Finally some great news.
For one small part of the property, Global Hunter has released the PEA results:
2012-09-18 21:11 ET - News Release
Mr. Rudy Brauer reports
GLOBAL HUNTER ANNOUNCES RESULTS OF PRELIMINARY ECONOMIC ASSESSMENT AND UPDATED RESOURCE ESTIMATE FOR LAS POSADAS COPPER DEPOSIT, LA CORONA DE COBRE PROJECT, CHILE
Global Hunter Corp. has released results of a preliminary economic assessment on an updated resource estimate for Las Posadas copper deposit at La Corona de Cobre project.
- Base-case net present value (5 per cent) of $79.6-million;
- Base-case internal rate of return of 75.4 per cent;
- Estimated capital costs of $75-million;
- Mining rate of 8,500 tonnes per day;
- Base-case copper production of 105.2 million pounds over mine life of 3.75 years.
"We are very pleased with the preliminary economic assessment provided by GeoVector, which is an important milestone for Global Hunter," stated Rudy Brauer, president and chief executive officer of Global Hunter. "The base-case net present value (5 per cent) of $79.6-million was based on a copper price of $3.25 per pound. At $3.50 per pound copper, the project NPV (5 per cent) increases to $103.7-million. Our goal is to continue progressing towards production with the implementation of feasibility level studies at Las Posadas while we explore additional exploration targets at the La Corona de Cobre project."
Las Posadas preliminary economic assessment
A preliminary evaluation of the potential economic viability of Las Posadas deposit has been prepared by GeoVector Management Inc. of Ottawa, Ont. For the purposes of this study, it was assumed that open-pit mining at a rate of 8,500 tonnes per day, with processing by heap leaching of soluble copper with the SX-EW process, would be employed to exploit the resource. To optimize the deposit, Gemcom Whittle was used to identify the pit that will maximize the cash flow from the operation.
RESULTS OF THE BASE-CASE AND SENSITIVITY ANALYSIS: WHITTLE PIT OPTIMIZATION RESULTS* Base case Sensitivity analysisCopper price per lb $3.25 $3.00 $3.50 $3.75Pit No. 36 36 36 36Mine life (years) 3.75 3.38 4.33 4.66Strip ratio 3.23 3.19 2.97 2.88Total mined rock 43,815,197 39,108,501 47,457,772 49,804,121Waste mined 33,442,256 29,777,594 35,475,918 36,918,886Process tonnes 10,373,117 9,331,064 11,982,056 12,885,441CuS (%) in situ 0.575 0.602 0.530 0.501CuS (%) recovered 0.460 0.482 0.424 0.401CuS (lb) in situ 131,494,299 123,839,007 140,002,895 142,320,289CuS (lb) recovered 105,195,439 99,071,206 112,002,316 113,856,231Discounted cash flow(best) $79,648,000 $56,601,000 $103,784,653 $128,822,880Internal rateof return %(best) 75.4 57.5 89.6 104.29* Mineral resources that are not mineral reserves do not have demonstratedeconomic viability. The preliminary economic assessment is preliminaryin nature and is based partially on inferred mineral resources that areconsidered too speculative geologically to have the economic considerationsapplied to them that would enable them to be categorized as mineralreserves. There is no certainty that the PEA will be realized.
The base-case Whittle pit optimization was completed at a copper price of $3.25 per pound and a recovery rate of 80 per cent of soluble copper. The copper price of $3.25 per pound approximates the three-year trailing average (2009 to 2011). The recovery rate of 80 per cent copper sulphide is based on recent metallurgical testwork completed by Global Hunter. Pit design and capital and operating costs were provided by Global Hunter and approved by GeoVector.
Based on the resource model and inputs at the time of optimization, including a $3.25-per-pound copper price and an initial $75-million capital expenditure, it was identified that 10.4 million tonnes at a grade of 0.575 per cent copper sulphide would be extracted from an open pit. A strip ratio is in the order of 3.23 (about three to one). A mine life of 3.75 years is based on an estimated mill rate of 8,500 tonnes per day. The pit results in a discounted cash flow of $79.6-million. All of the material within the pit fell within the oxidized domain, and approximately 94 per cent of the material within the pit is categorized as indicated mineral resource.
As a test to the sensitivity of the economic viability of the deposit to changing copper price, additional Whittle pit runs were completed at copper prices of $3, $3.50 and $3.75. As is expected, an increase in the copper price resulted in an increase in the mine life, a decrease in the strip ratio and an increase in pounds of soluble copper produced, as well as improved discounted cash flow and an improved internal rate of return.
