Viceroy Exploration hires personnel for Gualcamayo
2006-02-23 10:29 ET - News Release
Mr. Patrick Downey reports
UPDATE ON COMPANY ACTIVITIES
Viceroy Exploration Ltd. has released the following update on the continuing activities within the company as it moves toward a production decision at its wholly owned Gualcamayo gold project. Specific highlights include:
appointment of senior operations management in Argentina and Vancouver;
appointment of the engineering consultants for the feasibility study;
progress on a new resource update and updated preliminary economic assessment;
continuing regional exploration at Gualcamayo;
commencement of a grade reconciliation program at Gualcamayo, supervised by AMEC Americas Ltd.; and
commencement of a first-stage exploration program at the company's wholly owned Evelina property, located 15 kilometres from Barrick Gold Corp.'s Veladero property in the High Andes.
With the closing of the recently disclosed $60-million financing, the company is positioned to rapidly advance its plans to achieve its production target schedule for the end of 2007.
Appointments of senior personnel
The company has made the following senior personnel appointments. These individuals will play a critical role in the company's development.
Mario Hernandez, vice-president, corporate communications and development, Minas Argentinas SA (MASA)
MASA is the company's wholly owned Argentinean subsidiary which holds all of the company's assets in Argentina. Mr. Hernandez has been with MASA for over 15 years and has been instrumental in its growth and development. He graduated from the University of San Juan in geology and is from Jachal, the nearest local provincial town to the Gualcamayo project. He is well known in the community, and will be responsible for community and government relations as the project proceeds through permitting as well as development.
Jorge Palmes, operations manager, MASA
Mr. Palmes has recently joined Viceroy from Barrick's Veladero project, where he was responsible for process operations. He worked on the Veladero project during engineering through construction of the heap-leach facility, and successfully managed the plant commissioning and start-up. Prior to this, Mr. Palmes was part of the design team on the feasibility study for the Pascua-Lama project.
Prior to joining Barrick, Mr. Palmes worked as the concentrator superintendent at the Baja de Alumbrera copper-gold project in Catamarca province in Argentina. Before that, he was the process engineer/metallurgist for American Resource Corp. at its Goldfield heap-leach operation in Nevada.
Mr. Palmes has a degree in mineral processing from the University of San Juan and a master's degree in engineering from the University of British Columbia.
Mr. Palmes brings strong management, process and operations skills to MASA. His recent heap-leach construction, permitting and operations experience at the Veladero heap-leach project in San Juan province will be of great assistance to MASA as it proceeds to the goal of production.
Jim Healy, civil and mining superintendent, MASA
Mr. Healy recently joined Viceroy from Canico, where he was responsible for the mining and civil works of the Mineracoa Onca Puma nickel-latterite project in Brazil. Prior to that, Mr. Healy was the mining superintendent at Inco's Goro project in New Caledonia. Previously, Mr. Healy worked for 16 years in various roles for BHP Minerals, including as construction superintendent at the Ekati diamond mine in Northern Canada, chief mining engineer at the Syama gold mine in Mali and operations manager at the Senakin coal mine in Indonesia. Mr. Healy has extensive international experience in mine construction, commissioning, and also training of locals in equipment operations and maintenance.
Dale Tweed, engineering manager, Viceroy
Mr. Tweed recently joined Viceroy as engineering manager, where he will be responsible for all technical aspects of the feasibility study, detailed engineering and construction management. Most recently, Mr. Tweed worked as a project manager for AMEC, an international engineering and construction firm. Prior to that, he worked for Diavik Diamond Mines Inc., where he managed the contractors on the $850-million diamond mine. Mr. Tweed has also worked on the design and construction of several international mining projects, in South America, including BHP Billiton's Escondida copper project, Southern Peru Copper's Cuajone project and the Phelps Dodge Cerro Verde project.
New resource, updated preliminary economic assessment and feasibility study
A new resource calculation is currently under way. This is being completed by Ron Simpson, PGeo, an independent consultant under the terms of National Instrument 43-101. The new resource update will include the 2005 infill drilling at Quebrada del Diablo (QDD) and also the drilling on the QDD western extension. The basis of the 2005 program was to provide sufficient drill density for mine planning for the upcoming feasibility study and to test the western extension of the main orebody, a significant portion of which remains untested and will continue to be drilled through 2006. The new resource estimate will also include the Amelia Ines and Magdalena resources, which also remain open to the west toward target 3-D.
The new resource will form the basis of an updated preliminary economic assessment, which will be completed by Wardrop Engineering Ltd. of Vancouver.
