Press Release Source: Northern Orion Resources Inc.
Northern Orion Resources Inc.: Alumbrera Increases Metal Reserves By More Than 20%
Tuesday June 22, 9:59 am ET
VANCOUVER, British Columbia--(BUSINESS WIRE)--June 22, 2004--Northern Orion Resources Inc. (the "Company") (AMEX:NTO - News; TSX:NNO - News) is pleased to announce an increase in the ore reserves at the Minera Alumbrera ("Alumbrera") copper/gold operation in Argentina, extending the mining operations at Alumbrera by two and a half years. This extension increases contained metal reserves by more than 20%, equating to an additional 350,000 tonnes of contained copper and 1.2 million ounces of gold over the life of the mine.
During 2003, Alumbrera undertook an ore delineation drilling programme within the existing ore envelope and at depth. As a result of new geological information, improved metal prices and operational cost improvements, Alumbrera has added in excess of 80 million tonnes of further ore reserves to its previous reserve base at new metal price assumptions of US$0.90 per pound of copper and US$350 per ounce of gold. The metal grade and cash cost profiles of the additional ore are expected to be broadly in line with the previous life of mine plan. The supplemental ore was found predominantly in the north-western and northern domains of the pit, both inside and outside previous pit limits.
"This increase in operational life and contained metal at Alumbrera is extremely good news for Northern Orion," said David Cohen, President and CEO of the Company. "As one of the lowest cost copper producers in the world, every additional day that Alumbrera extends its life is positive for us. As a result, we should see an approximately 30% extension to our already substantial expected future cash flow stream from Alumbrera and an immediate increase in the valuation of our ownership in the mine. The operational team at Alumbrera is to be complimented on this significant achievement at a time when metal prices are strong."
A new Ore Reserve Statement for Alumbrera will be completed early in the second half of the year, based on the new geological model and the update of the pit topography at June 30, 2004. This will be published once it becomes available.
Northern Orion is a mid-tier copper and gold producer generating significant present and projected cash flow from its 12.5 % ownership interest in Alumbrera. With its low operating costs and mature operation, Alumbrera should provide cash flow to the Company over the next ten years which, together with project debt, could be applied to bringing Agua Rica into production without further significant equity dilution at current commodity prices. Northern Orion currently has over US$11 million in cash.
"David Cohen"
David Cohen, President and CEO |
