution to the advancement of Ecuador." Notes on the methodology of estimation of the inferred resource: - The inferred resource estimate was carried out by Micon International Limited (Micon) and P&E Mining Consultants Inc (P&E). - The database comprised a total of 85 drill holes, 45,051 metres of drilling and 22,942 gold assays. - The inferred resource covers the area between lines 9582650N to 9583950N a distance of approximately 1,300 metres. - An interpreted mineralised envelope was modeled into a wireframed solid in Gemcom, with four internal mineralised zones (FDN1 through 4). Approximate dimensions of the envelope were 1,300 metres in length (north-south), 80 to 200 metres in width (east-west), and up to 400 metres in vertical extent. - Estimates are based on a Parent Cell dimension of 4 metres E, 25 metres N and 10 metres vertically. - Grade interpolation was based on 2.0 metre composites cut to a maximum of 235 g/t Au for FDN1, 105 g/t Au for FDN2, 80 g/t Au for FDN3, and 42 g/t Au for FDN4. For FDN1 the composites were cut. For FDN2, 3 and 4 raw assays were cut prior to compositing. - Tonnage estimates are based on 590 bulk density measurements carried out by Aurelian which were interpolated into the block model. Bulk density values for the FDN mineralised rock range from 2.14 to 3.01 tonnes/m3. - The resource at a 2.3 g/t Au equivalent grade was reported within a preliminary conceptual stope mining envelope with the purpose of delineating mineralisation with a reasonable prospect of economic extraction. Mr. B. Terrence Hennessey, P.Geo., of Micon, Mr. Richard Gowans, P.Eng., of Micon, Mr. Eugene Puritch, P.Eng., of P&E Mining Consultants Inc. and Mr. Stephen Leary (MAusIMM), Aurelian's Exploration Manager, will be the authors of an NI 43-101-compliant Technical Report on the Mineral Resource Estimate for the FDN deposit, to be filed within 45 days of this news release. They are Qualified Persons in accordance with NI 43-101, and are responsible for the information presented in this news release. Messrs. Hennessey, Puritch and Gowans are independent of Aurelian as defined by NI 43-101. Metallurgy Micon has reported that a review of the preliminary metallurgical testing carried out under its direction by SGS Lakefield Research (SGS) has confirmed that overall gold recoveries in the range of 85-95% could be obtained using a process combining gravity separation of coarse free gold, followed by flotation and gold recovery by Carbon in Leach (CIL). The flotation concentrate, which is composed primarily of gold-bearing pyrite, would be treated by pre-oxidation followed by CIL. Preliminary testwork has shown that the flotation concentrate is amenable to pre-oxidation by both bacterial oxidation (BiOx) and pressure oxidation (POx). With little or no carbon or base metal content, indications are that there should be little need to stray from a conventional and well proven gold-silver recovery process. Metallurgical testing was initially carried out on one sample from each mineralised zone, with sample weights ranging from 16 to 50 kilograms. A second phase of testing was conducted on a single 45 kilogram composite sample weighted to represent the entire FDN deposit. Drill core with visible gold was deliberately excluded from the metallurgical testing in order to avoid biasing these relatively small preliminary samples. A dedicated drilling program is being designed to collect several tonnes of mineralised material from FDN for additional metallurgical testing aimed at optimising the process flow sheet and determining capital and operating costs for the proposed mill. In parallel with the metallurgical work, Golder Associates Ltd. (Golder) has been carrying out a study of the various alternatives for tailings management, and will be generating a preliminary list of potential tailings sites to complement work aimed at establishing the location of proposed mine facilities. Development Preliminary mine planning and engineering studies have been underway since early August when George Bee joined Aurelian as Chief Operating Officer. Currently the following studies are ongoing: - Preliminary and conceptual mine planning - Environmental baseline - Engineering studies for power generation - Geotechnical drilling - Hydrology - Metallurgy and flow sheet development A permit application for an access decline to FDN is being prepared, which will allow additional definition drilling to take place quickly and accurately from underground. It will also allow bulk