Anyone care to comment on this fine news ?Andina's Volcan at 9.8 million ounces Au M+I
2009-09-10 19:31 ET - News Release
Mr. George Bee reports
ANDINA INCREASES MEASURED & INDICATED RESOURCES AT VOLCAN GOLD PROJECT
Andina Minerals Inc. has released results of an independent NationalInstrument 43-101-compliant mineral resource update completed by MiconInternational Ltd. for Andina's wholly owned Volcan gold project inChile. The resource update reports measured and indicated resources of9.8 million ounces of gold at an average grade of 0.62 gram per tonne(g/t) gold based on the following parameters: mining costs of $1.10(U.S.) per tonne, process cost (heap leach) of $3 (U.S.) per tonne,general and administration costs of 69 U.S. cents per tonne, processrecoveries ranging from 55 to 80 per cent, recommended slope anglesranging from 48 to 52 degrees and a gold price of $850 (U.S.) perounce.
This 2009 mineral resource estimate, commissioned in support ofthe conceptual development plan, compares favourably with the 2008mineral resource estimate. An NI 43-101-compliant technical report forthe 2009 update is currently being prepared and will be filed on SEDARwithin 45 days of this news release.
COMPARISON OF 2009 MINERAL RESOURCE AND 2008 MINERAL RESOURCE
Tonnes Grade Ounces
(millions) (g/t Au) (000s) Cut-off grade
2008 total measured
and indicated 464.3 0.63 9,402 0.3 g/t Au
2009 total measured
and indicated 492.5 0.62 9,773 approx. 0.3 g/t Au
2008 total measured
and indicated 241.7 0.85 6,620 0.5 g/t Au
2009 total measured
and indicated 244.8 0.88 6,901 0.5 g/t Au
2008 total inferred 223.6 0.60 4,350 0.3 g/t Au
2009 total inferred 36.8 0.65 768 approx. 0.3 g/t Au
2008 total inferred 95.4 0.90 2,760 0.5 g/t Au
2009 total inferred 17.7 0.98 557 0.5 g/t Au
Notes:
(1) 2008 and 2009 resource comparisons exclude Ojo de Agua inferred
resource;
(2) 0.5 g/t cut-off comparisons are on global geologic resource estimates
(not pit constrained);
(3) 2009 update calculated using parameters discussed above. 2008 resource did
not use these parameters.
"We are very pleased with this confirmation that themajority of the ounces discovered to date at Volcan are potentiallyeconomic based on our forecasted parameters and represent anopportunity for long-term development and value creation," said GeorgeBee, president and chief executive officer of Andina. "Our goal is torapidly realize value for Andina shareholders by driving Volcan towarddevelopment during this period of demand for manageable projects thatcan be delivered during the current gold cycle."
Mr. Bee commented: "The 2009 update gives us a good overview ofthe resource that could form the basis of a mine. Meanwhile, we arecontinuing with our conceptual development plan and preliminaryeconomic analysis studies to examine development options, with a focuson an initial higher-grade portion of the resource with the expectationof generating a robust project. With such a large mineral resource inthe open pit and drilling data pointing to the potential for locatingadditional mineral resources below the pit, we are taking a littleextra time to define the conceptual development plan, now slated forrelease in early 2010. These studies do not address the significantexploration potential that exists in and around the Volcan goldproject, which will be the subject of future updates."
Micon 2009 update
The 2009 update estimates measured and indicated mineralresources of 492.5 million tonnes at an average grade of 0.62 g/t goldfor 9.8 million ounces of contained gold and inferred resources of 36.8million tonnes at an average grade of 0.65 g/t gold for 768,000 ouncesof contained gold. The effective date of the 2009 update is Sept. 10,2009. The 2009 update incorporates approximately 6,000 metres of newinfill drilling and departs from the 2008 resource (see the NI 43-101technical report dated Sept. 2, 2008) by employing variable cut-offgrades (roughly equivalent to a cut-off of 0.3 g/t gold) supported byrecent engineering results, compared with a cut-off of 0.5 g/t goldused for the "highlighted" estimate in the 2008 resource, which wasselected without the benefit of engineering studies. When the tworesources are compared at a cut-off grade of 0.3 g/t gold, measured andindicated resources increased by 4 per cent, while the inferredresources decreased by 86 per cent.
The conceptual development plan (CDP) and preliminary economicassessment (PEA), which commenced in March, 2009, and are now due forcompletion in early 2010, have provided Micon with sufficientpreliminary data to better determine the potentially economicallyextractable gold under current market conditions. To underpin theresource determination, engineering consultants have provided interimpit slope angles (Vector Engineering), process operating cost estimates(Hatch), mining cost estimates (Micon and Q'Pit) and updatedmetallurgical gold recovery assumptions for the different parts of thedeposit (Hatch, AMTEL, McClelland). These and other parameters havebeen used in 3-D Whittle pit optimization run at a gold price of $850(U.S.) per ounce. The updated mineral resources for the Volcan goldproject are presented in the attached table.
