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ADM 2010-02-24 (provided courtesy of Marketwire.)
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Andina Timing Update for Volcan Gold Project Studies
TORONTO, ONTARIO--(Marketwire - Feb. 24, 2010) - ANDINA Minerals Inc. (TSX
VENTURE:ADM) (the "Company") is providing today an update on the timing of
the Conceptual Design Study ("CDS") and Preliminary Economic Assessment
("PEA") currently being conducted on the Volcan Gold Project ("Volcan").
The CDS and PEA, based on a heap leach scenario (the "Heap Leach Base
Case"), were targeted for completion in early 2010.
/T/
-- Recent infill drilling suggests that there is potential to define zones
of higher grade within the resource
-- Further metallurgical testing completed by the Company has indicated
that at the crush size the company would likely employ in the Heap Leach
Base Case scenario, recoveries for Volcan would range between
approximately 57% - 60% rather than the 57% - 77% range indicated by
previous metallurgical tests. Prior tests incorporated finer crushing
than Andina now believes would likely be employed (refer to November 21,
2007 press release)
-- Alternative development scenarios have the potential to generate higher
project returns through increased recoveries and optimization of the
mining and processing of higher grade material
-- Milling and combination heap leaching/milling scenarios are being
reviewed, which will evaluate the benefits of higher production revenues
against higher capital cost relative to the Heap Leach Base Case
scenario
-- While copper grades for Volcan are lower than other Maricunga district
projects, for the milling type scenarios now being evaluated there may
be sufficient copper and gold in pyrite to add a circuit to enhance
project economics through the recovery of copper and gold in concentrate
/T/
As a result of these developments, Andina has targeted the second half of
2010 as the anticipated release date for the CDS and PEA, including
alternative development scenarios.
"Given the current and expected strength of gold prices, we believe that it
is likely that a milling or combination heap leaching/milling scenario will
generate the optimum development alternative for the Volcan Project. As
such we are taking the decision to broaden our technical studies rather
than fast-track the Heap Leach Base Case Scenario study. While Andina has
been primarily focused on a Heap Leach Base Case scenario, it is in the
best interest of our shareholders to extend our technical review period to
ensure we define the value maximizing scenario for the large Volcan
resource", said George Bee, President & CEO. "Volcan continues to be one of
the world's largest undeveloped gold projects in a politically stable and
mining friendly jurisdiction and we have sufficient cash resources and a
strong team in place to optimize the development planning process."
Conceptual Design Study Initial Metallurgical Results
Since the release of the last metallurgical test results in May 22, 2008
and November 21, 2007, Andina, utilizing new development planning
parameters, has spent considerable time and effort collecting new
representative mineral samples, subjecting these new samples to a series of
tests, and verifying the results. Although metallurgical results are still
under review, the Company considers metallurgical results sufficiently
advanced to provide initial conclusions and guidance on gold extraction
using heap leach techniques.
The results of this metallurgical work are consistent with previously
released recoveries of approximately 70%. However, these recoveries have
only been achievable with crush sizes that were incompatible with other
operational parameters of the project, such as leach pad stability, and
reasonable capital and sustainable operating costs. For this reason the
Heap Leach Base Case recovery rate at the coarser crush size now
contemplated, while not optimized, falls short of the recoveries indicated
by the 2008 metallurgical test program and the target recovery for the
project issued as guidance in the September 2009 resource update.
Initial Testing
In 2008, based on test work and an assumed resource cut-off grade, the gold
recovery from heap leaching was indicated as ranging from 57% - 77% with
increasing recoveries directly correlated with increased grades. Following
on from this initial phase of testing, the Andina development team
collected samples in early 2009 representing various portions of the
mineral resource. An independent consultant was contracted to collect the
sample and design the 2009 test program. Approximately 1,250-kg of samples
were collected from 10 distinct areas of the resource and arrived at
McClelland Laboratories Ltd. ("McClelland") in Reno, Nevada in mid May
2009. A portion of the samples collected were sent to KHD Humboldt Wedag
("KhD") in Cologne, Germany for High Pressure Grind Roll ("HPGR") crushing
as a precursor to testing. A comprehensive series of 96-hr bottle roll
leach tests were performed on conventionally crushed and HPGR crushed
material with crush sizes ranging from 19-mm down to 106 microns. Similar
sized material was bottle-roll tested on pre-rinsed material and material
that had a lead nitrate additive, beyond the standard reagent doses aimed
at pH control and gold extraction. This first series of 128 bottle-roll
tests were concluded during August 2009 and was the basis upon, which
subsequent column tests were set up and executed, also at McClelland. The
Heap Leach Base Case was refined once the initial bottle-roll results had
been received. Twenty-one leach column tests were set up testing
conventionally crushed material at 9-mm and 6-mm, and HPGR crushed material
at 6-mm and 3-mm. Final calculated head grades and full completion of the
testing is pending residue assay analysis subsequent to a 120-day column
leach cycle. Preliminary results under the conditions tested (6-kg/t
cement, 1.5-kg/t lime and 500 ppm NaCN) have been received by the Company.
