Shares Issued and Outstanding: 70,020,705 TSX: NOM BVL: NOM
TORONTO and LIMA, Peru, June 30 /CNW/ - Norsemont Mining Inc. ("the Company") (TSX: NOM, BVL: NOM) today announced that the Company has made the fifth and final Constancia acquisition payment of US$4 million to Mitsui Mining and Smelting Co. Ltd. ("Mitsui"). This completes an eighteen-month payment program under which Norsemont has acquired an undivided 100 percent interest in the Constancia copper-molybdenum-gold-silver project in southern Peru.
Through the exercise of an option agreement, Norsemont acquired Rio Tinto's 70 percent interest in Constancia for a cash consideration of US$13 million. Concurrently, Norsemont entered into an agreement with Mitsui to purchase the remaining 30 percent interest in Constancia for a cash consideration of US$9.8 million payable in five tranches. Today's payment of US$4 million represents the final payment to Mitsui.
Commenting, Norsemont CEO, Patrick Evans said: "Through an investment of $22.8 million, Norsemont has acquired full control over a project with a net present value estimated at $530 million. This has been achieved without have to sell any portion of Constancia's future metal off-take. In addition, we have purchased the surface rights over approximately 4,000 hectares at the Constancia project, which is of significant strategic benefit for the project's future development."
Norsemont is currently completing the Constancia feasibility study, the results of which are expected to be released during the coming quarter. In addition, the Constancia environmental and social impact assessment remains on schedule for completion by the end of 2009. Permitting for the Constancia project is expected to take approximately six months.
Following the successful completion of the recent rights issue, Norsemont is also preparing to recommence exploration drilling on the prospective Pampacancha copper-gold project, which is located 2 kilometres south-east of the Constancia deposit. Drilling at the recently discovered Chiloroya South discovery, located 5 kilometres south of Constancia, will commence as soon as the required permits have been issued. These discoveries are expected to support the Company's vision to increase the global Constancia resource to more than 800 million tonnes.
About Norsemont Mining
Norsemont Mining is a Canadian mineral exploration and development company focused on the 100 percent-controlled Constancia Cu-Mo-Ag deposit in southern Peru.
The Constancia Project currently has a 43-101 compliant indicated resource of 256.3M tonnes at 0.5% Cu (2.85 Billion lbs Cu) and an inferred resource of 156.5M tonnes at 0.33% Cu (1.14 Billion lbs Cu). A recently completed scoping study anticipates a project producing in excess of 90,000 tonnes of copper annually. The study indicates the project has a net present value of $530 million and an internal rate of return of 25.3 percent. The following long-term commodity price assumptions were used in the study: copper $1.80 per pound, molybdenum $12 per pound and silver $11 per ounce. The full study, dated December 11, 2007, and titled "Preliminary Assessment of the Constancia Project, Department of Cusco, Peru" is available for viewing on SEDAR. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The technical information provided in this press release was reviewed and approved by Robert. W. Baxter (MAusIMM), the President and a director of the Company and a qualified person for the purposes of National Instrument 43-101.