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EOM7,
Response came from MSQ President
Regards,
DrBill
See my highlighted responses below.
In a message dated 19/07/2011 6:06:24 P.M. Pacific Daylight Time, williamhennrich@gmail.com writes:
Sirs:
My family and I currently own 30K shares of Mosquito Consolidated Gold (MSQ) common. My wife & children have asked me to further research MSQ prior to increasing our holding of MSQ shares in the family portfolio.
I have been relying on the MSQ corporate web site, SEDAR filings and a few available brokerage & investment letter reports. We are hoping to develop a better understanding of MSQ and esp. the potential for a successful future funding of the CUMO project. In that respect we have a few questions:
1) A couple of years ago it appears a Chinese company took a large position, about 15%, of MSQ common shares. Does this Chinese company still maintain that position? Yes.
Can you provide the names & holdings of the five largest shareholders? Not important that you know the names. If you give me a reason other than curiosity, I will divulge their names. These people are not the funding source for future developments.
2) Barkerville Gold Mines (BGM), successor to International Wayside Gold, appears to own half of the Cariboo & Bonanza Ledge properties, MSQ the other halves (see below). Is it true that MSQ now owns half of each of these properties? Yes.
Did BGM ever complete the bankable feasibility study necessary for it to own its half of the Cariboo project? NO
As BGM is bringing these mines into production in the near future, is it reasonable for an investor to assume that MSQ will realize a significant cash flow stream (a modest net smelter royalty & half ownership interest) from those mines----cash flow that could be used for MSQ corporate purposes incl. funding CUMO? Do you have an estimate of what amount of cash flow from these mines might accrue to MSQ in 2011 and 2012? I don't count eggs before they are hatched. I have very little faith in projections made by others so we will see what happens but we have no downside. I consider our portfolio of projects "nuts on the sundae" with the value of Cumo dwarfing the other assets of Mosquito - how we exploit these assets is in the works.
3) Is there a fairly accurate current research report on MSQ now available that you could recommend to us? No, our website contains technical reports such as the latest resource report by Snowden and the PEA by Ausenco. These firms are among the world's best engineering groups so I would, at this stage of development, let these reports be your point of reference. Most institutional investors liquidated their positions when molybdenum prices fell to $8.50 which is about 35% of global production costs.
Without institutional investment, there will be no interest by the analysts that work for them. Institutional involvement is the next phase which we are now entering. Molybdenum is not a hot market sector; I think it will be but right now gold, rare earths, silver and perhaps copper
I encourage you to try an understand our Company and what we are trying to accomplish and in many respects it is a "too good to be true" story so if you need any clarification of any aspect of our Company, please call or email me and you can expect straight and honest responses.
Regards
Brian A. McClay
President
Mosquito Consolidated Gold Mines Limited
100-1616 West 3rd Avenue
Vancouver B.C.
V6J 1K2
1-800-667-0873 (toll free)
604-689-7902 (office)
604-689-7816 (fax)
604-730-6982 (cell)
775-315-7458 (cell-USA)
www.mosquitogold.com
September 01, 2004
Mosquito Receives $500,000 Property Payment
Mosquito Consolidated Gold Mines Ltd. (MSQ-TSX-Venture) is pleased to report the receipt of $500,000.00 payment from International Wayside Gold Mines Ltd. (IWA-TSX-Venture).
Mosquito presently has two separate agreements with IWA. An October 1994 agreement granted IWA the right to earn a 50% interest in the Cariboo Gold Quartz claim group. In order to maintain this agreement IWA must spend $500,000 per year until a bankable feasibility study is presented. This agreement is still in effect.
In August 2003, the Mosquito entered into a second Property Option Agreement with IWA for the remaining 50% interest in the Cariboo Gold Quartz Mineral Claims and a 100% interest in the Mosquito Mine Mineral Claims (the "Property") excluding the placer mining rights. The mill, all buildings and hoist on the claims is included as part of the Property. The second option agreement provides for the following:
Wayside must make the following cash payments to the Company:
$50,000, on the signing of the agreement (paid);
$450,000 on or before September 15, 2003 (paid);
$500,000 on or before August 31, 2004; (paid)
$500,000 on or before August 31, 2005;
$500,000 on or before August 31, 2006; and,
$3,500,000 on or before December 31, 2006;
Wayside will also have the exclusive right to extract at any time prior to the exercise of the Option, a bulk sample (the "Bulk Sample") from the Properties in two stages, subject to the following terms and conditions:
The initial stage of the bulk sampling program ("Stage 1") will involve the extraction of not more than 40,000 tons of sample material or the recovery of not more that 15,000 ounces of refined gold, whichever is achieved first;
Provided that at least 15,000 ounces of contained gold in a "probable mineral reserve" (as that term is defined in National Instrument 43-101) have been added to the probable "Bonanza Ledge" mineral reserve disclosed in the Preliminary Assessment Report by David J. Pow dated April 8, 2003 (Table-11.2), Wayside will be entitled to extract the second stage ("Stage 2") of the Bulk Sample;
Stage 2 will involve the extraction of not more than 40,000 tons of sample material or the recovery of not more that 15,000 ounces of refined gold, whichever is achieved first;
After 5,000 ounces of refined gold have been recovered from the Bulk Sample, Mosquito, in addition to the Bulk Sample Royalty, will be entitled to receive $100 for each additional ounce of refined gold recovered from the Bulk Sample, and all of such payments received by Mosquito will be deducted from the cash payments.
Mosquito will be entitled to receive a royalty of 5% of "Net Smelter Returns" (NSR) derived from the Bulk Sample. On exercise of the Option, Mosquito's royalty will revert to a 3% Net Smelter Return.
In April 2004 International Wayside Gold Mines Ltd. announced that bulk sample mining at the Bonanza Ledge Zone has been completed. Approximately 10,000 tonnes from the bulk sample with an anticipated grade of 23.66 g/tonne (0.67 oz/ton) Au has been shipped to the Mount Polley Mine for processing.
Thanks. I'm going to contact MSQ to see if they can provide clarity on current ownership of the BGM/MSQ mines & possible future cash flows. Will post what I receive if anything.
Regards,
DrBill
looks like it:
Overview
The Cariboo Gold Project is easily accessible by existing roads in the Wells-Barkerville area of east-central British Columbia, Canada. An integral part of the famous Cariboo Gold Rush of 1861, the property comprises three prolific claim groups including Mosquito Creek (namesake of Mosquito Consolidated Gold Mines Limited), Cariboo Gold Quartz and Island Mountain. To date, recorded production totals 3.8 million ounces of gold.
In October 1994, Mosquito Gold optioned 50% interest in the Cariboo Gold Quartz claim group to International Wayside Gold Mines. Mosquito Consolidated granted Wayside the exclusive option to acquire the remaining 50% interest in Cariboo Quartz Gold and 100% interest in both the Island Mountain and Mosquito Creek claim groups under the terms of a second agreement dated August 2003. The second option agreement was completed on December 31, 2006. The first agreement still requires a postive bankable feasibility study to be delivered before the 50% intrest is earned.
On January 20, 2010 International Wayside Gold Mines changed its name to Barkerville Gold Mines Ltd. and is continuing to develop the property.
Presently Mosquito retains a 3% net smelter royalty and the 50% interest described above in the October 1994 Agreement . The royalty gives Mosquito 3% of gross revenues from all minerals produced from the property less smelter charges and transportation costs to a smelter.
http://www.mosquitogold.com/s/CaribooGold.asp?ReportID=144372
http://www.mosquitogold.com/i/pdf/MSQPresentationmay09_web.pdf
Page 31 of above presentation refers to ownership of Cariboo. Not mentioned much since but I believe I also saw it in more recent SEDAR filing.
