April 03, 2008 Coro Announces Highlights From San Jorge Leach Only Copper Project Ni 43-101 Technical Report - NR 08-08
April 3, 2008, Coro Mining Corporation ("Coro", or the "Company") (TSX symbol: COP) is pleased to announce the highlights from the San Jorge Leach Only Copper Project ("the Leach Only Project" or "the Project") National Instrument 43-101 Technical Report (the "Ausenco Technical Report") being finalized by Ausenco Canada Inc. ("Ausenco"). The Project is located in the Province of Mendoza, Argentina.
The Ausenco Technical Report is based on the outcomes of an engineering study completed by Ausenco to pre-feasibility study standards. The Ausenco Technical Report includes the resources, open pit mine plan, operating and capital costs and financial analysis for the Leach Only Project which contemplates the production of approximately 25,000 metric tonnes (or 55,000,000 lbs), per year of copper cathode for a period of 10 years. However, due to current legislation in the Province of Mendoza which prohibits the use of toxic substances (including sulphuric acid which is required in heap leaching of copper ore) and according to CIM Standards on Mineral Resources and Reserves, the Company is unable to quote reserves for the Project, and as a result, the engineering study may not qualify as a preliminary feasibility study as defined in National Instrument 43-101. The Ausenco Technical Report was prepared in conjunction with an updated NI 43-101 resource estimate completed by NCL Ingeniería y Construcción S.A. ("NCL"), Santiago, Chile, as announced in the Company's news release NR-08-01 on January 16, 2008, and which updated NI 43-101 resource estimate is available for review on SEDAR at www.sedar.com. All references to $ in this News Release are references to US$.
Highlights
Measured and Indicated Resources of oxide and enriched material of 58 million tonnes at 0.59%CuT containing 750 million lbs of copper
Open Pit Mine Plan based on 48 million tonnes at 0.61%CuT containing 650 million lbs of copper
Mine life of 10 years
Total copper production of 492 million lbs
Base Case copper price of $1.65/lb
Upside Case copper price of $2.00/lb
Average cash operating costs in years 1-5 of $0.90/lb before acid sales credit
Stand alone acid plant generating project power requirements and acid sales of approximately 200,000 tonnes per year
Average cash operating costs in years 1-5 of $0.55/lb after acid sales credit
Initial capital costs of $162 million with an accuracy of +/- 25%, including $5 million in project contingency and $4 million in working capital
Base Case pre-tax NPV (10%) $159 million with an IRR of 28%
Base Case after tax NPV (10%) $77 million with an IRR of 20%
Upside Case after tax NPV (10%) $139 million with an IRR of 28%
This announcement describes the highlights from the Ausenco Technical Report for development of the Project using heap leaching only; its successful development will be contingent on the Company succeeding in the legal action which it commenced in July 2007 to contest the Mendoza legislation described above on grounds of unconstitutionality, or the legislation being changed. The Company subsequently has been evaluating the development of San Jorge by conventional flotation methods, which in the Company's opinion do not require the use of prohibited toxic substances. A further announcement will be made in due course regarding the conclusions of the Preliminary Economic Assessment for the San Jorge Float Only Project, which as announced in the company's news release NR-08-03 of February 14, 2008, is being completed by GRD Minproc.
Coro is confident that San Jorge could be developed in an environmentally responsible manner to the lasting economic and social benefit of the local community and the Province of Mendoza. For further information about San Jorge please refer to the Company's website, www.coromining.com.
I. Mineral Resources:
San Jorge is a mid-sized porphyry copper gold deposit, containing oxide, enriched, and primary mineralization. Resources are contained within Oxide material, which can only be processed by heap leach methods; Enriched material, which could be processed by heap leach or flotation; and Primary material which can only be processed by flotation methods.
Table 1: San Jorge Mineral Resources
Measure & Indicated (at 0.30% CuT cut-off)
The gold and the Primary resources would not be recoverable in the Leach Only Project, and therefore only the leachable oxide and enriched copper resources within an economic envelope of $1.50/lb copper are shown in Table 2 below;
Table 2: San Jorge Leach Only Project Mineral Resources
Within economic envelope, based on a price of $1.50/lb Copper
II. Mining, Processing and Production Plan:
The Leach Only Project contemplates an open pit mine to extract oxide and enriched material and their processing by heap leach methods, (including bacterial leaching for the enriched material) and recovery of cathode copper via solvent extraction-electro winning (SXEW) together with an on-site sulphur burning acid plant. Overall resources contained in the mine plan developed by NCL are 48.4 million tonnes, with an average grade of 0.61% CuT of which 55% is oxide and 45% is enriched. The Inferred resources were considered as waste.
The mine plan was driven by two factors; firstly to process up to a maximum of 6.3 million tonnes per year in the crushing plant; and secondly to minimize the overall strip ratio, especially in the early years. This plan to place a total of 48.4 million tonnes of oxide and enriched material on to heap leach pads was then used by Ausenco to prepare a processing plan for the production of up to 25,000 tonnes per year of copper cathodes during the Life of Mine ("LOM") as is set out in Table 3:
Table 3: San Jorge - Mine, Plant Processing and Production Plan
The overall LOM strip ratio is relatively low at 0.77:1. The strip ratio peaks at 1.65 in the fifth year with a minimum strip ratio of 0.25 in year eight.
In developing the mine plan, NCL used a Whittle Pit design price of $1.50/lb copper. A Whittle Pit sensitivity analysis was undertaken which demonstrated that the mine plan is relatively insensitive to copper prices over $1.30/lb copper. The selected sequence preferentially extracts oxide ore early in the mine life, delaying the mining and processing of the enriched ore which has slower leach kinetics, as well as deferring project capital.
