Mansfield Minerals Inc. (TSX VENTURE: MDR) ("Mansfield" or the
"Company") is pleased to announce the results from a National
Instrument 43-101 compliant pre-feasibility study (the "Study") for
its 100% owned Lindero gold project in Salta Province, Argentina.
The Study was completed by AMEC Americas Limited ("AMEC") in
association with American Au Ag Associates and Kappes Cassidy &
Associates. The complete Study will be filed on SEDAR and the
Company's website within 45 days of the issue of this press
release. The Study contemplates conventional open pit mining
operation and heap leach gold recovery. Over the initial three
years of production 31.9 million tonnes of ore will be mined at an
average grade of 0.81 grams/tonne containing 830,000 oz of gold.
Leach kinetics provide for the recovery of 499,700 oz/gold in years
1-3 with the remaining 83,800 oz recovered as leaching proceeds
based on a 70.31% recovery. Heap leaching over the first five years
will produce an average of 161,000 ounces of gold at a cash cost of
US$373 per ounce. Highlights of the project economic estimates are
summarized below.
Pre-tax Project Economics(1)(2)
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Net Present Value
Gold price (US$ million) IRR Payback
($US/oz) Discount Rate (%) (%) (years)
4.0% 6.0% 8.0%
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$850(3) $237 $194 $157 25.9% 2.8
$975 $363 $305 $256 35.4% 2.2
$1,100 $490 $416 $355 44.1% 1.9
1. Project economics have been reported by AMEC on a pre-tax basis.
2. Project economics include a 3% provincial royalty.
3. Base case project scenario.
The Company is planning to have tax modeling completed
independently to determine the after-tax project economics. The
Company will report these results as soon as they are
available.
In reviewing the study results, Gordon Leask, P.Eng., President
and CEO of Mansfield stated:
"I am very pleased that the pre-feasibility study has
demonstrated such robust project economics. Lindero has the
potential to create significant shareholder value. We believe the
project has extremely attractive characteristics, including
projected gold production of 161,000 ounces annually at cash costs
of US$373 per ounce during the first five years of operation.
The mine plan in the pre-feasibility study is based on measured
and indicated gold resources of 2.2 million ounces of gold at a
0.20 g/t cut-off. In parallel with project development, we are
currently considering further drilling with the objective of
converting a portion of the additional 750,000 ounces of gold in
the inferred resource category to the measured and indicated
category at a 0.20 g/t gold cut-off.
We are now focused on advancing permitting at the project and
have engaged Vector Argentina S.A. to further advance the mine
permitting process. As a conventional open pit heap leach project
with good accessibility and project logistics, we believe the
project could be in production in less than 24 months following
receipt of necessary permits and obtaining sufficient
financing.
We look forward to aggressively moving forward with the Lindero
project. In the coming months we will also begin assessing all
project financing and partnership opportunities to maximize
shareholder value."
Operating Summary
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Life of
Life of Years 1-5 Mine
Mine Annual Annual
Total Average Average
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Ore Production million tonnes 101.1 10.7 10.6
Waste Production million tonnes 90.5 13.1 9.5
Strip Ratio (waste: ore) 0.90 0.82 0.88
Gold Head Grade g/t 0.59 0.72 0.59
Metallurgical Recovery % 70.31
Payable Gold
Production(1) 000 oz 1,357 161 124
Mining Cost(2) US$/tonne 1.11 0.98 1.11
Processing Cost US$/tonne 2.24 2.19 2.24
G&A Cost US$/tonne 0.85 0.84 0.85
Cash Operating Cost US$/oz 407 373 407
1. After refining and treatment charges.
2. Considering total material moved.
Capital Costs
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Initial capital(3) US$ 213 million
Sustaining capital US$ 15 million
3. Includes a contingency of US$18 million.
Reserves and Resources(1)(2)(3)(4)(5)
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Cut Off Average Contained
Grade Tonnes Grade Gold
(g/t) (000's) (g/t) (M oz)
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Proven Reserve 0.19 27,929 0.76 0.69
Probable Reserve 0.19 73,169 0.52 1.24
Proven & Probable Reserve 0.19 101,098 0.59 1.92
Measured 0.20 28,400 0.76 0.70
Indicated 0.20 94,200 0.50 1.50
Measured & Indicated Resource 0.20 122,600 0.56 2.20
Inferred Resource 0.20 59,000 0.40 0.75
Measured 0.40 23,800 0.85 0.65
Indicated 0.40 48,100 0.68 1.06
Measured & Indicated Resource 0.40 71,900 0.74 1.71
Inferred Resource 0.40 19,400 0.59 0.37
1. CIM definitions were followed for estimation of Mineral Resources and
Mineral Reserves.