[Note: Wayside referenced above was predecessor to BGM]
_______________________________________________________________
And, referring to Bonanza Ledge ownership
http://www.mininginteractive.com/index.php?option=com_acymailing&ctrl=archive&task=view&mailid=35&key=f7b39dd236893876668fdfeea40dc064
[Specific wording follows]
"Joint Venture partner Barkerville Gold Mines Ltd (Barkerville) has announced that they intend to place the Bonanza Ledge gold property into production at a rate of 70,000 tonnes per year. Under a 1994 Agreement with Barkerville Mosquito currently owns a 50% interest and a 3% royalty in the Bonanza Ledge and also in the nearby Cariboo Gold Quartz Mine. Under the terms of that agreement Barkerville must complete a positive bankable feasibility study prior to earning its 50% interest in the property (the 3% royalty on the entire project is retained by Mosquito)."
_________________________________________________________________
Question Is: Who owns these properties? Looks like BGM may not own 100%. If MSQ owns 50% or ???% what cash flows can MSQ reasonably expect as BGM brings the projects into production. I'm trying to reach Management to discuss.
Any info posters may have on project ownership appreciated.
Regards,
DrBill
Can you copy paste what you are reading?
QUESTION: AM I RIGHT OR READING THIS WRONG?
_____________________________________________________________
Bonanza Ledge & Cariboo: Both properties were MSQ but JV'ed to BGM. As I read the news, MSQ presentations & filings it seems MSQ retains 50% of each. Both sites are under development by BGM and according to BGM should produce 40K to 50K oz.gold in total annually starting in less than a year. So, if MSQ portion is 20K to 25K oz. gold annually that should throw off one helluva lot of cash which MSQ can use to advance MSQ objectives. Wouldn't this be enough to handle CUMO needs? I don't know why MSQ would need any more financing than this free cash flow?
Anybody on top of this, please let me know: am I right? Or, am I reading this wrong?
Regards,
DrBill
Sorry i dont realy follow this one anymore....
What's the negative on this company?
Presentation
http://www.mosquitogold.com/i/pdf/Presentation.pdf
Yes and im looking for a much better price for the stock next yr ....
Very attractive site.
Has there been any recent news releases?
seems they are about 2 years out from production , and moly is found in faily high #'s w/copper.. to me it just sounds like a pump. even though, i agree the property sounds very promising.and will gladly play any bounce, when i can..thanks
From a technical view, there is a nice bounce off the 200MA,
If you read the comments right at the bottom of the gumshoe article you get a snap shot of how others are currently assessing the company in regard to their molybdenum project, either rightly or wrongly http://www.stockgumshoe.com/2010/04/turn-4k-into-107280-with-the-biggest-metals-investment-of-the-21st-century.html
It seems lots of money is possible over the long term assuming they manage environmental issues which seems to be the question mark, this is my observation only, without digging in too deep.
Mosquito hold a number of potential gold resources in their portfolio, mostly in Canada — but it doesn’t look like they’ve been doing much of anything to advance those projects of late, the real focus has been on their molybdenum projects,
The company web site is
http://www.mosquitogold.com/s/GlobalOperations.asp
http://www.infomine.com/index/companies/mosquito_consolidated_gold_mines_limited.html
I am not an investor here but continue to watch progress.
Kiwi
kiwi,seen you on g--?, what your assesment here?thanks
Your welcome, looks good .....
Nice post. Thanks!
Bob Moriarty Jan 4, 2010
On Wednesday of the last week in December I went to see a company named Mosquito Consolidated Gold Mines (MSQ-V). As you can probably surmise from the name, they own 100% of a giant copper-rich moly porphyry project near Boise, Idaho.
I'm a bit of a naysayer as well and the first thing they need to do is dump that name. It may have historical connotations to it but it's a rotten name for the owner of the world's largest open pit moly-copper project.
The project is called the CuMo project for copper (Cu) and moly. (Mo) Since the value of the moly is about four times greater than the copper, it seems to me that to be fair, the project name should be MoCu but that doesn't work very much better than Mosquito. I wouldn't be unhappy if they dumped that name as well and named both the project and the company Monster Moly.
The company has drilled out a 43-101 resource of about 2.9 billion tons. That is monster. The value of all the contained metal is about $78 billion dollars using today's prices. There is moly, copper, silver, tungsten and an unusual element called rhenium.
Voisey's Bay only contains $38 billion dollars worth of nickel at today's price. When you want to compare Mosquito, think Voisey's Bay and double it.
I don't doubt for a moment that there are naysayers who would be quick to point out that minerals in the ground don't represent real value because you don't mine them all and you don't recover them all. That's perfect true. And perfectly meaningless at the same time.
But for the sake of argument, I went to Shaun Dykes, Exploration Manager for Mosquito. He worked up a similar spreadsheet for me showing the gross metal value on a recovered basis. It's still $66.9 billion. Wow.
If the naysayers are still not happy, on the 23rd of November, the company came out with a Preliminary Economic Assessment of Cumo. (PEA) This PEA shows two different models. One calls for production of 100,000 tons a day. That model shows a Net Present Value (NPV) of a mere $10 billion dollars. The model using a figure of 150,000 tons a day shows an NPV of $16 billion.
So take your pick, all of these numbers mean something. You can use $78 billion for a figure of metal in the ground on a gross basis. Or you can use $67 billion for gross metals on a recovered basis. Or you can use $16 billion dollars NPV for 150,000 tons per day production. Or you can use $10 billion NPV for 100,000 tons per day. The value of the company on Thursday Dec 31 was $71 million Canuk dollars. I'd say that's pretty cheap. Net Present Value ought to mean something but for now, it's not even close.
Based on the 150,000 tons per day production rate, the IRR is a healthy 36% with a 2.3 year payback period and a potential mine life of 113 years. Using the 100,000 tons per day figure, the IRR slides to a still healthy 29%, a payback period of 3 years and a potential 169 years mine life. The Capex for 150,000 TPD is $2.8 billion dollars and $2.2 billion for a 100,000 TPD rate.
The naysayers could say that the figure of $16 per pound for moly is unrealistic and moly could crash. That's perfectly true. And perfectly meaningless. Moly has crashed. Two years ago moly was $33 a pound. Moly dropped to $8 a pound in May of 2009 before recovering to $19 a pound in August of 2009. If the figure Mosquito was using was based on a price of $30 for moly it would be accurate to say there is a lot of potential downside. But using $16 moly isn't a bad number. At a production rate of 100,000 TPD, Mosquito can produce moly for $4.30 a pound.
On a per ton basis using current prices, the metal in the ground is worth about $22.59. Mosquito's estimated mining cost at 100,000 TPD is about $7.80. Those are far better margins than most gold and silver companies. And this a mine with a potential 150 year life.
The Capex is going to be big. 100,000 TPD is a giant mine. But these are giant numbers. $2 to $3 billion to get started is a good number. This is a situation where you want to be thinking off take and determining just who your customers will be. China comes to mind immediately. So the question now has to be, how do you get the Chinese interested? The answer is pretty simple, the Chinese already are involved.
China needs a reliable source of moly. China is the world's biggest steel producer and you need moly for steel. China has $2.3 trillion in foreign exchange reserves with much of it denominated in US dollars.
