Dynasty Metals to commission Zaruma plant March, 2009
2008-12-17 06:50 MT - News Release
Mr. Robert Washer reports
DYNASTY PLANS TO COMMISSION GOLD PLANT BY THE END OF MARCH 2009
Dynasty Metals & Mining Inc. has nearly completed plant construction at its Zaruma gold project in Ecuador.
Company President, Rob Washer, commented: "President Correa and other senior Mining Ministry representatives continue to express publicly and privately their support for "large scale environmentally responsible" mining in Ecuador. After months of direct consultation with government and industry officials regarding the Mining Mandate and draft amendments to the Mining Act, we concluded we should complete construction so that we may commission the gold plant at Zaruma as soon as practicable. We are presently planning for the end of March 2009.
Initially, we plan to process 300,000 tonnes of ore to produce approximately 100,000 ounces of gold annually. The installed capacity of the plant, except for the wet section, will be approximately 800,000 tonnes, allowing for significant expansion without additional significant capital cost after we reach steady state production.
The Company presently has sufficient cash resources to complete all requisite plant and mine construction."
Recently updated photographs of the Zaruma Gold Project are available on the Company's website at www.dynastymining.com.
IAMGOLD Royalty
Separately, Dynasty announces that it has entered into an agreement with IAMGOLD Ecuador S.A. ("IAMGOLD") to extend by six months the option period during which Dynasty may purchase the remaining 1 1/2% Net Smelter Returns Royalty ("NSR Royalty") on certain concessions at the Company's Zaruma Gold Project that were acquired from IAMGOLD in 2004. Dynasty will now have until June 30, 2009 to exercise the option.
In December 2007, the Company exercised its first option to purchase one-half of the original 3% NSR Royalty for US$1 million. The exercise price to purchase the remaining 1 1/2% NSR Royalty remains unchanged at US$5 million.
Company President, Rob Washer, further commented, "I would like to thank IAMGOLD for their agreement to extend the option period."
About the Zaruma Gold Project
The Zaruma Gold Project is located in the cantons of Zaruma and Portovelo, Province of El Oro, Ecuador, approximately 160 kilometres south of Guayquil, Ecuador's main seaport.
Resources
Zaruma gold resources were estimated by Allen J. Maynard, BAppSc(Geol), MAIG, MAusIMM, an independent "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), as follows:
Resources Gold Gold
category (ounces) (g/t) Tonnes
Measured 702,100 13.93 1,568,000
Indicated 408,100 13.87 915,000
Inferred 1,383,400 12.72 3,382,000
Mr. Maynard's report, dated October 21, 2005, has been filed on SEDAR and is available for viewing at www.sedar.com.
Preliminary Assessment
The highlights of an Independent Preliminary Assessment of the Zaruma Gold Project prepared by W.J. Holly, MAustIMM FFin, an independent "qualified person" as defined by NI 43-101, which was based on Mr. Maynard's gold resources estimate, are as follows:
Estimated mine life over two stages 14.5 years
Annual production (net of 15% dilution) 250,000 tonnes/100,000 ounces gold
Payback period at $500 per ounce gold One year
Operating cost per gold ounce $181 (U.S.) (unadjusted for inflation)
As required by NI 43-101, it should be noted these estimates are preliminary, and they include inferred gold resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. As such, there is no certainty that the estimates contained in the Independent Preliminary Assessment will be realized. Readers are also cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Mr. Holly's report, dated August 21, 2006, has been filed on SEDAR and is available for viewing at www.sedar.com.
Michel Rowland, a member of AUSIMM (Australian Institute of Mining and Metallurgy) and a "qualified person" as defined by NI 43-101, is responsible for the technical information contained in this news release.
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