Las Posadas updated resource estimate
Prior to conducting the PEA, GeoVector completed a revised resource estimate at Las Posadas, the details of which are found in the attached table:
OXIDE ZONE Indicated InferredTotal Cu (%) Tonnes TCu (%)* SCu (%)** Tonnes TCu (%)* SCu (%)**cut-off Grade Lb Grade Lb Grade Lb Grade Lb0.10% 28,438,896 0.51 317,005,277 0.30 190,302,869 2,937,446 0.34 21,959,603 0.19 12,408,8260.15% 26,116,251 0.54 310,545,714 0.33 188,304,539 2,611,971 0.37 21,058,011 0.21 12,145,4080.20% 23,157,060 0.59 299,097,620 0.36 183,991,873 2,174,727 0.41 19,417,474 0.24 11,653,3870.25% 20,036,240 0.64 283,625,224 0.40 176,959,794 1,524,192 0.48 16,198,588 0.30 10,203,9240.30% 17,132,310 0.70 266,076,803 0.45 168,401,437 1,131,129 0.55 13,827,180 0.37 9,236,3290.35% 14,696,511 0.77 248,667,128 0.49 159,364,589 721,862 0.69 10,917,818 0.49 7,779,5240.40% 12,589,372 0.83 231,289,565 0.54 150,130,852 551,645 0.78 9,493,615 0.57 6,963,960 SULPHIDE ZONE Indicated InferredTotal Cu (%) Tonnes TCu (%)* Tonnes TCu (%)*cut-off Grade Lb Grade Lb0.10% 5,341,114 0.47 55,079,350 16,918,882 0.45 167,682,4610.15% 4,819,246 0.51 53,643,194 16,060,182 0.47 165,133,6290.20% 4,038,383 0.57 50,676,696 14,274,363 0.50 158,351,2210.25% 3,552,109 0.62 48,276,625 10,788,595 0.59 140,443,3080.30% 3,112,095 0.67 45,616,671 7,333,713 0.74 120,323,0970.35% 2,741,607 0.71 42,964,514 6,688,857 0.78 115,655,2850.40% 2,259,212 0.78 38,970,625 6,078,349 0.83 110,631,973* TCu (per cent) is total copper.** SCu (per cent) is soluable copper.
Las Posadas updated mineral resource estimate is based on 47 reverse circulation and 35 diamond drill holes totalling 18,884 metres, with 8,596 assays. Holes were drilled by Global Hunter and others in six drill campaigns conducted between 1994 and 2007. These 82 drill holes are spaced primarily 50 to 100 metres apart along a strike length of approximately 1,700 metres. The drill holes primarily tested to a vertical depth of 150 to 200 metres, with a few holes testing to a vertical depth of 300 metres in the central parts of the deposit.
Geological models were constructed in the copper oxide and copper sulphide mineralized zones. The models were used to constrain the composite values chosen for interpolation and the ore blocks reported in the mineral resource. A block model with block dimensions of five by five by two metres in the x, y and z directions was placed over resource model solids with only that proportion of each block below the topographic/overburden surface and inside the solid recorded. Grades for total copper and soluble copper were interpolated into the blocks by the inverse-distance-squared method using a minimum of four and maximum of 20 composites (within a minimum of two drill holes) to generate block grades in the indicated category and a minimum of two and maximum of 20 composites to generate block grades in the inferred category.
Two-metre composite samples were used in the resource estimation. An average specific gravity of 2.77 was used for the copper oxide resource estimate, and an SG value of 2.89 was used for the copper sulphide resource estimate. SG values are based on SG testing of representative core from the copper oxide (379 samples) and copper sulphide (160 samples) zones. Gemcom Gems 6.3 software was used to complete the resource estimate.
The updated indicated and inferred mineral resource estimate was prepared by GeoVector and is reported in accordance with Canadian Administrators 43-101 and was estimated in conformity with generally accepted Canadian Institute of Mining, Metallurgy and Petroleum estimation of mineral resource and mineral reserve best-practice guidelines, including the critical requirement that all mineral resources have reasonable prospects for economic extraction.
Allan Armitage, PhD, PGeol, and Joe Campbell, BSc, PGeo, of GeoVector Management Inc., is responsible for the technical comments related to the resource estimate and PEA and its limits and is an independent qualified person for the purposes of National Instrument 43-101 (standards of disclosure for mineral projects) of the Canadian Securities Administrators and has verified the data disclosed in this release.
A technical report in support of the PEA and revised resource estimate will be filed on SEDAR within 45 days.
Las Posadas future work plans
Global Hunter proposes to move forward with prefeasibility level studies, which will include infill drilling, to bring all leach pad material within the pit boundaries to indicated or measured resource categories. This will also supply samples for further metallurgical testing. Other work will include environmental baseline monitoring and engineering studies of important infrastructure aspects, including power supply, water supply and transportation, as well as geotechnical and labour and equipment cost studies.
In addition, the company plans to drill test several nearby shear zones. If successful, these targets could be developed into additional mineral resources.
We seek Safe Harbor.