It's pretty much a use it or lose it basis. I don't think anyone seriously believes the US dollar will be around very much longer. With $124 trillion in debt on an economy only producing $14 trillion a year in GDP, it's obvious to anyone that can count that the US either defaults on the debt or goes into hyperinflation. I think it will be hyperinflation. If I owned a lot of US bucks, I'd be looking for something real to spend those soon to be worthless pesos. In that case, a high Capex project is far more desirable than a low Capex project.
Our resident naysayers may well want to point out that the US Treasury just blocked Chinese investment in a gold mine in Nevada called FirstGold. The Chinese were buying 51% of the mine for about $9.5 million. The Treasury maintained the mine was too near Fallon Naval Air Station located some 50 miles away as an excuse to kill the deal. I have no doubt others will disagree with me but the money involved was so tiny that for the US government to take the position that they are concerned with a $9.5 million dollar Chinese investment in a US company would be suicide on the part of the government. It's entirely possible that security issues were the concern.
The Chinese could buy up to 49.9% of Mosquito on the open market with no legal issues under various companies. In that case, as financier of the project, they would still be in the driver's seat. If the US government tried to stop Chinese investment in a Canadian company with an Idaho mining project, the day after the announcement, the dollar would drop 20% overnight as the Chinese flooded world markets with now worthless US government toilet paper.
In Economics 101 we are taught that when a country spends their national currency abroad, eventually that currency has to be traded for something they own or produce. Those US dollars abroad eventually have to return to the US in exchange for something. I suspect the Chinese have about as much US used toilet paper as they can stand.
All companies have very real issues. I had a long heart to heart talk with Shaun Dykes about Mosquito and I'm satisfied that the company is at least thinking about how to proceed. Their issues are identified and under control
When I was a young Marine fighter pilot, we used a phrase all the time that said, "If you have the name, you have to act the part." It was true then and it's true now. In my mind, this is a giant project. Mosquito needs to make a giant transition from acting like a junior collecting beanie baby mining projects to a major production company. Mosquito needs to expand the management bandwidth as fast as they can. They need to dump all the other meaningless projects into JVs with other juniors or spin them off into another company.
I have to compliment the company on having the foresight to pick up the project and to move it to this scale. With any multi-element project, it's often hard for investors to get a handle on just what the company is mining and what it's worth. With the price fluctuations of the last year, it has been especially difficult. But the Chinese are way ahead of ordinary investors on this deal. They were buying at $.35. They have so much skin in the game that no matter how the company moves forward, they are pretty much assured a giant profit. It is in their best interest to find another Chinese company that needs a 100-year supply of moly.
I liked the deal enough that 10 minutes after they started filling me in on the details, I called my broker and bought some shares. I don't see this as anything but a slam-dunk. 5% of the NPV of the 100,000 TPD rate would still be $500 million. Frankly I don't see why the company isn't there already.
Unlike Montana, Idaho is an extremely mining friendly state. I don't see any long-term legal issues; there is nothing in the mining that is particularly difficult or dangerous. It's an ordinary mining story times 100, that's all.
Back of the envelope calculations show mining could begin in 2015. I suspect the investment community will understand this story immediately. The company has put to rest the naysayers by providing a giant 43-101 and a PEA with rock solid numbers. They do need to do a lot of promotion but this is a story that tells itself.
There will be a new updated 43-101 released in March. Drill results from a monster hole will be out in about two weeks. Look for them. I expect something in the 400-500 meter range of $30-$40 rock. Time will tell but watch for them if you are not satisfied that they have the real deal right now.
We own shares. We are biased. The company would be insane to not advertise but literally I'm headed out the door on a trip to Europe and Africa and haven't had a chance to discuss advertising with the powers that be at Mosquito.
As always, you don't share your profits with us and we don't share your losses. You alone are responsible for your own due diligence. The company is approachable and I would encourage any potential investor to look seriously into the information available. I'd like to see the company do a major fund raising at a higher price and move this forward as soon as possible. Just after they change that awful name.
http://www.321gold.com/editorials/moriarty/moriarty010410.html
Great to see someone else excited about this company. This is a hidden gem!
This company is really going to get a buzz is Moly prices continue higher too!
Mosquito President & CEO Brain McClay Interviewed
Dow Jones Newswires January 15, 2010
http://www.mininginteractive.com/investment-newsletter/mosq/mosq_20100115_dow_jones_news.pdf
Mosquito Company Overview:
http://www.mininginteractive.com/company-focus/mosq/mosq-at-a-glance.pdf
Corporate Presentation (2.7mb)
http://mininginteractive.com/investment-newsletter/mosq/mosq_corporate_presentation.pdf
Brian McClay, Mosquito President & CEO
-"With CUMO, it is or goal to have the lowest cost, large-scale producing molybdenum mine in between a five and six year time frame.
- We expect to mine to produce at a rate of about 120,000 tons per day of ore containing molybdenum, copper, tungsten and silver, which are also found in the deposit.
- We are aiming to produce molybdenum at about $3/1b, and if we anticipate $15/1b molybdenum (prices), that is clearly economic.
- We will be the lowest cost producer, primarily because of the size of the deposit and consequent economy of scale. "
Note: The above info was copied from mining interactive promo 1/15/10 http://www.mininginteractive.com/
Mosquito Consolidated Gold Mines Limited (MQCMF)
on watch - kiwi
Looks like the terms may be good!
Mosquito is currently negotiating with several major parties interested in funding the future development of the CUMO project.
If terms are good we go much higher!
Mosquito Files Independent Preliminary Economic Assessment of CUMO Molybdenum-Copper-Silver Project
Source: Mosquito Consolidated Gold Mines Limited
On 7:45 pm EST, Monday November 23, 2009
Buzz up! 0 Print.
VANCOUVER, British Columbia, Nov. 23, 2009 (GLOBE NEWSWIRE) -- Mosquito Consolidated Gold Mines Limited (Mosquito) (TSX-V:MSQ - News) is pleased to report receipt of the completed National Instrument 43-101 technical report on its Idaho-based CUMO molybdenum-copper project and its filing with SEDAR (www.sedar.com).
The PEA was managed by Ausenco Minerals Canada Inc. (Ausenco), a Vancouver-based engineering firm with corporate headquarters in Brisbane, Australia. The Ausenco group of companies provides world-leading engineering, project management and operations solutions to global resource, energy and process infrastructure industries; and has a workforce in excess of 2,200 people in more than 26 offices across 13 countries.
As a result of detailed examination of the 43-101 report, Mosquito has decided to proceed to feasibility targeting an initial production rate of 125,000 short tons per day with an additional 50,000 short tons per day added at or after year 7. All future drilling, engineering, and environmental studies will be designed to outline the data and information required to produce a bankable feasibility study.
Based on a pre-tax financial model (earnings before interest, tax, depreciation and amortization) and using a long-term, base-metal price scenario, Ausenco's study showed the CUMO project having a Net Present Value (NPV) of US$16 Billion for a 150,000 short tons per day ore production rate and US$10 Billion for a 100,000 short tons per day ore production rate. Corresponding Internal Rates of Return (IRR) were 36% and 29% respectively -- significantly above the minimum 12.5% to 15% IRR typically required for United States-based projects to be considered for production -- and straight-line payback periods for start-up capital costs were 2.3 and 3.0 years respectively. These very substantial figures indicate that Mosquito should be developing CUMO toward an initial ore production rate of between 100,000 and 150,000 short tons per day.
