VANCOUVER, Oct. 3 /CNW/ - Oremex Resources Inc. (TSX-V: ORM) (the
"Company") is pleased to announce positive results from an independent
Preliminary Assessment Study conducted by Snowden Mining Industry Consultants
Inc. ("Snowden") on the Company's Tejamen silver property in Mexico. Snowden
is an internationally recognized independent consulting company that has
completed a large number of assessments for the mining industry.
In order to complete the Preliminary Assessment on Tejamen, Snowden
utilized the results of an independent resource study by Wardrop Engineering
(NI 43-101 compliant as reported in April 11, 2006 news release). That study
concluded that the Tejamen property contains a silver-equivalent Inferred
resource of 50.8 million ounces (69.8 grams per tonne of silver equivalent in
22.6 million tonnes). The base case mining scenario developed by Snowden
utilizes an optimized pit shell containing 21.7 million tonnes grading
51.9 grams per tonne silver and 0.023 grams per tonne gold.
The following table illustrates the impact of the silver price on the
estimated Net Present Value (NPV) of the project, before taxes. A 7% discount
rate has been applied.
<<
NPV Sensitivity to Metal Value
--------------------------------------
Ag Value NPV
$US/oz (US$million)
--------------------------------------
8 19.2
10 58.6
12 97.4
15 155.5
--------------------------------------
>>
Based on the cost and productivity assumptions provided in the
Preliminary Assessment Study, Snowden concludes that a 10,000 tonne per day
(3.65 million tonnes per year) surface mining project and heap leach
processing system can generate a profitable operation when silver prices
average US$8 per ounce (approximately US$0.26 per gram) and process recoveries
for silver average 65 percent or greater over the life of mine. Preliminary
metallurgical testwork to date has indicated recoveries of 70 percent for
silver.
At a silver price of US$10 per ounce, silver recovery of 70 percent,
initial capital investment of US$45.2 million, sustaining capital of
$8.6 million (including a contingency of 15%), and life-of-mine average cash
operating costs of US$5.72 per tonne (including a contingency of 20%) the Net
Present Value is estimated to be US$58.6 million (before taxes). The foregoing
is based on a mine life of approximately seven years, one year of
pre-stripping and heap construction, and an average stripping ratio of
approximately 2:1. At a silver price of US$12 the project has a Net Present
Value of US$97.4 million. The Snowden technical report will be filed on SEDAR.
"This is very good news for Oremex shareholders and enhances shareholder
value," said Linda Thorstad, CEO. "The preliminary assessment study
demonstrates that the Tejamen silver project may be economically viable at
silver prices as low as US$8 per ounce with recoveries that are consistent
with those of preliminary metallurgical test work. The study also provides
recommendations for future development of the project."
It should be emphasized that the Preliminary Assessment is based on
information generated prior to the recent diamond drilling program, and does
not consider the exploration potential of the Tejamen property, which is open
in several directions and at depth. A 12,500-metre reverse circulation program
is planned to test the lateral and vertical limits of mineralization and to
provide in-fill data to transfer the resources to a higher category. The
in-house qualified person responsible for the projects is Linda Thorstad,
P.Geo., Chief Executive Officer.
In addition to its Tejamen silver property, the Company holds the San
Lucas Property, where a 19-hole (3,042 metre) drill program outlined a
silver-gold mineralized system with lead and zinc in volcanic rocks.
Highlights include 9.26 grams per tonne gold and 233 grams per tonne silver
over 4 metres in Hole No.3 and 6 metres of 203 grams per tonne silver in Hole
No.4. Surface mapping and sampling have traced the zone for a two kilometre
strike length. The Company also holds four other properties in Mexico.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy and accuracy of this release.
National Instrument 43-101 requires the following statement: that the
preliminary assessment is preliminary in nature, that it includes inferred
mineral resources that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized.
Forward Looking Statements: The above contains forward looking statements
that are subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially from those
anticipated in our forward looking statements. Factors that could cause such
differences include: changes in world commodity markets, equity markets, costs
and supply of materials relevant to the mining industry, change in government
and changes to regulations affecting the mining industry. Forward-looking
statements in this release include statements regarding future exploration
programs, operation plans, geological interpretations, mineral tenure issues
and mineral recovery processes. Although we believe the expectations reflected
in our forward looking statements are reasonable, results may vary, and we
cannot guarantee future results, levels of activity, performance or
achievements.