Further Testing of Representative Material
Based on the recent preliminary bottle-roll results and review by
metallurgical and process design consultants, it was concluded that the
2007 and 2008 test work program which focused on a crush size of P80 of
around 2-mm to 3-mm was not considered feasible for a commercial heap leach
operation. The minimum practical crush size for commercial production at
Volcan was established at a crush size of P80 of 6-mm. Tests were then
aimed at confirming that HPGR crushing improved gold recovery over
conventional crushing and establishing an overall recovery parameter for a
P80 of 6-mm. Due to the fact that the original 10 samples collected had
relatively high gold grades ranging from 0.98-g/t to 1.61-g/t, it was felt
these samples did not fully characterize the gold tenor of Volcan, where
this grade range represented only fourteen percent (14%) of the contained
ounces in the current resource inventory. While the external consultant
initially selected higher grade samples to reduce the inherent error in
assaying of low grade samples, the Company and its consultants later agreed
that these results would not properly reflect the general characteristics
of the Volcan mineralization. During July through August 2009 another set
of five (5) samples, totalling 1,559-kg was collected, again representing
the resource spatially but this time focusing on 0.4-g/t, 0.8-g/t and
0.65-g/t gold grades, and were shipped to McLelland and KhD. A further set
of 20 bottle-roll tests were conducted on conventional and HPGR crushed
material with size ranges between 2-mm and 12-mm with the emphasis on the
6-mm (P80) crush size for both HPGR and conventional crushed products.
Results from bottle-roll tests from the newer samples are now available
although no further column test work has been initiated at this time on the
lower and mid-range grade resource material.
As previously stated, results for the Heap Leach Base Case, which
incorporates conventional primary, secondary, and then HPGR tertiary
crushing, show that for a nominal P80 6-mm leach feed, recoveries of
approximately 57% to 60% might be expected. This is based on agglomerating
the crushed feed to the leach pad with cement, lime and applying barren
leach solution at the agglomerating stage. Due to the need to maintain
percolation and solution transmission through the heap and considering the
need to stabilize fines in an agglomerated nodule, the feed to the pad is
stacked mechanically onto an on-off reusable pad with spent material being
deposited in a lined storage facility after rinsing and water recovery.
Considerable work remains to be completed on the heap leach scenario to
optimize the trade-off of recoveries and other factors such as capital
costs for various heap leach configurations.
Expansion of Processing Alternatives in the Conceptual Design Study
Alternative process flow sheets are now under consideration in the CDS.
Initial desktop evaluations indicate that several alternatives could serve
to optimize Volcan's economics by improving recoveries, but also includes
conventional heap leach at a coarser crush size to reduce capital
investment. Given the strong gold price environment, optimizing recoveries
and therefore gold production together with optimizing the mining and
processing of potential higher grade material warrants the study of
scenarios which probably require additional capital as compared to heap
leach alternatives to incorporate milling for all or part of material mined
at the Volcan Project.
Alternatives under consideration are:
/T/
-- Coarser Conventional Crush for Low-Grade and Milling for Higher-Grades -
This alternative considers conventional heap leaching for the majority
of the ore tonnage but allows a higher-grade portion of the feed to be
milled before carbon-in-leach gold extraction in order to enhance gold
recoveries. A similar flow sheet is employed at Barrick Gold
Corporation's Ruby Hill property in Nevada, USA;
-- Coarse Milling With, and Without, Flotation - This alternative seeks to
capture as much of the free and encapsulated gold at reasonable grind
sizes for whole ore leaching, or recovery of gold and sulphide
concentrates for more intensive treatment in a flotation concentrate;
and
-- Coarser Conventional Crush and Heap Leach - This alternative is a more
conventional heap leaching technology, which will deliver lower
development capital, but which may not improve gold recoveries. This
method has been employed at the nearby Kinross Gold Corporation
Maricunga mine and could be evaluated for Volcan on a large scale.