The following two tables show highlight figures from Ausenco's CUMO-PEA, for 150,000 and 100,000 short tons of ore per day for the initial 40 years of mine life. All prices and values are in US$. Based on a pre-tax financial model and long-term base-metal prices of $16/lb molybdenum oxide, $2.10/lb copper, $12.00/ounce silver, $6.00/gram rhenium and $135/ton sulphuric acid, the results are as follows:
150,000 short tons per day
--------------------------
Net Present Value ((NPV 5%) $16 Billion dollars
Internal Rate of Return 36 %
Cost/lb: Molybdenum oxide/ Copper $3.9 / $0.5
Start-up Capital Cost $2,800 Million dollars
Payback Period (see Notes) 2.3 years
Total Possible Mine life 113 years
100,000 short tons per day
--------------------------
Net Present Value (NPV 5%) $10 Billion dollars
Internal Rate of Return 29 %
Cost/lb: Molybdenum oxide/ Copper $4.3 / $0.6
Start-up Capital Cost $2,200 Million dollars
Payback Period (see Notes) 3.0 years
Total Possible Mine life 169 years
Cost/lb: Molybdenum oxide/ Copper is the total operating cost per pound, assuming all by-products are credited against the costs of production of the reference metal.
Total Possible Mine life is the possible life of production based on production schedule from the pits. The economic analysis only studied the initial for 40 years. This is an estimate and is dependant on additional drilling to convert inferred resources to measured and indicated.
Three other price scenarios were undertaken to analyze the project's sensitivity to metal prices. These consisted of high, low and ten-year cyclical prices.
High Price
High metal prices are $28/lb molybdenum oxide, $3.50/lb copper, $15.00/ounce silver, $10.00/gram rhenium and $235/ton sulphuric acid.
-----------------------------------------------------------------
100,000 150,000
Pre-tax, 5% discount rate short tpd short tpd Units
------------------------- --------- --------- ----------------
Net Present Value (NPV) $22 $35 Billions US$
Internal Rate of Return 51% 61% %
Payback Period 1.6 1.2 Years
-----------------------------------------------------------------
Cyclical Price
Cyclical metal prices consist of a range of prices between the low and the high in a ten-year cycle starting on a rising price trend and passing through the low every ten years. Prices are $7.50/lb to $28/lb molybdenum oxide, $1.50/lb to $3.50/lb copper, $9.00/ounce to $15.00/ounce silver, $2.50/gram to $10.00/gram rhenium and $85/ton to $235/ton sulphuric acid.
-----------------------------------------------------------------
100,000 150,000
Pre-tax, 5% discount rate short tpd short tpd Units
------------------------- --------- --------- ----------------
Net Present Value (NPV) $12 $21 Billions US$
Internal Rate of Return 39% 49% %
Payback Period 1.9 1.5 years
-----------------------------------------------------------------
Low Price
Low metal prices are $7.50/lb molybdenum oxide, $1.50/lb copper, $9.00/ounce silver, $2.50/gram rhenium and $85/ton sulphuric acid.
-----------------------------------------------------------------
100,000 150,000
Pre-tax, 5% discount rate short tpd short tpd Units
------------------------- --------- --------- ----------------
Net Present Value (NPV) $1.1 $2.9 Billions US$
Internal Rate of Return 9% 12% %
Payback Period 9.6 6.4 years
------------------------------------------ ----------------------
Studies and reviews for the PEA were conducted by Ausenco and Vector Engineering Inc. (Vector), a member of the Ausenco group of companies. Based in Grass Valley, USA, Vector specializes in environmental and consulting services. Vector undertook a review of mine design, developed mine, waste stockpile and tailings storage facility (TSF) capital and operating-cost estimates to an accuracy of +/- 35%. Ausenco conducted the metallurgical test-work review, process-plant design, process-plant capital and operating-cost estimates to +/- 35% accuracy as well as the economic analysis.
Potential Opportunities
Mosquito personnel have identified several areas and opportunities that may provide significant costs savings and improved economics for the project, including the following:
Mining
-- Optimization of the pit designs and definition of a mineable
reserve becomes available
-- Optimization of waste and stockpile haulage methodology to
reduce the amount of trucking involved.
-- Optimization of the in-pit haulage through the utilization of
trolley assisted programs, and/or in-pit crushing
-- Detailed equipment costing to determine potential discounts to
list price for all major components.
Milling
-- More metallurgical work to determine optimum grind size (the
current assessment is based on the finest grind tested to date)
and analyze recoveries of the various metals.
-- Optimize reagents to reduce costs and improve metallurgy.
-- Work on the potential for a tungsten recovery circuit is
required (currently excluded)
Tailings
-- Detailed analysis of tailings storage facilities and design to
reduce overall costs.
Other
-- Pre-strip waste material could be used for a potential
hydroelectric power dam development, reducing mine capital cost
and providing lower power costs to the project.
Hydroelectric power can be developed, using non-fish bearing
creeks that are in the area.
These and other areas will be examined in more detail as part of the next engineering phase.
Based on the excellent results of the Preliminary Economic Assessment of CUMO, Mosquito plans to complete the 2009 drilling and update the current mineral resource. At the same time, work will continue on the environmental baseline, engineering, and metallurgical work required to bring the project to feasibility.
Mosquito is currently negotiating with several major parties interested in funding the future development of the CUMO project.
Mr. Shaun M. Dykes, M.Sc. (Eng), P.Geo., Exploration Manager and Director of Mosquito is the designated qualified person for the CUMO Project, and prepared the technical information contained in this news release.
On Behalf of the Board
MOSQUITO CONSOLIDATED GOLD MINES LTD.
Brian McClay
President
About Mosquito Consolidated Gold Mines
Headquartered in Vancouver, Canada, Mosquito Consolidated Gold Mines Limited (www.mosquitogold.com) is a mining exploration and development company with a diverse portfolio of high-potential precious and base metals projects, located in low-political-risk environments in North America and Australia. The Company's primary focus is the development of its Idaho-based CUMO deposit, recognized as one of the largest molybdenum-copper-silver porphyry deposits in the world, and its Nevada-based Pine Tree porphyry copper-molybdenum-silver project.
Huge potential here. Perfect buy out candidate at huge multiples from here. I actually hope it retraces a little so I can pick up some under $1.
New Press Release
(http://www.prnewswire.com/news-releases/mosquito-consolidated-gold-mines-limited---independent-preliminary-economic-assessment-of-cumo-molybdenum-copper-silver-project-confirms-multi-billion-dollar-net-present-value-and-excellent-internal-rate-of-return-63717972.html)
Mosquito went up very fast, but even now the marketcap is only 70M C$, compared to an Net Present Value of the Cumo Project of 17.5 BILLION C$. Negative fact is the high capital expenditure needed to bring Cumo into production (somewhere between 2.2 and 2.8 Billion USD)
Independent Preliminary Economic Assessment of CUMO Molybdenum-Copper-Silver Project Confirms Multi-Billion Dollar Net Present Value and Excellent Internal Rate of Return
5:00 PM ET, October 7, 2009
Oct 07, 2009 (TheNewswire.ca via COMTEX) -- (via Thenewswire.ca)
MOSQUITO CONSOLIDATED GOLD MINES LIMITED
MSQ -TSX Venture Exchange
Tel: 604-689-7902 www.mosquitogold.com Fax: 604-689-7816
Independent Preliminary Economic Assessment of CUMO Molybdenum-Copper-Silver Project
Confirms Multi-Billion Dollar Net Present Value and Excellent Internal Rate of Return
Vancouver, October 7, 2009 - Mosquito Consolidated Gold Mines Limited (Mosquito - TSX Venture: MSQ) is pleased to report that it has received an extremely positive NI 43-101 compliant Preliminary Economic Assessment ("PEA") of its Idaho-based CUMO molybdenum-copper-silver project. The PEA was managed by Ausenco Minerals Canada Inc. (Ausenco), a Vancouver-based engineering firm with corporate headquarters in Brisbane, Australia. The Ausenco group of companies provides world-leading engineering, project management and operations solutions to global resource, energy and process infrastructure industries; and has a workforce in excess of 2,200 people in more than 26 offices across 13 countries.
