Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT:XPL;
TSX:SLR) and Ely Gold & Minerals (“Ely Gold;” TSX.V:ELY)
are pleased to announce an updated resource estimate and favorable
metallurgical testing results on the Mt. Hamilton gold project in
eastern Nevada, U.S.A. A new NI-43-101 compliant Mt. Hamilton resource
estimate was completed incorporating both the Centennial and Seligman
gold and silver deposits. The resources for these two deposits were
previously reported separately; however, drilling completed in 2012
suggests that these two mineralized zones are a single deposit and could
be potentially mined by a single pit. The recently completed
metallurgical testing on the Seligman area oxide mineralization has
shown similar column leach gold recoveries and moderately enhanced
silver recoveries compared to the Centennial area mineralization. This
2013 resource estimate was prepared on behalf of Solitario by SRK
Consulting (U.S.) Inc. (“SRK”) and serves to update the previous
resource estimate for the Mt. Hamilton Project stated in the most recent
October 25, 2012 Technical Report.
The updated Mount Hamilton resource estimate was constrained by a
potentially mineable optimized pit using a gold price of $1,500 per
ounce of gold and $25.00 per ounce of silver. The in-pit Measured and
Indicated Resource, at a cutoff grade of 0.006 ounces per ton gold,
contains approximately 791,000 ounces of gold equivalent (“AuEq”) using
a 60:1 silver-to-gold ratio. An additional Inferred Resource totaling
approximately 207,000 AuEq ounces is also estimated within the optimized
pit. Previously reported Mineral Reserves for the Centennial deposit are
fully contained within, and are not additional to the Mineral Resources
stated in the table below.
Mineral Resource Statement, Mount Hamilton Gold-Silver Deposit,
|
White Pine County, Nevada, September 19, 2013
|
Resource Category
|
|
Tons
millions
|
|
Gold Grade
|
|
Silver Grade
|
|
AuEq
|
|
Contained Ounces
(thousands of oz.)
|
|
|
|
Oz/Ton
|
|
g/Tonne
|
|
Oz/Ton
|
|
g/Tonne
|
|
Oz/Ton
|
|
Gold
|
|
Silver
|
|
AuEq
|
Measured
|
|
1.43
|
|
0.029
|
|
0.99
|
|
0.21
|
|
7.17
|
|
0.032
|
|
42.1
|
|
298.3
|
|
47.1
|
Indicated
|
|
30.45
|
|
0.021
|
|
0.72
|
|
0.19
|
|
6.62
|
|
0.024
|
|
645.6
|
|
5,889.60
|
|
743.8
|
Measured + Indicated
|
|
31.88
|
|
0.022
|
|
0.75
|
|
0.19
|
|
6.65
|
|
0.025
|
|
687.7
|
|
6,187.90
|
|
790.8
|
Inferred
|
|
10.33
|
|
0.017
|
|
0.58
|
|
0.16
|
|
5.62
|
|
0.020
|
|
178.8
|
|
1,685.90
|
|
206.9
|
-
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that any part
of the Mineral Resources estimated will be converted into Mineral
Reserves estimate;
-
Resources stated as contained within a potentially economically
minable open pit; pit optimization was based on assumed gold and
silver prices of US$1,500/oz and US$25.00/oz, respectively, effective
heap leach recoveries of 79.3% for gold, and 39.3% for silver, an
average ore mining and a processing cost of US$6.04/t; and pit slopes
of 50°;
-
Resources are reported using a 0.006 ounce per short ton gold cutoff
grade;
-
Gold Equivalent (AuEq) was calculated using a Ag:Au ratio of 60:1; and
-
Numbers in the table have been rounded to reflect the accuracy of the
estimate and may not sum due to rounding.
Gold and silver mineralization is hosted in moderate to strongly
oxidized calc-silicate skarn and hornfels and altered granodiorite. The
new Mt. Hamilton resource estimate was based --on 857 drill holes with
an average hole depth of 396 ft for a total of 317,739 ft of drilling.
The drill data were verified and validated by SRK in compliance with
NI-43-101 requirements. This consolidated Mt. Hamilton resource estimate
includes 60 new infill drill holes that converted earlier Inferred
Seligman resources to the Indicated category, while also expanding the
Seligman resource.