2009 MINERAL RESOURCE ESTIMATE FOR THE VOLCAN
GOLD PROJECT (DORADO DEPOSITS)
Measured
Tonnes Grade Ounces
Area (millions) (g/t Au) (000s)
Dorado West 173.8 0.62 3,442
Dorado Central 2.1 1.04 70
Dorado East 27.1 0.65 563
----- ----- -----
Total 203.1 0.62 4,076
Indicated Total M+I
Area Tonnes Grade Ounces Tonnes Grade Ounces
(millions) (g/t Au) (000s) (millions) (g/t Au) (000s)
Dorado West 288.0 0.61 5,669 461.9 0.61 9,112
Dorado Central 0.4 0.85 10 2.5 1.01 80
Dorado East 1.1 0.54 19 28.2 0.64 582
----- ----- ----- ----- ----- -----
Total 289.4 0.61 5,698 492.5 0.62 9,773
Inferred
Area Tonnes Grade Ounces
(millions) (g/t Au) (000s)
Dorado West 36.5 0.65 764
Dorado Central 0.1 0.81 2
Dorado East 0.2 0.35 2
----- ----- -----
Total 36.8 0.65 768
1. All quantities are rounded to the appropriate number of significant
figures, consequently sums may not add due to rounding.
2. Mineral resources include mill incremental material.
3. 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.
4. 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 the
upgrading of the inferred resources into an indicated or measured mineral
resource category.
5. The cut-off grade is approximately 0.3 g/t gold.
PEA studies
The new resource data demonstrate the scale of the Volcan goldproject's Dorado resources as they are currently understood. Theinitial Volcan exploitation will be planned around a smaller,higher-grade portion of the resource with the expectation of generatinga robust project. The CDP will retain the option of expanding theproject scope to include the remaining mineral resources at a laterdate. Initially the CDP and PEA analysis are focussing on an analysisof the potential mining model shown in the attached table.
POTENTIAL MODEL FOR INITIAL VOLCAN DEVELOPMENT
Mine life 11-13 years
Throughput 55,000-65,000 tonnes per day
Processing method Heap leach
Average grade 0.67-0.70 g/t Au
Recovery approx. 70%
Strip ratio 2:1
Based on the 2009 update, it appears that additionalDorado mineralization can be found at depths greater than the pitshell. Andina commissioned a study beginning in August to consider thepossibility of extracting the additional mineralization at depth usinglow-cost bulk underground mining methods along with a trade-off studyof where open pit mining should optimally end and underground miningcommence. Chilean mining consultant, NCL, was given gold recovery andprocess cost parameters for a smaller gold mill scenario and tasked toassess the potential for bulk underground mining beyond the maximumconceivable open pit mining solution. Preliminary results show that theadditional mineralization can potentially be economically extractedusing a sublevel caving bulk underground mining technique. The deepermineralization, being not as well understood due to a relative paucityof deep exploration drill data, is not reported as mineral resources atthis stage until the nature and extent of this mineralization and itsmining potential is better understood through completion of furtherexploration activities. The work to date shows compelling evidence tosupport the notion that additional mineralization can be exploited atdepth.
Resource estimation methodology
The data and methodology utilized for the 2009 update are as follows:
- The database consists of 96,000 metres of drilling including a total of 282 drill holes, with approximately 6,000 metres completed during the H1 2009 field season. The drill program focused on priority areas on the Dorado Central and Dorado West areas of the Volcan gold project.
- Resource comparison: the 2008 resource estimate using a fixed cut-off grade compared with the 2009 resource estimate using a floating cut-off grade and additional engineering information are not comparable. The basis of the estimate has changed and the tables above seek to inform the reader of the economic potential of the resource while showing the headline numbers in the public domain from previous estimates.
- Gold price: for purposes of establishing the resource, $850 (U.S.) per ounce has been selected.
- Technical and operating assumptions: engineering work in support of the CDP and PEA is continuing and is targeted for completion in early 2010. Significant advances have been made by several consultants and preliminary assumptions and parameters from the studies have been incorporated into the resource estimate presented. Micon has either derived input assumptions based on industry practice or reviewed and adopted parameters estimated by others.
- Canadian securities reporting compliance: prior Andina mineral resource estimates have been certified by Michael Easdon, a consultant to Andina who acted as a qualified person. For the 2009 update, Micon was retained to audit and certify that the resource estimate for the Volcan gold project conforms to the NI 43-101 standards. Micon has access to expertise in various mineral industry disciplines and is an established and recognized mineral industry consulting firm. In generating the Volcan gold project resource update, Micon has had free access and latitude for oversight and direction of the work supporting the estimate.
- The 2009 update inferred resource total does not incorporate the Ojo de Agua inferred resource from the October, 2008, resource estimate for the Ojo de Agua area certified by Mr. Easdon, as no material changes have occurred with respect to this deposit since completion of that estimate. At a cut-off grade of 0.5 g/t gold, the Ojo de Agua area was estimated to contain an inferred resource of 18.6 million tonnes grading 0.85 g/t gold for total contained gold content of 510,000 ounces. Mr. Easdon will remain the qualified person for this inferred resource.
NI 43-101 compliance and quality assurance
The technical information in this news release has been preparedin accordance with Canadian regulatory requirements set out in NI43-101 and reviewed by Mr. Bee, president and chief executive officerof Andina, and Richard Gowans, PEng, Sam Shoemaker, MAUSIMM, and RenoPressacco, PGeo, of Micon International, each of whom is an independentqualified person under NI 43-101.
We seek Safe Harbor.