Based on a pre-tax financial model (earnings before interest, tax, depreciation and amortization) and using a long-term, base-metal price scenario, Ausenco's study showed the CUMO project having a Net Present Value (NPV) of US$16 Billion for a 150,000 short tons per day ore production rate and US$10 Billion for a 100,000 short tons per day ore production rate. Corresponding Internal Rates of Return (IRR) were 36% and 29% respectively - significantly above the minimum 12.5% to 15% IRR typically required for United States-based projects to be considered for production - and straight-line payback periods for startup capital costs were 2.3 and 3.0 years respectively. These very substantial figures indicate that Mosquito should be developing CUMO toward an initial ore production rate of between 100,000 and 150,000 short tons per day.
Ausenco's PEA of CUMO outlined several options for the further development of the project under four different production rates: Ore production rates of 50,000, 100,000, 150,000 and 200,000 short tons per day were considered for the data analysis. All associated costs were also tabulated corresponding to these production rates, including: preliminary pit designs, scoping-level tailings, storage facilities and waste rock sites, power and water requirements, mine scheduling, mine plant, capital and operating costs.
"Ausenco's assessment of CUMO provides independent confirmation of the staggering economic potential of this project," said Mosquito President Brian McClay. "Our well-researched belief is that CUMO can be designed in an environmentally-friendly manner while providing thousands of high paying jobs and taxes to one of the poorest counties in Idaho. CUMO contains one of the world's largest, strategic stores of mineral wealth. Based on this report, we will continue to significantly further develop the project and maximize value for our shareholders."
Adding to Mr. McClay's comments, Mosquito's Exploration Manager Shaun Dykes said, "This evaluation outlines the mineral resource/reserve targets required to bring CUMO into production. Geologically, the mineralization has been identified and our drill programs have been designed to convert the current inferred resource, and expand the measured and indicated resource in order to achieve these targets. The extremely short payback periods outlined in the PEA is one of the most significant aspects. The path to production continues, with the updated resource calculation for CUMO being completed at the end of the 2009 drill season."
The following two tables show highlight figures from Ausenco's CUMO-PEA, for 150,000 and 100,000 short tons of ore per day for a mine life of 40 years. All prices and values are in US$. Based on a pre-tax financial model and long-term base-metal prices of $16/lb molybdenum oxide, $2.10/lb copper, $12.00/ounce silver, $6.00/gram rhenium and $135/ton sulphuric acid, the results are as follows:
150,000 short tons per day
Net Present Value ((NPV 5%) $16 Billion dollars
Internal Rate of Return 36 %
Cost/lb: Molybdenum oxide/ Copper$3.9 / $0.5
Startup Capital Cost$2,800 Million dollars
Payback Period (see Notes)2.3 years
100,000 short tons per day
Net Present Value (NPV 5%) $10 Billion dollars
Internal Rate of Return 29 %
Cost/lb: Molybdenum oxide/ Copper$4.3 / $0.6
Startup Capital Cost$2,200 Million dollars
Payback Period (see Notes)3.0 years
Cost/lb: Molybdenum oxide/ Copper is the total operating cost per pound, assuming all by-products are credited against the costs of production of the reference metal.
Three other price scenarios were undertaken to analyze the project's sensitivity to metal prices. These consisted of high-, low- and ten-year cyclical prices.
High Price
High metal prices are $28/lb molybdenum oxide, $3.50/lb copper, $15.00/ounce silver, $10.00/gram rhenium and $235/ton sulphuric acid.
Pre-tax, 5% discount rate 100,000 short tpd 150,000 short tpd UnitsNet Present Value (NPV) $22 $35 Billions US$Internal Rate of Return 51% 61% %Payback Period 1.6 1.2 Years
Cyclical Price
Cyclical metal prices consist of a range of prices between the low and the high in a ten-year cycle starting on a rising price trend and passing through the low every ten years. Prices are $7.50/lb to $28/lb molybdenum oxide, $1.50/lb to $3.50/lb copper, $9.00/ounce to $15.00/ounce silver, $2.50/gram to $10.00/gram rhenium and $85/ton to $235/ton sulphuric acid.
Pre-tax, 5% discount rate 100,000 short tpd 150,000 short tpd UnitsNet Present Value (NPV) $12 $21 Billions US$Internal Rate of Return 39% 49% %Payback Period 1.9 1.5 years
Low Price
Low metal prices are $7.50/lb molybdenum oxide, $1.50/lb copper, $9.00/ounce silver, $2.50/gram rhenium and $85/ton sulphuric acid.
Pre-tax, 5% discount rate 100,000 short tpd 150,000 short tpd UnitsNet Present Value (NPV) $1.1 $2.9 Billions US$Internal Rate of Return 9% 12% %Payback Period 9.6 6.4 years
The results for all production rates can be found in the tables on page 9 of this release.
Studies and reviews for the PEA were conducted by Ausenco and Vector Engineering Inc. (Vector), a member of the Ausenco group of companies. Based in Grass Valley, USA, Vector specializes in environmental and consulting services. Vector undertook a review of mine design, developed mine, waste stockpile and tailings storage facility (TSF) capital and operating-cost estimates to an accuracy of ±35%. Ausenco conducted the metallurgical test-work review, process-plant design, process-plant capital and operating-cost estimates to ±35% accuracy as well as the economic analysis.
Capital Costs
Ausenco and Vector examined various potential milling complex-, waste dump- and tailings sites in the area around CUMO and concluded that several options exist for mine-, waste dump- and tailings sites that are suitable for the overall project. Ausenco and Vector proceeded to estimate the capital cost requirement based on utilizing these sites. The analysis also includes the project's own roasting and acid-making complex to be located at a different site from the mine and milling complex. Capital cost estimates are considered to have an accuracy of +/- 35% in this PEA, not including provisions for costs to complete the feasibility study and are as follows:
Capital (millions US $) 50,000 short tpd 100,000 short tpdDescription Starting Sustaining Total Starting Sustaining TotalMine Pre-Development (with Pre-strip) $750 $0 $750 $700 $0 $700Mine Equipment & Infrastructure $100 $300 $400 $200 $720 $920Tailings $40 $200 $240 $80 $470 $550Mill (fixed plant) $590 $250 $830 $1,020 $430 $1,450Roaster $120 $50 $170 $200 $80 $280Overall Total $1,600 $800 $2,400 $2,200 $1,700 $3,900 150,000 short tpd 200,000 short tpdDescription Starting Sustaining Total Starting Sustaining TotalMine Pre-Development (with Pre-strip) $640 $0.0 $640 $660 $0.0 $660Mine Equipment & Infrastructure $270 $1030 $1,300 $270 $960 $1,230Tailings $80 $720 $800 $160 $690 $850Mill (fixed plant) $1,540 $620 $2,160 $1960 $800 $2,760Roaster $270 $130 $400 $350 $150 $500Overall Total $2,800 $2,500 $5,300 $3,400 $2,600 $6,000
Mining capital costs for CUMO were estimated using information from InfoMine, USA's CostMine handbook, the Mining Cost Service. Using total tons moved on a daily basis for each CUMO production alternative, a factor analysis from CostMine was used to develop estimates for mining equipment requirements and capital costs for equipment, haul roads and site work, and buildings. The models in CostMine were constructed using Sherpa, the mine cost estimating software published by Aventurine Engineering.
