Corner Bay Minerals Inc. - New Study Expands
Resources/Reserves @ Alamo Dorado Silver/Gold
Project
Toronto, Ontario
Peter Mordaunt, President, CEO and Qualified Person of Corner Bay Minerals Inc. (``Corner Bay'') is pleased to announce
that the Company has received an updated resource and reserve pre-feasibility study (the ``Mintec Report'') on the Alamo
Dorado Property located in Sonora, Mexico from independent mining consultant, Mintec, inc. (``Mintec'') of Tucson, Arizona.
This new report is follow-up to the recent drill program and ongoing metallurgical work. With Mintec reporting a new resource
containing approximately 143 million equivalent silver ounces (Table 1) and a mineable heap leach reserve containing 129
million equivalent silver ounces (Table 2), the contained gold and silver have expanded significantly.
The Mintec Report independently confirms that the Alamo Dorado Property is an economic open pit heap leach deposit
located in one of the most favorable areas in the world for mining and heap leach processing. This project has demonstrated it
could become the highest grade and largest heap leach silver mine in the world where silver would be the primary metal
produced with gold as a by-product.
The principal objectives of the Mintec Report were to; (1) update the Alamo Dorado resource calculation classifying measured,
indicated and inferred resources, (2) determine mining reserves classifying proven, probable and possible reserves within an
economic pit shell and (3) design a mine plan and mine schedule based on specific economic criteria. This report has utilized
higher cut-offs than in previous studies as a result of metallurgical information that was determined by column leach test work
conducted by METCON Research Inc. (``METCON'') of Tucson, Arizona. The resource and reserve calculations are based
upon the results of 17,872 meters of reverse circulation drilling in 67 drill holes and 4 large diameter diamond drill holes totalling
1,112 meters (Figure 1). Analysis of drill samples for silver and gold was conducted by Bondar Clegg of Canada and of
Mexico and both techniques employed and results presented have been reviewed to the satisfaction of Mintec.
Mintec classifications of both resources and reserves comply with the standards for disclosure that have been adopted by the
Toronto Stock Exchange. Mintec's statistical analyses determined three grade classifications. These silver equivalent grade
classifications are based on an understanding of the continuity of the higher-grade material and its positive metallurgical
response as demonstrated in column leach test work. Included in the reserve is high-grade (plus 90 grams silver equivalent per
tonne) and mid-grade (25 to 90 grams silver equivalent per tonne), while low grade(10 to 25 grams silver equivalent per tonne)
material is included in the resource. Low-grade material is stockpiled in the mine plan awaiting better metal prices. The Mintec
Report utilizes a higher cut-off grade (25 grams silver equivalent per tonne) which results in a higher overall grade for the
deposit and enhances project economics substantially.
TABLE 1
The Geological Resource at a cut-off of 10 grams AgEq*1 per tonne
is:
---------------------------------------------------------------
AgEq*1 Grade
Grade Zone Classification Tonnes Ag (g/t) Au AgEq*1
('000's) (g/t) (g/t)
===============================================================
Plus 90 g/t measured 12,312 138.04 0.42 161.78
25 to 90 g/t measured 24,700 31.36 0.16 40.22
10 to 25 g/t measured 13,568 10.82 0.06 14.10
Plus 90 g/t indicated 3,553 120.00 0.32 138.15
25 to 90 g/t indicated 11,520 31.34 0.16 40.51
10 to 25 g/t indicated 8,604 11.25 0.05 14.35
Plus 90 g/t inferred 349 136.01 0.27 151.25
25 to 90 g/t inferred 2,170 31.20 0.19 41.76
10 to 25 g/t inferred 2,779 12.23 0.05 14.82
TOTAL - All Categories 79,555 45.94 0.18 55.84
*1Silver Equivalent (AgEq) = is calculated based upon Ag at US
$5.28 per ounce and Au at US $300 per ounce.
---------------------------------------------------------------
Ag Au AgEq*1
TOTAL - Ounces('000's) 117,516 447.7 142,841.2
---------------------------------------------------------------
The block model grade estimation calculations employed by Mintec
utilized the inverse distance weighted squared method. Mintec
then checked this method by employing kriged calculations and
also by polygonal calculations with comparable results providing
good correlation and confidence. The Lerchs-Grossman method was
used to assist in developing economic pit limits.
TABLE 2
The Mineable Heap Leach Reserve at a cut-off of 25 grams AgEq*1
per tonne is:
---------------------------------------------------------------
Grade
Grade Zone Classifi- Tonnes Ag (g/t) Au AgEq*1
cation ('000's) (g/t) (g/t)
===============================================================
Plus +90 g/t proven 12,286 138.78 0.42 162.40
25 to 90 g/t proven 23,509 31.18 0.16 40.26
Plus +90 g/t probable 3,626 120.05 0.31 137.75
25 to 90 g/t probable 10,827 30.50 0.16 39.83
Plus +90 g/t possible 367 135.66 0.24 149.40
25 to 90 g/t possible 1,908 30.36 0.20 41.66
TOTAL - All Categories 52,523 63.05 0.23 76.28
Strip Ratio*2 1.82:1.00
*1Silver Equivalent (AgEq) = is calculated based upon Ag at US
$5.28 per ounce and Au at US $300 per ounce.