This resource estimate utilizes lower gold and silver price assumptions
($1,500 versus $1,600 for gold and $25.00 versus $40.00 for silver) than
the previous Centennial resource estimate, and similar gold and silver
price assumptions to those used for the 2012 Seligman estimate. It
should be emphasized that more conservative specific gravity assumptions
were incorporated into this latest resource model in comparison to
previous models based on recently completed, more detailed density
testing.
Solitario is currently working on a new mine plan that considers mining
the Seligman deposit first as it would require less pre-stripping of
waste than previously envisioned in mining only the Centennial deposit.
This could advance initial ore delivery by as much as six months, reduce
working capital costs, modestly increase initial capital costs and
reduce life-of-mine operating costs compared to the 2012 Centennial
Feasibility Study mining plan that did not include Seligman
mineralization. 2013 field work includes drilling two geotechnical core
holes to better design the conveyor adit and vertical ore pass that
connects the Mt. Hamilton open pit operations to the heap leach
facilities. Figures showing the new resource model for the combined
Seligman - Centennial resource can be accessed at http://www.solitarioxr.com/art/Seligman-CentennialResourceModel.pdf.
Additional project information is found at http://www.solitarioxr.com/hamilton.html.
Chris Herald, President and CEO of Solitario, stated, “With this
increase in our resource base, the project is now at the million ounce
threshold of contained gold-equivalent mineralization. An updated
reserve estimate and an expanded mine plan will be initiated in the
fourth quarter. The objective is to increase the production rate and
mine life from the eight-year 8,500 tpd plan developed in the 2012
Feasibility Study to a 10,000 tpd production profile with a nine or
ten-year mine life.”
Trey Wasser, Ely Gold’s President and CEO, stated, “All the building
blocks necessary to permit, finance, design and construct the Mt.
Hamilton gold project are falling into place on schedule. We are pleased
with our solid progress on the permitting front and Mt Hamilton LLC
remains fully financed through 2014.”
Cautionary Note to U.S. Investors concerning estimates of Resources:
This news release uses the terms “Measured, Indicated and Inferred
Resources.” The Company advises U.S. investors that while these terms
are recognized and required by Canadian regulations, the SEC does not
recognize the terms. U.S. investors are cautioned not to assume
that any part or all of Measured or Indicated Mineral Resources will
ever be converted into Reserves. Inferred Resources have a great
amount of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or
any part of an Inferred Mineral Resource will ever be upgraded to a
higher category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. U.S. investors are cautioned not
to assume that any part or all of a measured, indicated or
inferred resource exists, or is economically or legally minable.
Seligman Metallurgical Testing Results
Metallurgical testing of Seligman area oxide mineralization was recently
completed with overall favorable results that were similar to
metallurgical test work on the Centennial ores. In summary, the Seligman
skarn and igneous oxide ores are amenable to cyanidation. Column leach
test results averaged 80 percent for gold and 43.6 percent for silver,
and are similar to the 2012 Centennial Feasibility Study recoveries of
79 percent for gold and 38 for percent silver. Additionally, projected
recoveries were achieved in 120 days compared to 160 days in the
Feasibility Study. The ¾-inch crush size for leaching recommended in the
2012 Mt. Hamilton Technical Report was also confirmed to be appropriate
for the Seligman ore.
2012 Mt. Hamilton Feasibility Study
The Mt. Hamilton Feasibility Study on the Centennial Deposit updated in
October, 2012 detailed the development of an open pit mining operation
with heap leach processing. The economic base case in the Feasibility
Study assumed a $1,323 life-of-mine gold price and a $25.34 silver
price, generating approximately $226 million in cash flow (operating
margin – EBITDA) over the mine’s anticipated eight-year mine life. The
Feasibility Study estimated life-of-mine cash operating costs on a gold
equivalent basis (at a 55:1 silver to gold ratio) to be approximately
$575 per gold-equivalent ounce recovered (including the costs of a 2.4%
NSR sold after completion of the Feasibility Study). Initial capital
costs were estimated at $71.9 million, including a contingency of $6.3
million. Processing is straight forward with two-stage crushing to minus
¾-inch, no agglomeration and rapid gold leach rates, followed by
conventional ADR (adsorption-desorption-recovery) metal extraction.
Waste to ore stripping ratio was 2.4 to 1.