The CUMO process plant capital cost estimates were derived from the mechanical equipment costs. Costs were based on recent equipment quotations or from previous projects. The cost estimates for all other disciplines were determined from the mechanical equipment list using factors developed from the Ausenco data base of projects.
Operating Costs
CUMO mining costs have been estimated based on a factored analysis of the costs estimated for similar large open pit operations. Using the four production rates, Ausenco produced possible operating costs for the various aspects of the project. Wherever possible, numbers from existing producing mines were used, such as Thompson Creek, Morenci, and Highland Valley. Operating cost estimates are considered to have an accuracy of +/- 35% in this PEA.
The processing plant operating cost estimate was developed based on fixed and variable components relating to ore throughput and ore characteristics. Metallurgical requirements were estimated from the SGS test work and combined with market prices for consumables and benchmarked operating data for fixed operating costs from similar sized facilities. The results are summarized below:
Operating Cost (million US $ per year)Description 50,000 short tpd 100,000 short tpd 150,000 short tpd 200,000 short tpdMining Cost of ore $13 $18 $21 $27Mining Cost of stockpile material $29 $27 $26 $22Mining Cost of waste $39 $40 $35 $32Total Mining Cost $81 $85 $82 $81Plant $91 $169 $251 $331General & Administration $5 $7 $8 $9Closure and Reclamation Cost Allowance $1 $2 $3 $4Subtotal -Mine site Costs $178 $263 $344 $425Roaster $17 $32 $48 $60Realization costs per ton milled $8 $13 $19 $26TOTAL UNIT OPERATING COST $203 $308 $411 $510TOTAL UNIT OPERATING COST ($/short ton ore milled)see Note $11.2 $8.6 $7.6 $7.1TOTAL UNIT OPERATING COST ($/short ton ore milled without stockpile mining cost) see Note $9.6 $7.8 $7.1 $6.8
Note: For the purposes of this PEA, a fixed mine and plant life of 40 years has been selected to conduct the economic comparison despite the fact that the mine is not exhausted under any of the current proposed mining rates. This results in the cost per ton of ore being higher than other comparable operations. The costs attributed to the mining of the stockpile are recovered beyond the 40 year studied life. Removing the cost of mining the stockpile from the overall operating costs gives a better indication of the true long term unit operating costs (excluding additional stockpile re-handle and tailings costs), rather than having the ore carry the entire cost.
Ore will be crushed and sent by conveyor to the mill complex, stockpile will be stored in the vicinity of the pits and waste will be placed in waste dumps and used in the construction of tailings storage facilities. Other assumptions include a near pit crushing location, 15 miles per hour average truck speed, 10% ramps (Morenci), sufficient water available at the mine site and electrical power being available from the nearby grid at same costs as the nearby Thompson Creek mine.
The analysis also includes operating costs for the project's own roasting and acid making complex to be located up to 200 km from the mine and milling complex. Operating costs for the smelter includes molybdenum roaster costs and smelting and refining charges associated with delivering a copper concentrate to a third-party smelter.
Mineral Resource
The recently announced (May 4, 2009) updated resource calculation produced by Gary Giroux of Giroux Consultants, an independent, internationally recognized mineral industry consultant, was used in the PEA to produce a production schedule for each of the four production rates. The base resource consisted of the following:
Indicated
Cutoff Grade > Cutoff Contained Metal Recov. Recov. LbsGRV millions MoS2 Cu Ag W Million Million Million Million Million Cu MoO3$US (short tons) (%) (%) (g/t) (ppm) lbs. Mo lbs MoO3 lbs Cu oz Ag lbs W Equiv Equiv<7.50 206.2 0.017 0.08 2.29 33.62 43.1 64.6 314.0 13.8 13.9 0.18 0.367.5-20 581.6 0.045 0.09 2.58 43.45 314.4 471.6 1052.0 43.8 50.5 0.48 0.95>20 659.1 0.110 0.06 1.95 47.88 869.0 1303.6 845.0 37.5 63.1 1.02 2.03
Inferred
Cutoff Grade > Cutoff Contained Metal Recov. Recov. LbsGRV millions MoS2 Cu Ag W Million Million Million Million Million Cu MoO3$US (short tons) (%) (%) (g/t) (ppm) lbs. Mo lbs MoO3 lbs Cu oz Ag lbs W Equiv Equiv<7.50 843.1 0.013 0.07 2.19 34.32 133.2 199.8 1256.0 53.7 57.9 0.18 0.367.5-20 844.6 0.042 0.08 2.29 34.40 429.8 644.8 1411.0 56.3 58.1 0.44 0.89>20 828.6 0.097 0.06 2.00 36.05 964.2 1446.3 1000.0 48.4 59.7 0.89 1.79
Four different-sized pits (each progressively larger) were constructed using the indicated and inferred blocks contained within the resource. The pit slope used varied, starting at 45 degrees for 1,000 feet, 40 degrees for the next 1000 feet and 35 degrees for below. The highest wall is 2800 feet with an average slope of 38 degrees, similar to the high wall at Bingham Canyon mine. Pit design parameters at this stage are conceptual only and are not based on any collected geotechnical data.
For the purposes of the PEA, material above $20 recovered metal value ($RV) is considered ore, material between $7.50 and $20 is considered stockpile and material less than $7.50 is considered waste. A forty year mine life was used for each of the four different-sized pits. In all cases, pit designs by Mosquito Consolidated Gold Mines demonstrate that each pit contains sufficient ore and stockpile material to extend the mine life beyond forty years.
Using updated metal recoveries to reflect the mill circuit designed by Ausenco, a production table with recovered grades was generated for each treatment rate. These were then used in the economic analyses.
Mosquito is continuing drilling to both expand the existing resource and to convert the inferred to indicated, in an attempt to delineate the required resource and subsequent reserves to meet the established targets. Following completion of the ten hole 2009 exploration program, an updated mineral resource will be calculated. A final exploration program will then be outlined that would provide sufficient drilling to establish the measured and indicated resource required to support the 100,000 to 150,000 short tons per day ore production rates.
Metallurgical Recoveries
Metallurgical recoveries used for the Giroux Resource, (2009) (see table in Notes) were adjusted to reflect the recoveries within the mill circuit designed by Ausenco. These adjustments take into account additional unit processes required in the processing plant, which had not been included in the SGS test work study to produce salable products. The additional unit processes required include flotation recovery from bulk concentrate, ferric chloride leaching and roasting.
The assumed recoveries used in the economic analysis are as follows:
Zone Cu% MoS2% Ag %CuAg 64% 83% 70%CuMo 85% 92% 78%Mo 72% 95% 55%
In addition, 90% recovery of rhenium in molybdenum concentrate and the production rate of one ton of sulphuric acid per one ton of concentrate were assumed at the roaster and acid plant.
Potential Opportunities
The PEA has identified several areas and opportunities that may provide significant costs savings and improved economics for the project, including the following:
Mining
-Optimization of waste and stockpile haulage methodology to reduce the amount of trucking involved.
-Optimization of the in-pit haulage through the utilization of trolley assisted programs, and/or in-pit crushing
-Detailed equipment costing to determine potential discounts to list price for all major components.
Milling
-.More metallurgical work to determine optimum grind size (the current assessment is based on the finest grind tested to date) and analyze recoveries of the various metals.
-.Optimize reagents to reduce costs and improve metallurgy.
Tailings
Other
Hydroelectric power can be developed, using non-fish bearing creeks that are in the area.
These and other areas will be examined in more detail as part of the next engineering phase.