*2Strip ratio computed with low-grade zone as waste. (waste:ore)
---------------------------------------------------------------
Ag Au AgEq*1
TOTAL - Ounces('000's) 106,482.0 394.2 128,825.5
---------------------------------------------------------------
A comparison between Mintec's previous (Release 99-07) and
current study reveals an increase in resource from 119 million
silver equivalent ounces to 143 million silver equivalent ounces
(a net increase of 24 million silver equivalent ounces or 20%)
and an even more impressive increase in reserves (especially when
one considers the higher cut-off grade) from 100 million silver
equivalent ounces to 129 million silver equivalent ounces (a net
increase of 29 million silver equivalent ounces or 29%). The
impact of these increases is reflected in Mintec's higher planned
mining rate, and with additional economies of scale, at lower
overall cash costs. Capital costs will increase, however this
will be amortized over a larger deposit with the net result of a
lower effective capital cost per ounce of production.
The following assumptions outlined in Table 3 were used by Mintec
to determine the pit limits that maximize total profit using the
Lerchs-Grossman method.
----------------------------------------------------------------
Table 3 Alamo Dorado Project Economic Pit Design Parameters
----------------------------------------------------------------
Ag Recovery - High-Grade (plus
90 AgEq g/t) 70%
Ag Recovery - Mid-Grade (25-90
AgEq g/t) 65%
Au Recovery- High-Grade/Mid-Grade 85%
Ag Price US $5.28/oz (US $0.17/g)
Au Price US $300/oz (US $9.65/g)
Mining Cost - Tonne of material US $0.75/tonne
Processing Cost US $3.00/tonne
Average slope angle (Final Pit) 46 degrees
In-Pit Road width 20 meters
Road Grade 8%
Bench Face Angle 75 degrees
Mining Bench height 5 meters stacked 4 benches
high
Inter-ramp slope angle 55 degrees
Fixed berm width 8.65 meter catch bench every
5 meters
-----------------------------------------------------------------
The Mintec Report provides a mine plan and schedule which focuses
on the high-grade reserves early in the mine life. Metallurgical
recovery rates used by Mintec were selected on the basis of
METCON's column leach test work completed to date. Definitive
metallurgical column leach test work is continuing under the
direction of metallurgical consultant METCON and will further
refine recoveries for the mine model. The mine schedule developed
by Mintec consists of a three phase, pit design sequence. These
designs are based on seventy-five 5 meters bench plans and the
calculation of the mineable reserves with roads, developed from
the Lerchs-Grossman optimized pit outlines (Figure 2). The mine
model and schedule calls for 5,500,000 tonnes per year of high
and medium grade ore (or 460,000 tonnes per month). Coupled with
a life of mine strip ratio of 1.82:1.00 (waste to ore) the
average movement from the pit of high-grade and waste is roughly
1,300,000 tonnes per month or 15,600,000 tonnes per year. The
life of the project is estimated at 10 years.
The following Table 4 outlines the three phase pit design mining
schedule:
Table 4
Alamo Dorado - Ultimate Pit Mining Reserve *1:
---------------------------------------------------------------
Ore Mined Grade Cumulative
Pit Class ('000's Ag(g/t) Au(g/t) AgEq*2 Strip
Phases tonnes) (g/t) Ratio*3
===============================================================
I proven 8,105 123.47 0.29 140.14
I probable 3,288 97.69 0.27 112.98
I possible 509 94.61 0.22 107.27
Sub-Total: 11,902 115.12 0.28 131.23 0.87:1.00
II proven 13,951 67.37 0.29 83.80
II probable 3,545 55.92 0.20 67.47
II possible 164 47.83 0.21 60.02
Sub-Total: 17,660 64.89 0.27 80.30 0.86:1.00
III proven 13,738 36.20 0.18 46.34
III probable 7,621 32.30 0.17 42.01
III possible 1,603 32.31 0.20 43.65
Sub-Total: 22,961 34.64 0.18 44.71 1.82:1.00
Cumulative
Totals: 52,523 63.05 0.23 76.28 1.82:1.00
===============================================================
Total Ounces
(1000's) 106,482.0 394.2 128,825.5
---------------------------------------------------
Low-Grade
Stockpile 22,547 11.22 0.06 14.54
*1 25 grams AgEq per tonne cutoff.
*2 Silver Equivalent (AgEq) = is calculated based upon Ag at US
$5.28 per ounce and Au at US $300 per ounce.
*3 Strip ratio computed with low-grade zone as waste. (waste:ore)
-----------------------------------------------------------------
Of note is the very high-grade ore in the early life of the mine,
which has a significant impact on the payback of capital for the
project. In fact, the Mintec Report reveals the cash cost per
silver equivalent ounce in Phase I to be US $1.55. The Phase II
cost per silver equivalent ounce is estimated at US $2.51 and
finally the life of mine cost per silver equivalent ounce is US
$2.96.
A bankable feasibility study is now required to permit mine
financing and mine development. Such a study will assess in
detail ultimate capital and operating costs for the project. The
Company is currently reviewing its options for financing such a
study.
In connection with the ongoing development of Alamo Dorado,
Corner Bay Minerals Inc. has engaged Deutsche Bank Securities
Limited ("DBS") as the Company's financial advisor. DBS and its
affiliates are leading advisors and lenders to the global mining
industry.
* Maps are available on the BCE Emergis website at
www.e-newsservices.com
For additional information on Corner Bay Minerals Inc.:
Contact the Toronto, Ontario Office: Tel (416) 363-1124
Fax (416) 360-0728
Website: www.cornerbay.com E-mail: cbay@istar.ca
Or the Tucson, Arizona Office: Tel (520) 297-5516
Fax (520) 297-5511
SOURCE: CORNER BAY MINERALS INC.
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