The Feasibility Study and the Seligman NI-43-101 Seligman resource
estimate were prepared by SRK Consulting (U.S.), Inc., an independent
and internationally recognized consulting firm. The Feasibility Study
provides mineral resource and mineral reserve estimates, and a
classification of resources and reserves in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum Standards on Mineral
Resources and Mineral Reserves: Definitions and Guidelines, November 27,
2010 (CIM). It also meets the standards of the U.S. Securities and
Exchange Commission Industry Guide 7 for estimating and reporting
reserves. This release has been reviewed for accuracy by Mr. J. B.
Pennington of SRK and for Solitario by Walter Hunt, Chief Operating
Officer, both of whom are “qualified persons” as that term is defined in
NI 43-101.
Terms of the Mt. Hamilton LLC Joint Venture
Solitario and Ely Gold formed Mt. Hamilton LLC (“MH-LLC”), a limited
liability company which now holds 100% of the Mt. Hamilton project
assets under an Operating Agreement (“MH-Agreement”). Solitario holds an
80% interest in MH-LLC, and DHI-US. Ely Gold’s wholly owned US
subsidiary, holds a 20% interest in MH-LLC. Further Solitario
obligations include arranging project financing, and making future
property and advanced royalty payments.
About Solitario
Solitario is a gold, silver, platinum-palladium, and base metal
exploration and royalty company actively exploring in Brazil, Mexico,
and Peru. Solitario has significant business relationships with
Votorantim Metais on its high-grade Bongará zinc project in Peru,
Hochschild Mining on its Pachuca Norte silver-gold project in Mexico and
Anglo Platinum on its Pedra Branca platinum-palladium project in Brazil.
Solitario is traded on the NYSE MKT ("XPL") and on the Toronto Stock
Exchange ("SLR"). Additional information about Solitario is available
online at www.solitarioxr.com.
About Ely Gold
Ely Gold is focused on the acquisition and development of gold resources
in Nevada, including its recently acquired Green Springs property, 10
miles south of Mt. Hamilton. Ely Gold is traded on the TSX Venture
Exchange ("ELY"). Additional information about Ely Gold is available
online at www.elygoldandminerals.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking statements within the
meaning of the U.S. Securities Act of 1933 and the U.S. Securities
Exchange Act of 1934, and as defined in the United States Private
Securities Litigation Reform Act of 1995 (and the equivalent under
Canadian securities laws), that are intended to be covered by the
safe harbor created by such sections. Forward-looking statements are
statements that are not historical fact. They are based on the beliefs,
estimates and opinions of the Company's management on the date the
statements are made and address activities, events or developments that
Solitario expects or anticipates will or may occur in the future, and
are based on current expectations and assumptions. Forward-looking
statements involve a number of risks and uncertainties. Consequently,
there can be no assurances that such statements will prove to be
accurate and actual results and future events could differ materially
from those anticipated in such statements. Such forward-looking
statements include, without limitation, statements regarding the
Company’s expectation of the projected timing and outcome of engineering
studies; expectations regarding the receipt of all necessary permits and
approvals to implement the mining plan at Mt. Hamilton; the potential
for confirming, upgrading and expanding oxide gold and silver
mineralized material at Mt. Hamilton; reserve and resource estimates;
operating cost estimates; estimates of gold and silver grades; estimates
of recovery rates; expectations regarding the cash flow generated by the
property; and other statements that are not historical facts. Although
Solitario management believes that its expectations are based on
reasonable assumptions, it can give no assurance that these expectations
will prove correct. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, among others, risks relating to risks that
Solitario’s exploration and property advancement efforts will not be
successful; risks relating to fluctuations in the price of gold and
silver; the inherently hazardous nature of mining-related activities;
uncertainties concerning reserve and resource estimates; availability of
outside contractors in connection with Mt. Hamilton and other
activities; uncertainties relating to obtaining approvals and permits
from governmental regulatory authorities; the possibility that
environmental laws and regulations will change over time and become even
more restrictive; and availability and timing of capital for financing
the Company’s exploration and development activities, including
uncertainty of being able to raise capital on favorable terms or at all;
as well as those factors discussed in Solitario’s filings with the U.S.
Securities and Exchange Commission (the “SEC”) including
Solitario’s latest Annual Report on Form 10-K and its other SEC filings
(and Canadian filings) including, without limitation, its latest
Quarterly Report on Form 10-Q. The Company does not intend to publicly
update any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required
under applicable securities laws.
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