The production plan contains 223,400 tonnes of recoverable cathode copper. A total of seventeen 4 & 6 m column tests were completed at SGS Laboratories, Santiago, Chile. The results of this testwork were analyzed by a diffusion controlled Leaching Model developed by Ausenco which used a scale-up factor of 1.5 and derivation of the projected leach cycle of 115 days for oxides and 150 days for enriched, acid consumptions of 26.1 kg/t for oxides and 18.3 kg/t for enriched, and recoveries of 85% of total copper for oxides and 66.3% of total copper for enriched.
Operating cost estimates reflect the current market environment in Argentina for owner mining, crushing, agglomeration, transport and stacking of ore, acid and power production from a sulphur burning acid plant, cathode production by solvent extraction and electro-winning, acid sales and truck transportation for cathodes.
After a series of trade off studies of the various power and acid supply alternatives, it was concluded that current and projected sulphuric acid shortages and potential electricity supply constraints in Chile and Argentina were best addressed by the inclusion of a 330,000 tonne per year on-site sulphur burning acid plant in the project capital which is estimated to cost $36.6 million. The acid plant was sized to provide essentially all of the projected power requirements for the operation, thus eliminating the need for a power line. Sulphuric acid produced in excess of the project requirements was assumed to be sold into the local Argentinean and Chilean market at a deemed long term price of $90/t while sulphur was priced at $150/t. At the design capacity, the acid plant would generate approximately 200,000 tonnes per year of acid sales for average annual revenues of approximately $20 million.
III. Operating Costs:
All operating costs associated with the acid plant, including those related to acid produced for sale, have been included in the plant operating costs and the revenues from acid sales treated as a credit against the overall project cash cost, as shown in Table 4.
Table 4: San Jorge -- Average Annual Operating Costs, Years 1-5
IV. Capital Costs:
Initial capital costs, including mining fleet costs, owner costs, working capital, and contingencies, were estimated by Ausenco Canada Inc and NCL at $162 million, as set out in Table 5 below:
Table 5: San Jorge -- Capital Cost Estimate
An additional $18 million in capital is expended over the life of the project as deferred, sustaining and closure costs. The capital cost estimate excludes losses or gains that may arise from foreign exchange rate variations, cost escalation, and other factors, as detailed in the Technical Report.
V. Financial Analysis:
The Project has been evaluated on both a pre-tax basis and after all taxes, including export levy and provincial royalty. The Base Case operating cash flow peaks at $71 million in the eighth year with a minimum cash flow of $33 million in the tenth year, which is the last operating period, as shown in Table 6 below:
Table 6: San Jorge Base Case Operating and Pre-Financing Cash Flows
Table 7 below provides a summary of the economic evaluation at the Base Case copper price of $1.65/lb and the Upside Case copper price of $2.00/lb.
Table 7: San Jorge Economic Evaluation Summary at $1.65/lb and $2.00/lb
VI. San Jorge NI 43-101 Technical Report:
Ausenco managed the preparation of the Technical Report which will be completed and filed on SEDAR and Coro's web site within 45 days of this release.
All principal technical personnel and Qualified Persons ("QP") participating in the development and review of this Technical Report have extensive relevant experience.
Rodrigo de Brito Mello, QP employed by NCL Ingeniería y Construccion ("NCL"), assisted by Fernando Fuentes, a principal with NCL, was responsible for the development of the resource model, and mine plan. Heriban Soto, MSc, PhD, QP, and Technical Director from SGS was responsible for supervising the metallurgical testwork and reporting reviewing. Graeme Miller, QP from Miller Metallurgical Services, Brisbane, Australia developed the model to estimate industrial leach cycle, acid consumption, and copper recovery. Greg Lane, General Manager Technical Solutions from Ausenco was responsible for the overall compilation of the Ausenco Technical Report and for compiling the capital and operating cost estimates reported herein. The financial analysis was completed by Coro management.
Collectively, Rodrigo de Brito Mello, Heriban Soto, and Greg Lane are the Qualified Persons for purposes of National Instrument 43-101, and have approved the San Jorge Information contained in this press release. Alan Stephens FIMMM, President and CEO of Coro, a geologist with more than 33 years of industry experience is the Qualified Person for Coro who has reviewed and approved the contents of this press release.
All mineral resources have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different. This press release uses the terms "measured," "indicated" and "inferred" resources. Mineral resources which are not mineral reserves do not have demonstrated economic viability. We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that enable them to be categorized as mineral reserves.
CORO MINING CORP.
"Alan Stephens"
Alan Stephens
President and CEO
About Coro Mining Corp.:
The Company was founded with the goal of building a mining company focused on medium-sized base metals deposits in Latin America. The Company intends to achieve this through the exploration for, and acquisition of, projects that can be developed and placed into production and it has established an experienced development and exploration team to accomplish this. The Company has two main properties; Barreal Seco, in Chile and San Jorge, in Argentina, an option to acquire the Cerro Negro copper mine in Chile as well as other exploration properties located in Chile.
For further information please visit our website at www.coromining.com or contact Michael Philpot, Executive Vice-President, at (604) 682 5546 or email
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Such forward-looking statements or information, including but not limited to those with respect to the prices of copper, sulphuric acid and sulphur, estimated future production, estimated costs of future production, permitting time lines, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such factors include, among others, the actual prices of copper, sulphuric acid and sulphur, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, foreign exchange rate variations as well as those factors disclosed in the Company's documents filed from time to time with the securities regulators in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
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