Queenstake preliminary reserves at Magistrral
Queenstake Resources Ltd QRL
Shares issued 30,000,000 Apr 5 close $0.18
Thu 6 Apr 2000 News Release
Mr. Christopher Davie reports
As part of Queenstake's continuing feasibility study, being performed by
Kappes Cassiday and Associates (KCA) of Reno and Pincock Allen and Holt
(PAH) of Denver, a preliminary assessment of minable reserves has been
determined for the Magistral project. The reserves are hosted in four
separate pit areas together with tailings from historic operations at the
site. Reserves have been calculated at a gold price of $300 (U.S.). Proven
and probable reserves for the four areas and tailings are as follows:
Grade
Tonnes g/t Contained Strip
Area (x1,000) Au Ounces Ratio
San Rafael 1,284 2.25 92,900 5.3
Samaniego
Hill 3,145 1.94 195,900 6.5
Sagrado
Corazon 582 1.39 26,000 1.4
Lupita 997 1.37 44,100 4.2
Tailings 166 2.17 11,600 0
Total 6,174 1.87 370,500 5.4
The reserves are considered preliminary as the feasibility study work is
still in progress and may be subject to change as the study is finalized.
The reserves are based on the use and cost of new mining equipment and
owner operation. Queenstake believes that judicious use of used mining
equipment and/or mining contractors will substantially enhance project
economics and its consultants are currently considering such alternatives
as they finalize the study.
The economic analysis is based on a project life of seven years and a
preproduction capital cost of $13.4-million (U.S.) (including working
capital of $0.75-million (U.S.)). Value-added tax on the preproduction cost
totals an additional $1.4-million (U.S.) and is recoverable during the
first year of operation. Additional capital costs through the project life
total $5.99-million, including a recoverable $0.65-million (U.S.) tax
component. Direct cash operating costs are estimated at $7.60 (U.S.) per
tonne of ore and $177 (U.S.) per ounce Au produced. Overall recovery is
projected at 71.7 per cent, and the project breakeven gold price is
estimated to be $254 (U.S.) per ounce.
The overall strip ratio is influenced by the deep high-grade ore zone
recently discovered in the Samaniego Hill area. The reserve in this zone
remains open on strike and at depth. While the resulting deep pit at
Samaniego enhances project economics, the company will consider alternative
methods for the exploitation of these reserves and any possible extensions
thereof. Mining of these reserves and associated waste is scheduled to
commence in the third year of the project life.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
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