Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL;
TSX: SLR) is pleased to announce the initial NI 43-101 compliant
resource estimate for its high-grade Bongará zinc project in northern
Peru. The Mineral Resource Statement and Technical Report was prepared
on behalf of Solitario by SRK Consulting (U.S.) Inc. (“SRK”), an
independent and internationally recognized mining engineering firm. SRK
verified and validated a comprehensive resource model previously
developed by Solitario’s joint venture partner, Votorantim Metais
(“Votorantim”). The full Technical Report has been filed on SEDAR and
can be accessed here.
Highlights of the Bongará Resource Estimate:
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Measured and Indicated Resources total approximately 2.8 million
tonnes grading 13.0% zinc; 1.9% lead and 19.3 g/t silver; or 15.5%
zinc equivalent
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Inferred Resources total approximately 9.1 million tonnes grading
10.9% zinc, 1.2% lead and 12.2 g/t silver; or 12.4% zinc equivalent
The resource was reported using Net Smelter Return (NSR) cutoff grades
by material type determined by current metals prices (zinc and lead -
$0.95/lb. and silver $20/oz.) and projected mining, processing,
transport and smelting costs. The resource reported in this statement is
contained within a footprint of drilling of approximately one by three
kilometers, with opportunities for expansion through infill and step-out
exploration both laterally and vertically.
Chris Herald, President and CEO of Solitario, stated, “We are extremely
pleased with the results of this initial resource estimate for Bongará.
It clearly demonstrates the high-grade nature of the Bongará deposit and
confirms our belief that Bongará is an important new zinc deposit at a
time of declining zinc production with many analysts forecasting zinc
prices to rise over the next several years. This report also provides
our shareholders and the investment community a much clearer basis to
evaluate the quality of this asset and the potential value it holds for
Solitario. We want to acknowledge the solid exploration and engineering
work that our partner, Votorantim, has completed over the past several
years.”
Zinc mineralization occurs as a Mississippi Valley Type (“MVT”) deposit
and is contained in carbonate rocks of the Pucara rock formation, the
host-rock for the many of Peru’s zinc mines. Peru is the third largest
zinc producing country in the world. The Bongará resource estimate was
based on a database that includes drilling campaigns of two different
companies. A total of 82 drill holes were completed by Cominco totaling
24,781 meters drilled from 1997 to 2000, and 404 drill holes completed
by Votorantim including 92,499 meters drilled from 2006 to 2013. The
drill data were verified and validated by SRK in compliance with NI
43-101 guidelines. Additional project information is found at http://www.solitarioxr.com/bongara.php.
The Mineral Resource Statement for the Bongará Zinc project is presented
in Table 1. Cutoff grades and their derivation are provided in the
resource table notes.
Table 1: Mineral Resource Statement for the Bongará Zn-Pb-Ag Deposit,
Amazonas Department, Peru, SRK Consulting (U.S.), Inc., June 05, 2014
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Category
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Mass
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Grade
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Contained Metal (millions)
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Zn
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Pb
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Ag
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ZnEq
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Zn
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Pb
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Ag
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ZnEq
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Mt
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%
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%
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g/t
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%
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(lbs)
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(lbs)
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(oz)
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tonnes
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(lbs)
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Measured
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1.43
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13.02
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1.85
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19.3
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15.45
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410.0
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58.3
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0.884
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0.221
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486.5
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Indicated
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1.35
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12.51
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1.71
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17.1
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14.74
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372.6
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50.9
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0.744
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0.199
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438.8
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Measured + Indicated
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2.78
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12.77
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1.78
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18.2
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15.10
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782.5
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109.2
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1.628
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0.420
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925.3
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Inferred
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9.07
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10.87
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1.21
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12.2
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12.44
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2,173.0
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241.5
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3.554
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1.130
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2,487.6
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Source: SRK, 2014
Notes:
1. Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or any
part of the Mineral Resources estimated will be converted into Mineral
Reserves;
2. Mineral resources are reported to a Net Smelter Return
zinc-equivalent (ZnEq%) cut-off grade based on metal price assumptions*,
metallurgical recovery assumptions**, mining costs, processing costs,
general and administrative (G&A) costs, and NSR factors***. Mining
costs, processing, G&A, and transportation costs total US$51.30/t.
i. *Metal price assumptions considered for the calculation of metal
equivalent grades are: Zinc (US$/lb 0.95), Lead (US$/lb 0.95) and Silver
(US$/oz 20.00),
ii. **Cut-off grade calculations assume variable metallurgical
recoveries as a function of grade and relative metal distribution.
