Marathon Palladium Project to Move Ahead on Strength of Preliminary Assessment
Study estimates operating cost of US$237/oz palladium
TSE Symbol: GEO
TORONTO, April 18 /CNW/ - Geomaque Explorations Ltd. is pleased to
announce the results of a Preliminary Assessment ("the Study") of its Marathon
Palladium Project, located 10 kilometres north of Marathon, Ontario. The Study
indicates that the Marathon Palladium Project would generate significant cash
flow based on recent metal prices, and Geomaque intends to move forward as
quickly as possible with a bankable feasibility study.
Economics
The Study shows that the Marathon Palladium Project has very favourable
economics. The project is forecast to generate undiscounted cash flow after
capital recovery of Cdn$508.2 million, giving it a net present value of
Cdn$152.3 million at a 10% discount rate. Payback would be expected in the
third year of operation, and the Study indicates a pre-tax internal rate of
return of 24%.
The economics of the Study are based on the following metal price
assumptions: palladium: US$700/oz; copper US$0.80/lb; platinum: US$600/oz;
gold: US$265/oz; and, silver: US$4.50/oz.
Over a 15-year mine life, the Marathon Palladium Project would be
expected to produce 949,000 oz of palladium, 267 million lbs. of copper,
215,000 oz of platinum, 146,000 oz of gold, and 1.7 million oz of silver. The
average operating cost per ounce of palladium over the life of the project
would be US$237, after by-product credits.
Total capital cost is estimated at Cdn$185.2 million, which includes
Cdn$120.5 million for mill facilities, Cdn$33.5 million for mining equipment,
Cdn$8.0 million for a tailings dam, roads, infrastructure and working capital,
Cdn$16 million as a contingency and Cdn$7.2 million for pre-stripping of the
deposit.
Resource
Resource estimates are based on data generated by Lakefield Research Inc.
from the assay results of 114 diamond drill holes completed by past operators
Anaconda Canada Explorations Ltd. (Anaconda) and Fleck Resources Ltd. (Fleck).
The geostatistical data review was completed by Geostat International Inc. The
Marathon Palladium Deposit is estimated to host a mineral resource as follows:
<<
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Category Tonnes (000s) Pd (g/t) Cu (%) Pt (g/t)
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Measured 24,600 0.698 0.264 0.182
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Indicated 46,500 0.620 0.243 0.168
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Measured & Indicated 71,100 0.647 0.250 0.173
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Inferred 51,600 0.460 0.218 0.130
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Based on this mineral resource, an open pit design with an overall
average stripping ratio of 2.9:1 was created containing the following:
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Average Grade Contained Metal
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Category Tonnes Pd Cu Pt Pd Cu Pt
(000s) (g/t) (%) (g/t) (oz) (000 lbs.) (oz)
-------------------------------------------------------------------------
Measured 15,300 0.886 0.303 0.222 435,800 102,200 109,200
-------------------------------------------------------------------------
Indicated 25,100 0.823 0.286 0.211 664,200 158,200 170,300
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Measured &
Indicated 40,400 0.847 0.293 0.215 1,100,000 260,400 279,500
-------------------------------------------------------------------------
Inferred 11,800 0.726 0.287 0.190 275,400 74,600 72,100
-------------------------------------------------------------------------
>>
The pit design was optimized using a US$600 per ounce palladium price.
Price assumptions for other metals are the same as those used in the economic
evaluation.
Operations
The Study envisions mining the Marathon Palladium Deposit through
conventional open pit mining methods, using front-end loaders, hydraulic
shovels and 136-tonne haul trucks. A 3.5 million tonne-per-year flotation mill
would produce a bulk concentrate containing palladium, copper, platinum, gold
and silver. The approximately 41,000 tonnes of concentrate produced annually
would be transported offsite for smelting.
Over the life of the project, metallurgical recoveries are projected as
follows: palladium: 77%; copper: 84%; platinum: 68%; gold: 60%; and, silver:
80%. Metallurgy is based on work completed by Anaconda and Fleck. The
metallurgical data review, process design and mill cost estimate for the Study
was carried out by SNC Lavalin Engineers and Constructors Inc.
"This Preliminary Assessment shows just how attractive the Marathon
Palladium Project is," said John Paterson, President and CEO. "With production
costs of US$237/oz, this Study indicates that the Project provides the margin
we need to push forward with feasibility and development. Optimization in
future studies will certainly further enhance the economics of the Project."
Geomaque signed an option agreement to earn a 60% interest in the
Marathon Palladium Project with a subsidiary of PolyMet Mining Corp. (CDNX:
POM, OTCBB: POMGF) in November 2000. All past Geomaque press releases
regarding the Marathon Palladium Project are available on the Company's
website at www.geomaque.com.
The economic evaluation is based on the 40.4 million tonnes of measured
and indicated resources and 11.8 million tonnes of inferred resources, with
grades as noted in the table above, incorporated in an open pit design.
National Instrument 43-101 requires that the following disclaimer accompany
disclosure of a Preliminary Assessment that includes an economic evaluation
which uses inferred mineral resources: The Preliminary Assessment is
preliminary in nature. It includes inferred mineral resources that are
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral reserves,
and there is no certainty that the Preliminary Assessment will be realized.
Geomaque Explorations Ltd. is an international mining company that is
producing gold from its Vueltas del Rio Mine in Honduras and San Francisco
Mine in Mexico, and exploring for precious metals in the Americas.
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For further information: please visit our website at www.geomaque.com,
or contact: Sean Stokes, Manager, Investor Relations, (416) 956-7470, e-mail
sstokes@geomaque.com;
To request a free copy of this organization's annual report, please go to
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