VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov 21, 2013) - THEMAC Resources Group Limited (TSX VENTURE:MAC) ("THEMAC") is pleased to announce that it has filed a technical report titled "Copper Flat Project, Form NI 43-101F1 Technical Report Feasibility Study, Sierra County, New Mexico, USA" dated November 21, 2013 (the "Report").
Copper Flat is a former producing mine located in Sierra County, New Mexico, USA, approximately 150 miles south of Albuquerque and 20 miles southwest of the town of Truth or Consequences, New Mexico. The project land package comprises 4,741 acres, with the majority of the mineral reserves located on patented mining claims that are wholly-owned by THEMAC.
The Report summarizes the results of a feasibility study on the Copper Flat copper-gold project, which results were first reported by the Company in a news release dated October 7, 2013. The Report was prepared by M3 Engineering & Technology Corporation.
The Report is available on SEDAR (www.sedar.com) and is also posted on the Company's website (www.themacresourcesgroup.com). All amounts below are in United States Dollars and all quantities are presented in US standard units unless stated otherwise.
FINANCIAL SUMMARY
The Feasibility Study includes financial analysis on three scenarios with varying metal prices: 1) The base case uses a long term copper price of $3.00/lb; 2) A price upside case based on a $3.25/lb long term copper price (all other metal prices held constant); and 3) a price downside case based on a $2.75/lb long term copper price.
The financial return table below is after tax, unlevered and with no escalation in commodity prices.
| Financial Returns |
| Case | NPV@0% (US$000) | NPV@8% (US$000) | IRR
(%) | Payback
(Years) |
| Base Case | $457,000 | $187,000 | 20.0 | 3.6 |
| Upside Price | $564,000 | $253,000 | 23.8 | 3.3 |
| Downside Price | $348,000 | $118,000 | 15.8 | 4.1 |
| Base Case: Copper $3.00/lb, Moly $9.50/lb, Gold $1,350/oz and Silver $22.00/oz |
| Upside Sensitivity: Copper $3.25/lb, Moly $9.50/lb, Gold $1,350/oz and Silver $22.00/oz |
| Downside Sensitivity: Copper $2.75/lb, Moly $9.50/lb, Gold $1,350/oz and Silver $22.00/oz |
"I would like to thank all involved for their efforts in to completing an excellent study. We are pleased that the results indicate Copper Flat is a viable project. Now that the feasibility is complete, we will be focusing on progressing engineering design works and gaining the remaining permits required to develop the mine," said Andrew Maloney, CEO.
MINERAL RESERVES AND RESOURCE
Copper Flat's proven and probable mineral reserves increased by 15%, or 15 million tons, to 113.1 million tons, when compared to the previous 2012 mineral reserve. This material contains 675 million pounds of copper, 20 million pounds of molybdenum, 340 thousand ounces of gold and 6.8 million ounces of silver, and has an average copper equivalent grade of 0.39%. Copper equivalent factors used account for metal price, metallurgical recovery and smelter payable factors. Listed below are Copper Flat mineral reserves and mineral resources as of April 2, 2013.
| Mineral Reserves |
| October 7, 2013 |
| | | Mineral Reserves | Contained Metal |
| Classification | Cutoff Grade | | Copper | Moly | Gold | Silver | Copper | Moly | Gold | Silver |
| | NSR/Ton | Ktons | % | % | Oz/ton | Oz/ton | Lbs x 1000 | Lbs x 1000 | ozs x 1000 | ozs x 1000 |
| | Variable By Year | | | | | | | | | |
| Proven | $12.75 to $6.11 | 78,857 | 0.32 | 0.010 | 0.003 | 0.07 | 504,685 | 15,771 | 237 | 5,520 |
| Probable | $12.75 to $6.11 | 34,227 | 0.25 | 0.007 | 0.003 | 0.04 | 171,135 | 4,792 | 103 | 1,369 |
| Total P&P | | 113,084 | 0.30 | 0.009 | 0.003 | 0.06 | 675,820 | 20,563 | 340 | 6,889 |
| | | | | | | | | | | |
| Notes: | Mineral reserves equal the total ore planned for processing from the mine plan |
| | Ktons means 1000 short tons. Short tons = 2000 lbs |
| | Copper and Molybdenum grades are percent of dry weight |
| | Gold and Silver are reported in Troy ounces / short ton |
| | Metal Prices: $3.00 Copper, $8.00 Moly; $1,350 Gold, $20.00 Silver |
| | No Economic Credit to Inferred |
The total measured and indicated mineral resource (inclusive of mineral reserves) has increased by 35% or 79 million tons to 305 million tons, when compared to the previous 2012 mineral resource estimate.