2. Mineral Resources were constrained within an economic open pit shell,
generated using a gold price of US$890 per ounce of gold, a processing
cost of $3.07 per tonne, a mining cost of $1.10, a sales cost of $12 per
ounce and a metallurgical recovery of 70%.
3. Mineral Reserves are estimated using a cut-off grade of 0.19 g/t Au,
based on a gold price of US$775 per ounce.
4. Mineral Resources are inclusive of Mineral Reserves.
5. Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
Additional Details
The Study projects a 9.5 year mine life with cumulative
production of 1.357 million ounces of payable gold based on the
National Instrument 43-101 compliant Reserve Estimate. Ore will be
mined at an annual rate of 10.8 million tonnes, and due to
favourable topography the life of mine strip ratio is 0.9:1 (waste
to ore). The topography is also favourable for the location of the
leach pads and waste dumps with minimal earthworks required.
The current life of mine metallurgical recovery is estimated at
70.31% weighted average for all domains in Reserves based on a two
stage conventional crushing and grind circuit with a grind size of
a -3/8 inch p80 = 7mm. Reagent consumption is expected to be modest
(cyanide consumption of 0.436 Kg/tonne and lime of 2.75 Kg/tonne).
Limestone will be sourced locally and lime produced in a calcining
plant. Recent test work utilizing high pressure grinding roll
(HPGR) crushers has demonstrated the potential for gold recoveries
above the estimated life of mine average recoveries of 70.3% and at
potentially lower operating costs.
Power will be generated utilizing natural gas supplied by a
130km connection to the regional Gasoducto de la Puna gas pipeline
which was built by the Salta government to encourage mining and
other economic development in the Puna region. The estimated
capital cost of the natural gas connection is US$9.9 million. Power
cost is estimated at US$0.062 per kwh based on a natural gas price
of US$5 per MMBTU.
Environmental, Permitting, and Community Relations
The Company is advancing the permitting process with significant
base line environmental monitoring and other work completed to
date. Estimates and results from the Study will be a significant
input for the final permitting applications. The Company has also
focused efforts on consultation with local communities and other
stakeholders to ensure that concerns are properly addressed.
Qualified Persons
Jay Melnyk, P.Eng., and David Thomas, P.Geo., of AMEC Americas
Limited, and Thomas L. Nimsic, RPG, of American Au Ag Associates
are the Qualified Persons responsible for the preparation of the
Study, they are independent of Mansfield within the meaning of
section 1.4. of National Instrument 43-101, and they have reviewed
and approved the technical information within this news
release.
On behalf of Mansfield Minerals Inc.
Gordon P. Leask, P.Eng., CEO, President and Director
Caution Regarding Forward-Looking Statements
This press release includes certain statements that may be
deemed "forward-looking statements". All statements in this
discussion, other than statements of historical facts, that address
future exploration drilling, exploration activities, anticipated
metal production, internal rate of return, estimated ore grades,
commencement of production estimates and projected exploration and
capital expenditures (including costs and other estimates upon
which such projections are based) and events or developments that
the Company expects, are forward looking statements. Although the
Company believes the expectations expressed in such forward looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in forward-looking
statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include metal
prices, exploration success, continued availability of capital and
financing, and general economic, market or business conditions.
Accordingly, readers should not place undue reliance on
forward-looking statements.
This news release and the information contained herein does not
constitute an offer of securities for sale in the United States and
securities may not be offered or sold in the United States absent
registration or exemption from registration.
Neither the TSX Venture Exchange, nor its Regulation Services
Provider accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Mansfield Minerals Inc. Gordon P. Leask, P.Eng. CEO,
President and Director (604) 681-4462 www.mansfieldminerals.com
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