News VANCOUVER, British Columbia, March 29, 2019 (GLOBE NEWSWIRE) -- Amerigo Resources Ltd. (TSX: ARG, "Amerigo" or the "Company") is pleased to announce that it has filed a technical report (the “Report”) prepared for Minera Valle Central, S.A. (“MVC”), Amerigo’s Chilean subsidiary.
Robert D. Henderson, P. Eng, President and CEO of Amerigo, is the author of the Report and is responsible for the technical comments related to the resource estimate and its parameters. Mr. Henderson is a "qualified person" for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and has verified the data disclosed in this release. He has also prepared the information that forms the basis for the disclosure in this release, and he has approved the disclosure in this release.
In 2018, MVC produced a record of 65 million pounds of copper. MVC's plant is located approximately 90 kilometres south of Santiago, Chile and has been in operation since 1992. MVC processes tailings from the current production of the El Teniente mine (“Fresh Tailings”) and tailings from the historic Cauquenes tailings deposit. El Teniente is the world’s largest underground copper mine and has been in production since 1904.
MVC’s total inferred mineral resource estimate for the Fresh, Cauquenes and Colihues Tailings and after application of mining and mill recovery losses, is 1,223 million tonnes at a grade of 0.152% Cu and 0.011% Mo with 1,389 million pounds of recoverable copper and 37 million pounds of recoverable molybdenum, as set out in the following tables:
MVC Copper Inferred Mineral Resource Estimate – Dec 31, 2018
| Tailings Deposit | | Tonnes | | Grade | | Mill | | Recoverable | |
| | | | | | | Recovery | | Copper | |
| | | (t) | | (%Cu) | | (%) | | (M lbs) | |
| | | | | | | | | | |
| Colihues | | 98,017,000 | | 0.230 | | 37 | | 184 | |
| Cauquenes | | 270,062,000 | | 0.257 | | 49 | | 749 | |
| Fresh | | 855,625,000 | | 0.110 | | 22 | | 456 | |
| Total | | 1,223,704,000 | | 0.152 | | 34 | | 1,389 | |
| | | | | | | | | | |
MVC Molybdenum Inferred Mineral Resource Estimate – Dec 31, 2018
| | | | | | | | | | |
| Tailings Deposit | | Tonnes | | Grade | | Mill | | Recoverable | |
| | | | | | | Recovery | | Molybdenum | |
| | | (t) | | (%Cu) | | (%) | | (M lbs) | |
| | | | | | | | | | |
| Colihues | | 98,017,000 | | 0.010 | | 17 | | 4 | |
| Cauquenes | | 270,062,000 | | 0.021 | | 19 | | 24 | |
| Fresh | | 855,625,000 | | 0.008 | | 7 | | 9 | |
| Total | | 1,223,704,000 | | 0.011 | | 13 | | 37 | |
| | | | | | | | | | |
In Mr. Henderson’s opinion, there is sufficient geological and economic evidence to conclude that MVC’s contracts with El Teniente for Fresh Tailings plus the historic Cauquenes and Colihues tailings deposits constitute an inferred mineral resource. MVC has a long operating record of economic extraction of copper and molybdenum from Fresh, Cauquenes and Colihues tailings and MVC’s December 2018 development plan demonstrates that the tailings material can be profitably extracted.
Annual production over the initial ten-year period (2019-2028) is estimated to be 85 million pounds of copper per year at a cash cost of production of approximately $1.57/lb Cu, excluding royalties. Royalty payments are estimated to be $0.82/lb Cu at the base case metal prices used in the economic analysis. MVC’s total sustaining capital cost to 2037 is estimated to be $105 million. At a 7% discount rate, the after tax net present value for the Project is estimated to be approximately US$403 million at an assumed long-term copper price of $3.30/lb Cu.
The results of the preliminary economic assessment represent forward-looking information that is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such information. This information speaks only as of the date of this Technical Report and is based on a number of assumptions which are believed to be true but which may prove to be incorrect in future. The preliminary economic assessment is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
In Mr. Henderson’s opinion, the data supporting the inferred mineral resource estimates were appropriately collected, evaluated and estimated, and the objective of identifying tailings mineralization that could potentially support future processing operations has been achieved.