Wolfden unveils development plans for Izok
Tuesday September 5, 3:49 pm ET
ca.us.biz.yahoo.com
Shares Issued: 74,647,878
THUNDER BAY, ON, Sept. 5 /CNW/ -
- Izok-Lupin will be the focus of the corporation's development plans
- Exploration to resume immediately at Izok and surrounding area
- Nunavut Water Board issues water use license for Izok Project
WOLFDEN RESOURCES INC. (TSX:WLF - News) is pleased to provide an update on the corporation's development plans for its Amaqqut Group of Projects in Nunavut, Canada. Wolfden intends to make its 100% owned Izok Project the priority for near-term exploration and development. The Amaqqut Group of Projects also includes the 100% owned Izok, High Lake, Hood and Ulu deposits, and the Gondor Project (60% owned), a joint-venture with Falconbridge Ltd., a subsidiary of the Xstrata group.
IZOK PROJECT
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The Izok deposit is one of the world's highest-grade undeveloped base metal deposits with an indicated resource of 14.4M t grading 2.52% Cu, 12.94% Zn, 1.28% Pb and 71.0g/t Ag plus an inferred resource of 0.37M t grading 3.79% Cu, 6.40% Zn, 0.27% Pb and 54.2g/t Ag. Work to-date shows that the majority of the Izok deposit can be mined by low-cost open pit mining methods. Current analysis suggests that the Lupin Mill should be used for processing Izok ore. Lupin is a fully operational and permitted Mine - Mill and tailings complex located approximately 80km East of Izok. The Lupin infrastructure represents a major reduction in capital versus building a new mill and tailings compound at Izok, and also streamlines the permitting requirements for development.
Economic Analysis - Izok Project
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Recent economic assessment work completed for Wolfden by independent consulting firm, Wardrop Engineering Inc., suggests several changes to the recently reported Scoping Study including capital reductions associated with the cost for building all-season roads between Izok and tide-water, in addition to a reduction in operating costs associated with shipping costs. Treatment terms for zinc concentrates have been adjusted lower, however treatment charges relating to copper concentrates have been adjusted higher including the addition of price participation. This work has analyzed the deposits individually and in a combined "Synergistic" Model that analyzes benefits provided by the potential for shared infrastructure with the High Lake and Ulu deposits. All of the studies have been completed using the following criteria:
1) Base Case (Low Metal Prices) - US$1.20/lb Copper, US$0.60/lb Zinc, US$0.45/lb Lead, US$475/oz Gold and US$7.50/oz Silver
2) Mid-Point Metal Prices - US$1.65/lb Copper, US$0.75/lb Zinc, US$0.46/lb Lead, US$485/oz Gold and US$8.00/oz Silver
3) High Metal Prices - US$2.25/lb Copper, US$1.00/lb Zinc, US$0.50/lb Lead, US$550/oz Gold and US$9.50/oz Silver.
The Exchange rate used for all models is Cdn$1.20 per US dollar. Operating costs were calculated using primarily current prices, however long-term prices were used when available. This work has resulted in improved economics for the Izok Project:
SYNERGISTIC MODEL - This model assumes certain cost sharing aspects (utilizing common infrastructure) provided by Wolfden's potential multiple operations in the area. An updated Synergistic Izok financial model shows an increase in the Internal Rate of Return ("IRR") for the Project from 17.1% to 18.6% using low metal prices and from 29.7% to 31.2% using mid metal prices. The Izok Project presents strong economics primarily due to its high grades. The Izok Model shows the following economics based on the revised work:
Net Present Value - Internal Rate of Return:
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Metal Prices NPV - 5% NPV - 8% Internal Rate
Discount Discount of Return (%)
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Low $339.0M $227.8M 18.6
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Mid $758.5M $575.2M 31.2
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High $1,410.3M $1,114.9M 46.8
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Total synergistic capital costs for the Izok Project, including a 20% direct capital contingency and 28.5% indirect costs, are estimated at $504.4M. Total stand-alone capital costs for the Izok Project are $536.6M. Operating costs are estimated at $0.36/lb Zn or $(0.38)/lb Cu taking into account by-product credits. Operating costs per tonne are estimated at $183/tonne considering all mining, processing, transporation, general & administration, and smelting costs. Annual pre-tax cash flow is estimated up to $161.1 Million using Low Metal Prices, $238.9 Million using Mid Metal Prices, and $360.3 Million using High Metal Prices.