Wardrop has also been appointed as the lead engineering firm for the upcoming feasibility study, which includes the following consulting groups:
Golder Associates Ltd. for geotechnical and pad design;
Knight Piesold Argentina Consultores SA for environmental baseline studies and environmental impact statement (EIS) report; and
Resource Development Inc. (RDi) for metallurgical testwork.
Golder is currently supervising the geotechnical drilling program for the pit slope and ore pass designs. It is also supervising the geotechnical drilling for the pad design. It should be noted that the company has located several thousand tonnes of fine-lacustrine clays on the property, located approximately 500 metres from the proposed leach pad sites. Golder completed a series of tests on these clays and reported to the company that it is suitable as a pad underliner material. This will save the company significant costs to purchase and transport such material for this purpose.
Baseline studies are progressing well under the management of Knight Piesold. Viceroy recently completed a pump test including drawdown and recharge of an aquifer located on the property. The results show that this aquifer will provide more than sufficient water for the process and plant needs.
RDi has commenced a series of 10 column-leaching tests at the University of San Juan in Argentina. Additional column leaching, bottle-roll leaching and other metallurgical studies are also under way at the RDi facilities in Wheat Ridge, Colo. This work will provide metallurgical data that will be employed in the process plant design, and provide additional data required for final heap detoxification and closure plans.
Continuing regional exploration
Over the past number of months, the company has been conducting a surface mapping and sampling program on its extensive land package at Gualcamayo. Results to date have indicated several prospective areas of mineralization. The company also recently completed a regional aeromagnetic survey. This survey indicated a large five-kilometre-wide and 25-kilometre-long structural corridor with similar age intrusives to the main QDD intrusive.
The company is in the process of constructing access roads to two of the most attractive targets, with drilling expected to commence in late March to early April of 2006.
Grade reconciliation program
The gold system at the main QDD deposit is located in a series of limestone and marble breccias. The gold has a fine-grained quality (one to five microns) and over 95 per cent of gold mineralization is within the matrix of the breccia. The company has observed up to 20-per-cent differences in the grade of the mineralization between diamond and reverse-circulation assay results. The company believes that grade differences between hole types may be due to the gold-hosting breccia matrix being washed away during diamond drilling.
After a preliminary review of project data, AMEC concluded that examination of potential fines loss was warranted and has recommended a series of five true twin reverse-circulation and diamond holes across the deposit. True twinning will reduce spatial variance and allow better comparison of gold grade differences between reverse-circulation and diamond drilling. The twinning program will require drilling and sampling diamond drill holes, filling the holes with foam, then reaming and sampling the hole with a reverse-circulation drill. AMEC will supervise all work, will review true twinning results and will comment on any potential fines losses. AMEC will also advise if any further work is warranted.
Evelina exploration
The Evelina project is located about 15 kilometres to the northwest of Barrick's Veladero property in the High Andes. Some previous work was done on the project under a joint venture with Barrick in 1999 to 2000.
The company reviewed the results and determined that the property merited further work. The project is a high-sulphidization system similar to Veladero. A limited campaign of surface sampling and mapping was completed in early February and, once results are obtained and analyzed, the company will decide on the next level of work for this season.
Summary
In summary, Patrick Downey, president and chief executive officer of Viceroy Exploration, stated: "We have progressed significantly since we commenced work on the Gualcamayo project in late 2003. I am looking forward to the new resource and preliminary economic assessment, which will set out the development plan for Gualcamayo.
"The feasibility is well in hand and the permitting is progressing as planned. We have strong local support for the project. The Governor of San Juan, the subsecretary of mines and the mayor of Jachal recently visited the project, and expressed their strong support for the development of the project.
"I am also very pleased to welcome our new senior team members. The fact that we can attract such highly qualified persons to the project speaks volumes as to the quality of this asset.
"Our recent financing leaves us with sufficient available cash to rapidly pursue our development and exploration programs over the next 18 months."
Quality control
Exploration on the Gualcamayo project is being conducted under the supervision of Rick Diment, PGeo, the company's qualified person as defined under National Instrument 43-101. All samples are collected in accordance with industry standards. Samples are submitted to Alex Stewart Assayers Argentina SA, in Mendoza, Argentina, for fire assay and ICP analysis. Check assays are submitted to ALS Chemex, an ISO-9001:2000-certified lab, in its Santiago, Chile, facility. Accuracy of results is tested through the systematic inclusion of standards, blanks and check assays.
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