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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (55658)	1/21/2008 10:15:05 AM
From: loantech	Read Replies (1) \| Respond to of 78424

Last Close 1/18/2008 $5.20 Monday January 21 2008 - News Release Mr. Richard Hall reports METALLICA RESOURCES ANNOUNCES RECEIPT OF EL MORRO FEASIBILITY STUDY Metallica Resources Inc. has received the feasibility study from its joint-venture partner, Xstrata Copper, for Metallica's 30-per-cent-owned El Morro copper-gold project in Chile. The feasibility study is contained within 75 large binders that reach 25 feet in height. Due to the immense amount of data that will have to be analyzed, a comprehensive press release will be issued in due course. Attached are the base case elements of the feasibility study (dollar amounts are in U.S. dollars): An initial capital investment of $2.5-billion is projected, which includes an allowance for price escalation and a contingency of 13 per cent. The total life of mine (LOM) capital expenditure, including sustaining capital, is estimated at $2.8-billion. The capital cost estimates are considered to be accurate to within 15 per cent. The feasibility study shows positive returns at long-term prices of $1.92 per pound for copper and $500 per ounce for gold, when discounted at a rate of 8 per cent. Operating costs are estimated at $10.56 per tonne of ore and a mine-site cash cost of 74 cents per pound copper, after gold credits at a long-term gold price of $500 per ounce. The operating costs are considered to be accurate to within 15 per cent. The feasibility study was based on 487 million tonnes of ore grading 0.56 per cent copper and 0.44 gram per tonne gold with a total waste-to-ore ratio of 3.4:1, of which a portion will be capitalized prestripping. Metallurgical recoveries are estimated at 88 per cent for copper and 69 per cent for gold. Average annual production during the first five years has been projected to be 195,285 tonnes per year of copper and 353,774 ounces per year of gold. The average annual LOM production over the currently estimated 15-year mine life is projected to be 157,453 tonnes per year copper and 337,255 ounces per year gold. The feasibility study includes a project execution plan (PEP) that calls for environmental impact assessment approvals, infrastructure detailed engineering and the procurement of long-lead items during 2008. Richard J. Hall, Metallica's president and chief executive officer, stated: "The receipt of the El Morro feasibility study marks an important milestone in the development of this very exciting project. Metallica, along with its consultants, have already begun the task of analyzing the extensive study provided to us by Xstrata." Peter Forrestal, executive general manager of project development for Xstrata, stated: "The feasibility study demonstrates the potential for El Morro to contribute to Xstrata Copper and Metallica's growth profile. We remain committed to working with our partners, Metallica Resources, to advance the project." Metallica has engaged Pincock Allen & Holt (PAH) to act as its technical consultant and qualified person responsible for preparing an independent NI 43-101 technical report to be filed on SEDAR. Prior to the filing of the NI 43-101 technical report, and following meetings with Xstrata who will provide Metallica with a thorough review of the study and plans for the project going forward, Metallica will file a comprehensive press release detailing the feasibility study. © 2008 Canjex Publishing