This analysis does not include the Inukshuk Zone that would be mined using underground mining methods. This zone will be included in future studies.
Given the extremely positive economic characteristics of Izok, Wolfden has now retained Wardrop Engineering Inc. to complete a Full Feasibility Study for placing the Izok deposit into production. The Full Feasibility Study is expected to be completed in the second quarter of 2007.
Future Developments
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Significant drilling programs are planned for the Izok deposit, and surrounding lands. Geotechnical drilling will be completed for engineering and final open pit mine designs. Exploration drilling to expand the Izok deposit at depth where it remains open, and to improve the classification of the inferred resources will begin in the near future. Additionally, following large-scale land acquisition in the area, exploration drilling testing for additional deposits in the Izok greenstone belt will begin in the near future - including a target where surface sampling has returned significant copper and zinc assays in grab samples.
Financing
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Wolfden has also entered into discussions with several banking groups with respect to arranging additional financing facilities for development when required.
Additionally, Wolfden has entered into discussions with a major multi-national mining company with respect to potential participation in the development of the Amaqqut Group of Projects. As announced on July 18, 2006, Wolfden has retained Mike Mason of Mineral Services LLC to assist in these negotiations.
Permitting
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Wolfden has retained Gartner Lee Limited to assist Wolfden in the environmental process for developing its deposits. Recently, a permit application was made for the High Lake Re-Licensing Project and the Nunavut Impact Review Board (NIRB) screening has recommended in favour of the High Lake Re-licensing Project proposal.
The High Lake Re-licensing program involves advanced exploration in the Kitikmeot Region of Nunavut, Canada. This Project includes the construction of improved transportation and accommodation facilities at High Lake including a gravel airstrip at Sand Lake and a 12 km road from the airstrip to a modernized camp at the High Lake site. The NIRB screening decision enables Indian and Northern Affairs Canada, the Kitikmeot Inuit Association, the Department of Fisheries and Oceans Canada and the Nunavut Water Board to finalize terms and conditions and proceed with issuing their permits and authorizations for the Re-licensing Project.
Wolfden will now be able to continue the advanced exploration and permitting activities in preparation for the start of construction and commencement of full production at High Lake. The next major step in the permitting process will be the submission of regulatory permit applications for the full-scale mining project and docking facilities on the Coronation Gulf of the Arctic Ocean with the accompanying filing of the High Lake EIS. The Company, along with its consultants, will have the initial EIS documents ready for filing this month.
Additionally, Wolfden has now received the Water License for the Izok Project which will allow the corporation to begin work associated with advancing the Izok deposit to production. Environmental work is underway for a future EIS submittal for the Izok deposit.
Several companies in Nunavut have recently filed Environmental Statements and received approvals, and/or recommendations, for the development for mining operations including Tahera Diamond Corporation (TSX:TAH - News) who commenced commercial production at their Jericho Mine on July 1, 2006. In March of 2006, NIRB recommended that the Doris North Project of Mirimar Mining Corporation (TSX:MAE - News) should proceed. Cumberland Resources Ltd. (TSX:CLG - News) announced last week that NIRB has recommended in favour of the Meadowbank Gold Project - a time period of approximately 19 months from submittal of the draft EIS to NIRB approval. The Meadowbank Project includes docking facilities at tidewater and an all-season road to access the mine area similar to the Wolfden projects, providing optimism for a timely permitting process for the Amaqqut Group of Projects.
