Zinc

[Lone Clone]

Minco PLC completes pre-feasibility study on Bilbao zinc-lead-copper-silver project

Source: Edited Press Release

http://metalsplace.com/metalsnews/?a=10771

Minco said Thursday that it has completed an independent pre-feasibility study on the development of zinc, lead, copper and silver sulphide resources at its Bilbao Project in the state of Zacatecas in Mexico.

Roger Turner, Executive Chairman and CEO, said: "Our exploration team has brought the Bilbao project to a pre-feasibility study only 12 months after we acquired our interest in the property and drilling which commenced in April. In Bilbao, Minco has a project which can be brought rapidly to production using established mining and processing techniques. The project is clearly robust at conservative commodity prices and our priority now is to bring it in to production as soon as possible."

The company said the pre-feasibility study was completed under the direction of an independent consulting engineer, Mr Al Summers, a former Vice-President of Operations for Hecla Mining Inc with extensive mining experience in Mexico.

The study addresses only the sulphide part of the resource which, as the following table, extracted from the full report shows, represents only around 40% of the combined oxide and sulphide resource of approximately 5.8million tonnes. The resources have been prepared by independent consultants. The "mixed and sulphide" resource has been generated, by Mining Exploration and Geosystem Associates (MEGA), using "Datamine" software and manually cross-checked by a further independent expert.

Metallurgical and mineralogical test-work is continuing in order to firm up the characteristics of the sulphide mineralisation and to establish the optimum flowsheet for treatment of the oxide resources, which would be amenable to open-pit mining.

The study uses current international smelter contract terms and assumes that concentrates are shipped by road to local smelters in Mexico. The Bilbao site is strategically located approximately 50 km east of the city of Zacatecas and some 5 km from the main highway between San Luis Potosi and has ready access to the electricity supply grid.

The company said the project is economically robust and in the "Optimistic Case" economic analysis, base metal prices are below the current market prices for lead and zinc. If these prices were realized during the life of the mine the project payback period would be 1.3 years and the net present value would be US$84.7 million. Analysis shows that the project is most sensitive to revenue with a 20% change generating a 60% change in the NPV discounted at 10%. Changes of 20% in either capital or operating costs result in changes in NPV of approximately 20%.

The report recommends a further 10-12 month programme of drilling to upgrade and increase the oxide and sulphide resources and an 18 month period of construction during which time a 1.5 km long access ramp will be excavated to provide underground access to the sulphide ore zones.