Farallon's G-9 at 3.02Mt of 9.17% Zn, 1.31% Cu M+I
2010-03-29 08:45 ET - News Release
Mr. Dick Whittington reports
FARALLON ANNOUNCES G-9 MINERAL RESERVE AND RESOURCE ESTIMATES
Farallon Mining Ltd. is releasing mineral reserve and resource estimates for its G-9 mine site as at Dec. 31, 2009. The mineral resources have increased as a result of drilling and underground development activity since the previous estimate in March, 2008. In addition, a portion of the resources have now been classified as mineral reserves. The accompanying table is a summary of the mineral resources for the G-9 mine inclusive of mineral reserves.
MINERAL RESOURCES AT DEC. 31, 2009, INCLUSIVE OF MINERAL RESERVES Contained metal* Zn Cu Ag Au Category 000s Zn Cu Ag Au mm mm 000 000 tonnes % % (g/t) (g/t) lb lb oz oz Measured 1,418 8.65 1.23 239 3.64 270 38 10,896 166 Indicated 1,606 10.04 1.39 185 2.72 355 49 9,552 140 ----- ----- ---- --- ---- --- -- ------ --- G-9 mine M&I 3,024 9.39 1.31 210 3.15 626 87 20,417 306 Inferred 930 9.17 1.14 187 2.50 188 23 5,591 75 * There may be some minor differences in totals due to rounding.
The accompanying table is a summary of the mineral reserves for the G-9 mine.
MINERAL RESERVES AT DEC. 31, 2009 Contained metal* Zn Cu Ag Au Category 000s Zn Cu Ag Au mm mm 000 000 tonnes % % (g/t) (g/t) lb lb oz oz Proven 525 10.36 1.28 274 3.69 120 15 4,619 62 Probable 1,425 9.87 1.37 187 2.77 310 43 8,547 127 G-9 mine ----- ----- ---- --- ---- --- -- ------ --- Total 1,950 10.00 1.34 211 3.03 430 58 13,197 190 * There may be some minor differences in totals due to rounding.
The accompanying table is a comparison of the current mineral resource estimate to the previous estimate in March, 2008.
G-9 MEASURED AND INDICATED RESOURCE ESTIMATES** AND TOTAL ORE MINED AT G-9 000s Zn Cu Ag Au Estimate date tonnes % % (g/t) (g/t) March, 2008 2,575 9.9 1.39 209 3.09 Dec. 31, 2009 3,024 9.39 1.31 210 3.15 Ore mined at G-9 to Dec. 31, 2009 640 10.5 1.40 200 2.59 ** Mineral resource estimates stated at 3-per-cent zinc grade cut-off.
The accompanying table summarizes the estimated mineral resources for the company at its other deposits on its 100-per-cent-owned Campo Morado property.
MINERAL RESOURCES AT DEC. 31, 2009 Contained metal* Zn Cu Ag Au Category 000s Zn Cu Ag Au mm mm 000 000 tonnes % % (g/t) (g/t) lb lb oz oz Southwest zone Inferred 242 6.10 0.83 169 2.51 33 4 1,315 20 Indicated 2,860 6.69 0.34 124 0.79 422 21 11,402 73 El Largo Inferred 241 6.43 0.42 151 1.41 34 2 1,170 11 El Rey Indicated 323 5.88 0.53 162 2.98 42 4 1,682 31 Naranjo Indicated 577 6.00 0.66 178 3.11 76 8 3,302 58 Reforma Indicated 1,173 5.9 0.58 262 4.74 153 15 9,881 179 Total ----- ---- ---- --- ---- --- -- ------ --- Indicated 4,933 6.37 0.45 166 2.14 693 49 26,267 340 Inferred 483 6.26 0.63 160 1.96 67 7 2,485 30 * There may be some minor differences in totals due to rounding.
Farallon's president and chief executive officer, Dick Whittington, commented: "We are very pleased to announce the first estimate of proven and probable reserves for the G-9 mine. At the same time, we have also increased our mineral resources by 18 per cent even though we have mined 640,000 tonnes of ore since mid-2008 and despite having curtailed exploration activity for over 15 months to focus on commissioning the mine and the mill. Our success since restarting exploration drilling in October, 2009, gives us confidence that we will be able to continue to build our resource base further in 2010.
"We have also initiated a study on the mineral resources at El Largo, El Rey, Naranjo and Reforma with the intention of determining the economic viability of processing these deposits through the existing G-9 milling facility. With a strong base of mineral reserves and resources and significant exploration potential, Farallon will look to capitalize on the opportunity to enhance shareholder value through organic growth at G-9 and the Campo Morado district in 2010. This organic growth strategy will complement our strategy of growth via mergers and acquisitions with the goal of becoming a mid-tier, multimine company," said Mr. Whittington.
For the G-9 mine, the mineral resource estimates were compiled by David Gaunt, PGeo, vice-president of resources and databases, Hunter Dickinson Services Inc. Mr. Gaunt is a qualified person as defined under NI 43-101. The mineral resources for G-9 were estimated based on mining activity and exploration drilling completed to Dec. 31, 2009, and are presented at a 3-per-cent zinc grade cut-off.
The mineral reserves were estimated using the mineral resource model provided by Mr. Gaunt. The estimate of mineral reserves was prepared by Stephen Godden, FIMMM, CEng, of S. Godden & Associates Ltd., an independent qualified person as defined under NI 43-101. The mineral reserves are stated at a 3-per-cent zinc grade cut-off for the Abajo, West Extension and Southeast zones and a 5-per-cent zinc grade cut-off for the North zone. Economic viability was assessed by calculating the average net smelter return for each mineralized area or zone of interest, over a range of zinc grade cut-offs and a range of metal prices, including a scenario of: 75 cents per pound zinc, $2.25 per pound copper, $750 per ounce gold and $12 per ounce silver. The NSR results were then compared with the estimated ranges of cash costs for the G-9 operation. Further details will be provided in a technical report to be filed on SEDAR. Mr. Gaunt and Mr. Godden have reviewed the requisite information on their mineral resource and mineral reserve estimates that are included in this news release.
The mineral resources for the Southwest zone, El Largo, El Rey, Naranjo and Reforma deposits are presented at a 5-per-cent zinc cut-off. These estimates were completed in 2005, as detailed in the company's news in Stockwatch on Sept. 19, 2005, and in technical reports filed on SEDAR.
Farallon's G-9 zinc, copper, silver, gold and lead mine at the Campo Morado property in Mexico reached commercial production in April, 2009. The company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.
We seek Safe Harbor.
Under the current cash reserves of over $8 million, the company could keep up their activities for another 2 years, if they kept the expenses to roughly a million per quarter. No plans of actual exploitation of properties were announced yet.
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