| Total Mineral Resource |
| October 7, 2013 |
| | | Tonnage and Grade | Contained Metal |
| Classification | Cutoff Grade | | Copper | Moly | Gold | Silver | Copper | Moly | Gold | Silver |
| | NSR/Ton | Ktons | % | % | Oz/ton | Oz/ton | Lbs x 1000 | Lbs x 1000 | ozs x1000 | ozs x 1000 |
| | | | | | | | | | | |
| Measured | $6.11 | 126,655 | 0.28 | 0.009 | 0.003 | 0.06 | 709,268 | 22,798 | 380 | 7,599 |
| Indicated | $6.11 | 178,571 | 0.19 | 0.005 | 0.002 | 0.04 | 678,570 | 17,857 | 357 | 7,143 |
| Meas + Ind | | 305,226 | 0.23 | 0.007 | 0.002 | 0.05 | 1,387,838 | 40,655 | 737 | 14,742 |
| | | | | | | | | | | |
| Inferred | $6.11 | 27,646 | 0.20 | 0.004 | 0.001 | 0.02 | 110,584 | 2,212 | 28 | 553 |
| | | | | | | | | | | |
| Notes: | Mineral Resources stated above include the mineral reserve |
| | Mineral Resources are contained within a floating cone pit geometry at prices listed below. |
| | Ktons means 1000 short tons. Short tons = 2000 lbs |
| | Copper and Molybdenum grades are percent of dry weight |
| | Ktons means 1000 short tons. Short tons = 2000 lbs |
| | Gold and Silver are reported in Troy ounces / short ton |
| | Metal Prices: $3.00 Copper, $8.00 Moly; $1,350 Gold, $20.00 Silver |
The mineral reserves and mineral resources have been developed from a computerized block model that is based on a drill hole database incorporating a total of 233 drill holes and 181,326 feet of drilling that continued through to the end of 2012. In addition to the drilling program, the company re-assayed more than 6,000 historical pulps to obtain gold and silver data. The mineral reserve has benefited from additional geotechnical drills holes that allowed the pit wall slopes to steepen due to improved rock conditions.
OPERATING COSTS
Average cash operating costs, net of by-product revenue, and using the base case pricing scenario, are estimated at US$0.93 per pound of copper recovered into concentrate before smelter deductions during the first five years of production and US$1.15 per pound of copper recovered into concentrate before smelter deductions over the full life-of-mine. On an equivalent copper basis, cash operating costs average $1.56 per equivalent pound of copper recovered into concentrate before smelter deductions over the life-of-mine.
On a cost per ton basis, cash operating costs are estimated at $11.29 per ton processed, excluding by-product credits. Cash operating costs include mining, processing, site general and administration, treatment and refining, and concentrate transportation costs.
| Life-of-mine Operating Cost |
| Operating Cost | $/Ton of Ore | $/lb of Cu |
| Mining Cost | $2.61 | $0.47 |
| Process Cost | $4.83 | $0.87 |
| General Administration Cost | $0.56 | $0.10 |
| Treatment & Refining Charges | $3.29 | $0.59 |
| Total Operating Cost | $11.29 | $2.03 |
| By-Product Revenue | ($0.88) |
| Total Operating Cost Net of By Product Revenue | $1.15 |
CAPITAL COSTS
The total initial capital cost for construction, mine pre-development, commissioning and owner's cost is estimated to be $360.5 million. Sustaining capital will total $63 million over the life of the operation.