Other Projects - Lupin Gold Mine, High Lake, Ulu, Gondor, and Hood
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Deposits
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Lupin Gold Mine - The primary use for the Lupin Gold Mine is infrastructure for the Izok Mine Project. However, given higher gold prices, Wolfden has initiated a geological assessment of the Lupin Mine that was closed in February 2005 at lower gold prices. This assessment will review options to re-open the mine. Between 1982 and 2005, the Lupin Mine produced more than 3 million ounces of gold at an average grade of +9.0 g/t gold. Additionally, Lupin is located in close proximity to the Gondor Deposit (approximately 30km) providing potential for additional mine development in the area.
High Lake Deposit - Wolfden's 100% owned High Lake Deposit is the most advanced, in terms of permitting, of all of the Wolfden projects in Nunavut. As at Izok, project economics have changed with the lowered capital and operating costs, and revised smelter terms. The EIS submittal for High Lake will take place this month, and full feasibility will be initiated following the completion of the Izok study.
Ulu Gold Deposit - Wolfden's 100% owned Ulu Gold Deposit is located between Izok and High Lake. The Ulu project would benefit from infrastructure provided by the other deposits and will be put on hold until such time that development of the other deposits has commenced.
Gondor Deposit - The Gondor Deposit, owned 60% by Wolfden and 40% by Falconbridge Limited (FAL:TSX, FAL:NYSE), is located approximately 30km southwest of Lupin and could become an important source of future ore for the Lupin Mill. In 2007, Wolfden is planning an aggressive exploration program at Gondor Deposit that contains a higher-grade core (historical resource of 4,380,000 t - 0.1% Cu, 1.2% Pb, 9.7% Zn, 0.78g/t Au and 64.6g/t Ag). The deepest hole drilled into the deposit returned 20.4 meters grading 10.4% Zn, 1.6% Pb, 0.5g/t Au and 79.4g/t Ag. The deposit is open for expansion in all directions.
Hood Deposit - Wolfden's 100% owned Hood Deposit is located north of Izok and is host to several copper-rich deposits. Exploration at Hood will begin in 2006.
Wolfden's Amaqqut Group of Projects places Wolfden as one of the largest holders of high-grade poly-metallic resources in the world. These resources are summarized in the following table:
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Deposit Category Tonnes Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t)
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IZOK Indicated 14,400,000 2.52 1.28 12.94 trace 71.0
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Inferred 370,000 3.79 0.27 6.40 trace 54.2
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HIGH LAKE Indicated 14,300,000 2.34 0.32 3.53 1.01 75.7
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Inferred 1,300,000 1.17 0.28 3.36 0.78 64.6
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ULU Indicated 720,000 11.70
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Inferred 410,000 10.73
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GONDOR Historical 13,630,000 0.2 0.5 5.1 0.6 46.7
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Incl. 4,380,000 0.1 1.2 9.7 0.9 85.7
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HOOD 10 Historical 1,800,000 3.4 0.3 4.5 0.5 27.0
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HOOD 41 Historical 900,000 1.4 n/a 3.2 n/a 12.0
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HOOD 41A Historical 1,100,000 2.4 n/a 3.3 n/a 16.0
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LUPIN Resource Underway
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Note - Historical resources were completed by previous operators prior to the implementation of National Instrument 43-101. Historical resource estimates contained in this release have not been verified by Wolfden's qualified person and should not be relied upon. These estimates are considered to be relevant, reliable and consistent with CIM definitions. The High Lake and Ulu resource estimates were completed by G. H. Wahl, P. Geo and the Izok resource estimate was completed by Wardrop Engineering Inc. Mr. Eric T. Harkonen, P Eng., of Wardrop Engineering and Project Manager for Wolfden's Izok Full Feasibility Study, has reviewed the contents of this press release and is the qualified person under NI 43-101.
WOLFDEN is a Canadian based mineral exploration and development company with a diversified portfolio of advanced stage properties and several ongoing exploration programs in Canada. Wolfden is debt free and has a strong treasury.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.
For further information
Ewan Downie, President, Phone: (807) 346-1668, Fax: (807) 345-0284 e-mail: Info@wolfdenresources.com, Web Site: www.wolfdenresources.com
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Source: Wolfden Resources Inc. |