/T/
To evaluate the alternatives above a number of activities need to take
place, including:
/T/
-- Completion of the current in-fill drilling program on the Dorado
resource which will help identify the different gold grade zones within
the resource;
-- Resource modelling which would focus on a better interpretation of
higher grade zones within the overall resource. This would support
selective mining which could serve to reduce dilution seen in the
resource model for the Heap Leach Base Case;
-- Update mine planning based on each of the alternatives being reviewed;
-- Sizing plant and finalizing process flow streams; and
-- Estimating capital, operating costs and project economics.
/T/
The finalized CDS will evaluate all of the alternatives above, including
optimizing the Heap Leach Base Case, and evaluate final projected gold
recoveries, capital and operating costs, and other key parameters.
Following release of the comprehensive review of all alternatives in the
second half of 2010, the Company would target completion of a
prefeasibility study for the leading alternative in the first half of 2011.
Qualified Person
Mr. Richard Gowans of Micon International Ltd. is the Qualified Person
under National Instrument 43-101 responsible for reviewing technical and
scientific information in this press release regarding the CDS and PEA. Mr.
Gowans has reviewed the contents of this press release. Certain technical
information regarding the Project required to be disclosed under Part 3 of
National Instrument 43-101 is contained in the Technical Report on the
Volcan Gold Project, Region III, Chile and Updated Mineral Resource
Estimate for the Dorado Gold Deposits, dated October 23, 2009, prepared by
Reno Pressacco, M.Sc. (A), P.Geo., Richard Gowans, P.Eng. and Sam
Shoemaker, B.Sc., MAusIMM, each of Micon, and is available on SEDAR at
www.sedar.com. This includes information regarding project area geology,
mineralization, rock types and geological controls.
Andina Minerals Inc.
Andina's primary focus is mining exploration and development in Chile. The
Company's flagship property is the 100%-owned Volcan Gold Project,
strategically located in the prolific Maricunga Gold Belt. In September
2009, Andina provided an updated resource estimate for Volcan including
measured and indicated mineral resources of 492.5 million tonnes at an
average grade of 0.62 g/t Au for 9.8 million ounces of contained gold and
inferred mineral resources of 36.8 million tonnes at an average grade of
0.65 g/t Au for 768,000 ounces of gold.
Forward-Looking Statements
This release contains forward-looking statements, including predictions,
projections and forecasts. Forward-looking statements include, but are not
limited to, statements with respect to exploration activities and results
(including the timing of results), the timing and success of exploration
activities generally, permitting timelines, government regulation of
exploration and mining operations, environmental risks, title disputes or
claims, limitations on insurance coverage, timing and possible outcomes of
any pending litigation and timing and results of future resource estimates
or future economic studies, and in particular include statements with
respect to the timing of the CDS and PEA, rates of gold recovery, and
analysis and assessment of processing scenarios. Often, but not always,
forward-looking statements can be identified by the use of words such as
"plans", "planning", "planned", "expects" or "looking forward", "does not
expect", "continues", "scheduled", "estimates", "forecasts", "intends",
"potential", "anticipate", "does not anticipate", or "belief", or describes
a "goal", or variation of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved.
Forward-looking statements are based on a number of material factors and
assumptions, including, among others, the result of drilling and
exploration activities, results of studies, that unexpected geological
conditions or formations are not located, that contracted parties provide
goods and/or services on the agreed timeframes, that equipment necessary
for exploration is available as scheduled and does not incur unforeseen
break downs, that no labour shortages or delays are incurred, that plant
and equipment function as specified, that no unusual geological or
technical problems occur, and that laboratory and other related services
are available and perform as contracted.
Forward-looking statements involve known and unknown risks, future events,
conditions, uncertainties and other factors which may cause the actual
results, performance or achievements to be materially different from any
future results, prediction, projection, forecast, performance or
achievements expressed or implied by the forward-looking statements. Such
factors include, among others, the interpretation and actual results of
current exploration activities; changes in project parameters as plans
continue to be refined; future prices of gold; possible variations in grade
or recovery rates; failure of equipment or processes to operate as
anticipated; the failure of contracted parties to perform; labour disputes
and other risks of the mining industry; delays in obtaining governmental
approvals or financing or in the completion of exploration, as well as
those factors disclosed in the company's publicly filed documents. Although
Andina has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. There
can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Andina Minerals Inc.
George M. Bee
President & CEO
416 203 3488
or
Andina Minerals Inc.
Keith McKay
Chief Financial Officer
416 203 3488
www.andinaminerals.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
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