Based on the excellent results of the Preliminary Economic Assessment of CUMO, Mosquito plans to complete the 2009 drilling and update the current mineral resource. At the same time, work will continue on the environmental baseline, engineering, and metallurgical work required to bring the project to feasibility.
A Preliminary Assessment Summary Technical Report is being finalized to comply with Canada's National Instrument 43-101 Standards of Disclosure for Mineral Projects and will be filed on SEDAR within 45 days.
Mr. Shaun M. Dykes, M.Sc. (Eng), P.Geo., Exploration Manager and Director of Mosquito is the designated qualified person for the CUMO Project, and prepared the technical information contained in this news release.
On Behalf of the BoardMOSQUITO CONSOLIDATED GOLD MINES LTD.Brian McClayPresident
About Mosquito Consolidated Gold Mines
Headquartered in Vancouver, Canada, Mosquito Consolidated Gold Mines Limited (www.mosquitogold.com) is a mining exploration and development company with a diverse portfolio of high-potential precious and base metals projects, located in low-political-risk environments in North America and Australia. The Company's primary focus is the development of its Idaho-based CUMO deposit, recognized as one of the largest molybdenum-copper-silver porphyry deposits in the world, and its Nevada-based Pine Tree porphyry copper-molybdenum-silver project.
THIS NEWS RELEASE WAS PREPARED BY MANAGEMENT WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENTS. 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.
This news release includes certain statements that express management's expectation or estimates of future performance and may be deemed "forward-looking statements". These forward-looking statements include plans, estimates, forecasts and statements as to management's expectations regarding the CUMO Project. These forward-looking statements involve assumptions, risks and uncertainties and actual results may vary materially. For these reasons shareholders should not place undue reliance on such forward-looking information.
United States residents are cautioned that some of the information that may be published by Mosquito may not be consistent with United States Securities and Exchange Commission disclosure rules and may be materially different from what the Company is permitted to disclose in the United States and therefore United States residents should not rely on such information.
Table 1a Preliminary Assessment Financial results for the Base Case Metal Prices.
Note: Cost/lb: molybdenum oxide/Copper, capital and operating costs for each throughput option are the same for all metal price cases.
Pre-tax, 5% discount rate 50,000 short tpd 100,000 short tpd 150,000 short tpd 200,000 short tpdNet Present Value (millions US $) $3,900 $9,800 $15,700 $20,900Internal Rate of Return (%) 19% 29% 36% 40%Cost/Lb: Molybdenum oxide/Copper (US$/lb) $5.5/ $0.7 $4.3 /$0.6 $3.9/$0.5 $3.8/ 0.5Starting Capital (millions US $) $1,600 $2,200 $2,800 $3,400Sustaining Capital (millions US $) $800 $1,700 $2,500 $2,600Payback Period (years) 4.9 3.0 2.3 2.0
Table 1b Preliminary Assessment Financial results for the High Price case
Pre-tax, 5% discount rate 50,000 short tpd 100,000 short tpd 150,000 short tpd 200,000 short tpdNet Present Value (millions US $) $10,000 $22,000 $35,000 $45,000Internal Rate of Return (%) 36% 51% 61% 66%Payback Period 2.4 1.6 1.2 1.1
Table 1c Preliminary Assessment Financial results for the Cyclical Price case
Pre-tax, 5% discount rate 50,000 short tpd 100,000 short tpd 150,000 short tpd 200,000 short tpdNet Present Value (millions US $) $5,400 $12,000 $20,000 $27,000Internal Rate of Return (%) 26% 39% 49% 55%Payback Period 2.8 1.9 1.5 1.3
Table 1d Preliminary Assessment Financial results for the Low Price case
Pre-tax, 5% discount rate 50,000 short tpd 100,000 short tpd 150,000 short tpd 200,000 short tpdNet Present Value (millions US $) -$500 $1,100 $2,900 $4,400Internal Rate of Return (%) 3% 9% 12% 15%Payback Period 25.1 9.6 6.4 5.6
Notes:
Net Present Value (NPV) is defined as the total present value of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects. In the calculation each yearly cash flow is discounted back to its present value using a discount rate.
Internal Rate of Return (IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return. For example, the interest the bank pays is the rate of return on an investment. Minimum rate of return for most mines in North America is around 12 to 15%; i.e. earning 12 to 15% on every dollar invested.
Payback Period is the period of time required for the return on an investment to "repay" the sum of the original investment. In the PEA, the straight-line method is presented which does not take into account the time value of money.
Mineral Resources that are not mineral reserves do not have demonstrated economic viability. Mineral resources can include mineral reserves.
An Indicated Mineral Resource is that part of a mineral resource for which quantity and grade can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.
An Inferred Mineral Resource is that part of a mineral resource for which quantity and grade can be estimated, on the basis of geological evidence and limited sampling and reasonably assumed geological and grade continuity.
$RV cutoff used for the resource estimate is a recovered value calculated using metal recoveries shown below.
Copper equivalent (Cu. Equiv.) and Molybdenite equivalent (MoS2 Equiv.) are based on the following metal prices(all in US$): Copper $1.50/lb, Molybdenum Oxide ($15/lb), Silver $0.35/gram and Tungsten $0.22/gram.($7.00 per lb)
Other factors include 1% = 20 pounds; 1 ppm = 1 gm/T; 1000 ppb =1 ppm = 1 gm/T.
Metallurgical recoveries used in the resource calculation are as follows for each metal zones. Recoveries are slightly lower that those currently reported by SGS in their recent metallurgical study.
Zone Cu% MoS2% Ag % W %Oxide 60% 80% 70% 35%CuAg 68% 85% 73% 35%CuMo 87% 92% 78% 35%Mo 80% 95% 55% 35%
Formulas (resource calculation) :
Recv for a metal is taken from the above table for each assay/block in a particular zone and is value percentage/100
$RV= ((Cu*20*$* recv)+((MoS2*20*(1.5/1.6681)*$(MoO3)* recv)+(Ag*$* recv)+(W*$* recv))
Recovered Cu. Equiv. = $RV / ($(Copper) *20)
Recovered MoS2. Equiv. = $RV / ((1.6681/1.5)* $(MoO3)*20)
Copyright (c) 2009 Thenewswire.ca - All rights reserved.
Mosquito appoints Mr. Hongxue Fu of Beijing, China to Chairman of the Board
5:31 PM ET, October 1, 2009
VANCOUVER, Oct 01, 2009 /PRNewswire-FirstCall via COMTEX/ -- Mosquito Consolidated Gold Mines Limited (Mosquito - TSX Venture: MSQ) is pleased to announce the appointment of Mr. Hongxue Fu to Chairman of the Board.
Mr. Fu is an accomplished mining entrepreneur with worldwide experience in mining and business development. Currently he is President of International Energy and Mineral Resources Investment Company Limited (Hong Kong) ("IEMR"). IEMR is involved in international exploration and developments in energy and mining resources.
Mr. Fu is the control person of International Energy and Mineral Resources Investment (Hong Kong) Company Limited and Ivy Mining Inc which collectively own 11,173,333 shares and 2,083,333 warrants in Mosquito Consolidated Gold Mines Limited..
Mr Fu has extensive contacts in the mining industry both in China and throughout the world. As Chairman of the Board, Mr. Fu will provide Mosquito with valuable access to these contacts, as he devotes his time initially to the business development of the corporation with a particular focus on the Company's CUMO molybdenum-copper-silver deposit.