Average metallurgical recoveries for sulfide and oxide respectively are:
Zinc (93.1%, 73%), Lead (84.8, 0%) and Silver (55.6%, 0%)
iii. *** NSR factors for calculating cutoff grades were: ZnEq% = Zn% * 1
+ Pb% * 0.74 + Ag g/t * 0.02
3. Resulting cutoff grades used in this resource statement
were 4.1% ZnEq for sulfide, 5.0% ZnEq for oxide, and 4.5% ZnEq for mixed
material types.
4. Zinc equivalency for reporting in situ contained metal resources
above was calculated using: ZnEq (%) = Zn (%) + 1.0 * PB (%) + 0.03 * Ag
(g/t).
5. Density was calculated based on material types and metal grades. The
average density in the mineralized zone was 2.91 g/cm3 as a
function of the zinc and lead sulfide mineral content.
6. Mineral Resources as reported are undiluted.
7. Mineral resource tonnage and contained metal have been rounded to
reflect the precision of the estimate, and numbers may not add due to
rounding.
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.
An important component of SRK’s Technical Report was to differentiate
three types of mineralization present within the Bongará deposit defined
to date. These are sulfide, mixed and oxide zinc mineralization. Sulfide
mineralization dominates the currently estimated resources totaling
approximately 63% of the resource, with oxide accounting for 28% and
mixed resources making up the remaining 9%. In addition, SRK has
acknowledged a significant amount of technical work completed by
Votorantim, which has advanced the Project well into
prefeasibility-level of study in some areas of development.
The Bongará Technical Report and Resource Statement was prepared by SRK
Consulting (U.S.), Inc. and provides a classification of resources in
accordance with the Canadian Institute of Mining, Metallurgy and
Petroleum Standards on Mineral Resources and Mineral Reserves:
Definitions and Guidelines, November 27, 2010. This release has been
reviewed for accuracy by Mr. J. B. Pennington of SRK and for Solitario
by Walter Hunt, Chief Operating Officer of Solitario, both of whom are
“qualified persons” as that term is defined in NI 43-101. Samples are
derived from 50% splits of HQ and NQ (2.5 and 1.9 inch) diameter core.
Samples are then shipped via secured third-party land and air
transportation companies and analyzed by ALS Chemex Inc., North
Vancouver, Canada, an ISO9002 registered company.
Terms of the Bongará Joint Venture with Votorantim Metais
Votorantim has funded 100% of project expenditures since inception of
the joint venture in 2006. Votorantim can earn up to a 70% interest in
the project by continuing to fund all project expenditures and
committing to place the project into production based upon a positive
feasibility study. After earning 70%, Votorantim has further agreed to
finance Solitario's 30% participating interest for construction.
Solitario will repay the loan facility through 50% of its net cash flow
distributions.
About Votorantim Metais
Votorantim Metais belongs to a privately held Brazilian business
conglomerate that is a leader in every market segment in which it
operates, including cement, pulp and paper, metals, chemicals, orange
juice, and finance. The metals business division accounted for
approximately one third of Votorantim’s consolidated revenues from
production of zinc, nickel, steel and aluminum. Votorantim is the
world's fifth largest primary zinc producer with three operating zinc
smelters and two operating zinc mines. It owns the Cajamarquilla zinc
smelter and is the majority shareholder of Milpo, both located in Peru.
Votorantim also has operations in the United States and China.
About Solitario
Solitario is a gold, silver, platinum-palladium, and base metal
exploration and royalty company actively exploring in Brazil, Mexico,
and Peru. Solitario’s main focus is on permitting, financing and
constructing the Mt. Hamilton gold project in Nevada. Solitario controls
an 80% interest in Mt. Hamilton and its joint venture partner, Ely Gold,
controls the remaining 20% interest. Besides Solitario’s joint venture
with Votorantim, Solitario also has significant business relationships
with 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.
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 a mining plan, if any, at Bongará; the potential
for confirming, upgrading and expanding zinc, lead and silver
mineralized material at Bongará; future operating and capital cost
estimates may indicate that the stated resources may not be economic;
estimates of zinc, lead and silver grades provided are not diluted
mining grades and the predicted or actual mining grade could be
substantially lower; estimates of recovery rates for the three types of
mineralization, sulfide, oxide and mixed could be lower than estimated
for establishing the cutoff grade; and other statements that are
not historical facts; risks associated with our funding partner’s
(Votorantim Metais) ability to finance continued development and
potential construction of the Bongará project. 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 zinc, lead and silver; the inherently
hazardous nature of mining-related activities; uncertainties concerning
reserve and resource estimates; availability of outside contractors in
connection with Bongará and other activities; uncertainties relating to
obtaining approvals and permits from governmental regulatory authorities
and country risks of operations outside of the United States; 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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