sampling of the deposit and can be incorporated into the mine development. The current plan is to submit for permitting a decline extending approximately 3.5 kilometres from surface at gradients of between -13 and -15%. The excavated dimensions of the decline will be approximately 5 metres in width by 5 metres in height and will allow access of exploration and production equipment. Several above-ground rigs will remain on FDN as part of a focused infill drilling program on the central, highest-grade portion of the deposit (between lines 9853300N and 9853600N) to rapidly advance it to production at the same time the decline is being developed. FDN Deposit and QA-QC Details The FDN deposit is interpreted to be an intermediate sulphidation epithermal gold-silver system. The deposit is buried by basin infill sediments (Suarez Formation) of Jurassic age within a pull-apart basin. The hydrothermal system is characterised by a combination of multiphase quartz-carbonate-sulphide stock work veining and hydrothermal brecciation within intensely silicified andesitic volcanic rocks that underlie the basin. Drilling of the FDN deposit has outlined a mineralised envelope that is traceable continuously for over 1,300 metres along strike and dips moderately westward through to vertical with an eastern contact that dips steeply to the east, south of 9583500N. Drill holes intersect this envelope at an angle and therefore drill hole intercept widths reported for FDN are not true widths. Samples that consist of half HQ, NQ, NTW and BTW-size diamond core are split by diamond saw on site, prepared at the ALS Chemex laboratory in Quito, and have been assayed by 50 gram fire assay with an ICPAES, AAS or gravimetric finish at the ALS Chemex Vancouver or Lima Laboratories. The quality assurance-quality control (QA-QC) program of Aurelian includes the insertion of certified standards of known gold content every 20 samples, blanks at least every 20 samples and field or lab duplicates every 20 samples. Samples from significant drill intercepts are sent to two additional laboratories to verify gold and silver analyses. Metallic screen fire analyses for gold are also regularly run as additional QA-QC checks. The remaining half core is retained for verification and reference purposes. Stephen Leary (MAusIMM), Aurelian's Exploration Manager, is acting as the in-house Qualified Person (QP) in compliance with National Instrument 43-101 with respect to QA-QC issues in this release. Terrence Hennessey and Eugene Puritch are the independent QPs responsible for the mineral resource estimate and Richard Gowans is the independent QP responsible for metallurgy. They have reviewed the contents of this release for accuracy. Webcast and Conference Call Aurelian will be hosting a conference call today at 11 a.m. (Eastern) to discuss the initial inferred resource and metallurgy. Patrick Anderson, President and CEO, George Bee, COO and Tim Warman, VP of Corporate Development will be available to answer questions during the call. To participate in the call, please dial 416-644-3416 or 1-800-733-7560. An archived recording of the call will be available at 416-640-1917 (passcode 21248699 followed by the number sign) from 1:00 p.m. today to 11:59 p.m. on October 11th. A live audio webcast of the conference call and simultaneous slides will be available at https://w.on24.com/r.htm?e=95348&s=1&k=6A357BA39F19E9C7DEF64695982668F0 or www.newswire.ca. The archived recording of the webcast will be available at www.aurelian.ca. About Aurelian Aurelian Resources Inc. is a publicly-listed (TSX:ARU) resource company engaged in the business of exploring, discovering and developing mineral wealth in Ecuador. The Fruta del Norte discovery lies at the heart of the Condor Project properties, located in south-eastern Ecuador and consisting of 38 mining concessions totaling approximately 95,000 hectares. Aurelian is committed to working with the government and people of Ecuador to achieve a modern, sustainable mining industry, which will play an important role in the future growth of the country. Visit www.aurelian.ca for more information. Forward Looking Statement Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralisation and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. FOR FURTHER INFORMATION PLEASE CONTACT: Aurelian Resources Inc. Patrick F. N. Anderson President & CEO [phone] Email: [e-mail] or Aurelian Resources Inc. Marla Gale Investor Relations [phone] Email: [e-mail] Website: www.aurelian.ca