The CUMO mineral deposit currently contains a NI 43-101 compliant, 1.3 Billion tons indicated and 2.25 Billion tons inferred of open-pit accessible multi-element mineralization. This includes in the indicated category: 1.8 Billion pounds of molybdenum oxide ("moly"); 2.1 Billion pounds of copper; 90.8 Million ounces of silver; and 123.5 Million pounds of tungsten. In the inferred category it includes: 2.3 Billion pounds of moly; 3.3 Billion pounds of copper; 143.8 Million ounces of silver; and 158.9 Million pounds of tungsten. It is currently is the world's largest un-mined open pit accessible molybdenum deposit.
The Company also wishes to announce that further to its press release issued on June 1, 2009, the 43-101-compliant independent Preliminary Economic Assessment being conducted by Ausenco, an internationally recognized engineering firm headquartered in Brisbane, Australia, is in the final draft stages and is expected to be completed shortly.
Mr. Shaun M. Dykes, M.Sc. (Eng), P.Geo., Exploration Manager and Director of Mosquito is the designated qualified person for the CUMO Project, and prepared the technical information contained in this news release.
On Behalf of the Board MOSQUITO CONSOLIDATED GOLD MINES LTD. Brian McClay President About Mosquito Consolidated Gold Mines
Founded in 1971 and headquartered in Vancouver, Canada, Mosquito Consolidated Gold Mines Limited (www.mosquitogold.com) is a mining exploration and development company with a diverse portfolio of high-potential precious and base metals projects, located in low-political-risk environments in North America and Australia. The Company's primary focus is the development of its Idaho-based CUMO deposit, recognized as one of the largest molybdenum-copper porphyry deposits in the world, and its Nevada-based Pine Tree porphyry copper-molybdenum-silver project.
THIS NEWS RELEASE WAS PREPARED BY MANAGEMENT WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENTS. THE TSX-VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release includes certain statements that express management's expectation or estimates of future performance and may be deemed "forward-looking statements". These forward-looking statements include plans, estimates, forecasts and statements as to management's expectations regarding the CUMO Project. These forward-looking statements involve assumptions, risks and uncertainties and actual results may vary materially. For these reasons shareholders should not place undue reliance on such forward-looking information.
United States residents are cautioned that some of the information that may be published by Mosquito may not be consistent with United States Securities and Exchange Commission disclosure rules and may be materially different from what the Company is permitted to disclose in the United States and therefore United States residents should not rely on such information.
CONTACT: MOSQUITO CONSOLIDATED GOLD MINES LIMITED, Tel: (604) 689-7902, www.mosquitogold.com, Fax: (604) 689-7816
SOURCE Mosquito Consolidated Gold Mines Ltd
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Vol. 73 - BUILDING A GIANT II: MOSQUITO GOLD
June 22, 2008
Sector: Mining
Share Price: $1.40
TAKEN FROM: http://www.pinnacledigest.com/articles/vol.-73-building-giant-ii:-mosquito-gold
Dear Member,
Last Sunday our team updated our longtime featured company Mosquito Consolidated Gold Mines (MSQ: TSX-V). Since that update they have announced another major development.
On June 17th Mosquito reported that it has received an excellent preliminary metallurgy report on its Idaho-based CUMO molybdenum project. This report outlines what percentage of material can be recovered and leads up to the cost and viability of production.
Many investors are taken aback by the astronomical size of the CUMO Project which has a 43-101 compliant resource of 2.89 billion pounds of molybdenum oxide (MoO3), 3.41 billion lbs of Copper (Cu), 149.8 million ounces of silver (Ag) and 185.3 million lbs of tungsten (W). We don't blame them, but what many don't understand is how profitable and efficient mining molybdenum can be, and more specifically, mining molybdenum at the CUMO Property.
The metallurgy report was conducted by SGS Vancouver Metallurgy (SGS) and was entitled "The recovery of molybdenum, copper and silver from the CUMO Samples". This is a crucial step towards accomplishing a bankable feasibility study and ultimately moving the project to production.
Let's take a look at the first portion of the news release followed by our interpretation.
In December 2007, 114 drill core samples from CUMO drill holes 27, 28 and 29, totaling 745.5 kilograms and sorted into the three mineralized zones, Cu-Ag, Cu-Mo and Mo, were delivered to SGS for analysis. To date, rougher and cleaner flotation, QEMSCAN mineralogical, and bench scale grinding studies have been completed on the three zones.
Overall, the results of the studies completed show better-than-expected recoveries in all parts of the deposit and confirm that even at the low-grade end the recoveries are excellent. Two different grinds were used, with the finer grind giving better recoveries, especially in the case of copper. The material is straightforward, with relatively low concentrations of problematic minerals such as pyrite, clays and talc, lending itself to effective Cu/Mo separation to create two saleable concentrates. Reagent consumption appears to be slightly below average, due to the lack of problematic minerals, indicating that processing will be low-cost and relatively straightforward.
To date, Mosquito's own internal economic analyses of the deposit have used the following recovery rates: 90% Mo, 60% Cu, and 50% Ag. The metallurgical study results indicate that much higher recoveries can be achieved for all three metals, even at the lowest grades. For example, in the cleaner flotation study, recoveries for molybdenum were 97.5% in the Cu-Ag zone, 93.7% in the Cu-Mo zone, and 94.9% in the Mo zone.
Let's recap the past 9 months and what has taken Mosquito to their current position:
On October 16th Mosquito Intersects Excellent Mineralization at Cumo
Hole 29 Returned +2,000 Feet Grading Greater Than 0.1% Molybdenite
Hole 29 intersected Molybdenum bearing mineralization from 57.2m (190 feet) to 686.9m (2281.7 feet). Assay results returned included Hole 29-07 614.1 meters (2040.0 feet) grading 0.103% MoS2.
Our research team has never come across a hole so deep and high in molybdenum mineralization within North America. The 2040 ft hole is open at depth.
On March 10th Mosquito Completes NI 43-101 Resource on CUMO Deposit of 2.89 Billion Pounds of Molybdenum Oxide, 3.41 Billion Pounds of Copper and 149.8 Million Ounces of Silver
We have yet to find another junior with a resource of this size. With only 20% of the CUMO Property drilled we can't help but wonder what the above number will look like after this summer's drill program.
On April 16th Mosquito Files CUMO NI 43-101, Announces 1.1 Billion Tons of Higher-Grade Multi-Element Mineralization
We have yet to find a junior with a high grade core of this size.
On June 9th Mosquito Commences 2008 Drilling Program With CUMO Project
We have yet to find another junior mining company currently drilling with 5 solely owned drills on one property.
On June 17th Mosquito Receives Excellent Preliminary Metallurgy Report on CUMO
We have yet to find another junior with a 90% recovery rate on over 1 billion pounds of high grade defined molybdenum at their flagship property.
Continuation of June 17th Press Release:
At the CUMO Property samples were selected in continuous intervals to represent the volume and grade distribution within the overall deposit. It should be noted that SGS maintains an extensive database of mines from around the world for comparison purposes on certain aspects of the tests.
Over the next few weeks the remaining tests will be completed and include the following:
Lock cycle testing to improve recoveries from the flotation cycle
10 kg cleaner flotation testing in bulk form to obtain recoveries by treating the zones as a single sample
Obtaining the potential recoveries of Tungsten(W) and Gallium(Ga) from the tailings of the flotation process
Obtaining a complete analysis of the concentrates including Rhenium and Osmium
Determining the chemical make-up of the final tailings from the circuit
Outlining a potential mill flow sheet for the deposit
Once completed, a final report will be submitted and filed on Sedar. This is expected within
TAKEN FROM: http://www.pinnacledigest.com/articles/vol.-73-building-giant-ii:-mosquito-gold
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