The project is a brownfield redevelopment project in a stable region with excellent access to existing infrastructure. The project will realize savings through the reuse of significant infrastructure that remains from the original Quintana Mine, which provides an estimated $53.9 million in value to the Project.
| Initial And Sustaining Capital |
| Initial Capital | Amount
($1000) |
| Mine | $15,300 |
| Plant | $310,200 |
| Owner Cost | $35,000 |
| Total | $360,500 |
| | |
| Sustaining Capital | Amount
($1000) |
| Mine | $24,900 |
| Process | $34,600 |
| G&A | $3,000 |
| Total | $62,500 |
MINING AND PROCESSING
Copper Flat is a porphyry copper-gold deposit that is located in close proximity to the surface and amenable to open pit mining methods. The pit operations are planned to use standard mining equipment, including: 45,000 lb., single pass rotary blast hole drills, 19-cu-yd front-end loaders, and 100 ton off-highway haul trucks. The Mine plan includes a mine support fleet comprised of track and rubber-tired dozers, motor graders, and 10,000-gallon water trucks. Material mined totals 158 million tons of ore and waste over the life-of-mine at an average stripping ratio of 0.40 tons of waste per ton of ore. The mining rate peaks at 17.5 million tons of total material per year.
The construction program benefits from the use of existing infrastructure and the timeframe expected to construct and commission the project is estimated to require 18 months. Following construction, the project schedule includes 11.1 years of ore processing and four years for reclamation and closure.
Ore will be processed through a standard crushing, grinding and sulfide flotation concentrator to produce a copper-gold-silver concentrate and a molybdenum concentrate. The Copper Flat concentrator is scheduled to process 10.8 million tons per year for the first five years of production and 9.9 million tons per year for the remainder of the mine life when harder ores are encountered at depth in the deposit. Copper recovery to concentrate is projected to average 70 million pounds per year during the first five years of operation and 57 million pounds per year when averaged over the full life-of-mine.
The Copper Flat ore lends itself to common crushing and grinding practice and standard flotation reagents and the mill is designed to have a simple gyratory crusher and SAG/ball mill grinding circuit followed by a conventional floatation circuit to produce separate copper and molybdenum concentrates. Metallurgical testing shows the Copper Flat ore contains coarse gold that is recoverable through physical separation and gravity separation equipment, this equipment is included in the process flow sheet to improve gold recovery. As a result of metallurgical test work, the expected life-of-mine process recoveries are projected to be: 93.1% copper; 78.0% molybdenum; 73.7% gold; and 82.7% silver.
The mine will produce approximately 100,000 tons of copper concentrate and 1,300 tons of molybdenum concentrates per year for the life-of-mine. The copper concentrate is expected to assay 27% to 30% copper based on lab tests and actual plant performance achieved by Quintana Minerals in the past operation. The molybdenum concentrate is expected to assay 50% to 60% molybdenum oxide. ICP analysis of the copper concentrate determined that the concentrate is expected to contain very low concentrations of potential smelter penalty elements
| Production Metrics |
| Mine Life (Years) | 11.1 |
| Strip Ratio (Waste Tons : Ore Tons) | 0.4:1 |
| LOM annual processing rate (Ktons) | 10,200 |
| Copper equivalent LOM annual production (Klbs) | 73,800 |
| Copper equivalent LOM production (Klbs) | 819,000 |
| Copper LOM annual production (Klbs) | 56,600 |
| Copper LOM production (Klbs) | 628,000 |
| Gold LOM annual production (Ktrozs) | 20 |
| Gold LOM production (Ktrozs) | 227 |
| Copper equivalent LOM average grade | 0.39% |
| Note: The Moly and Silver LOM annual production and LOM production are not included in table above. |
TECHNICAL REPORT
The complete Feasibility Study National Instrument ("NI") 43-101 Technical Report has been filed on SEDAR at www.sedar.com and is also be available on the Company's website at www.themacresourcesgroup.com
ABOUT M3 ENGINEERING & TECHNOLOGY CORPORATION
The feasibility study was prepared by M3 Engineering & Technology Corporation of Tucson, Arizona, under the supervision of Conrad Huss, P.E., an Independent Qualified Person as defined under Canadian NI 43-101. M3 Engineering & Technology Corporation (M3) provides professional EPCM services and is now recognized as an industry leader in Feasibility Studies and associated NI 43-101's.
ABOUT INDEPENDENT MINING CONSULTANTS
Mineral resources and reserves were calculated by IMC of Tucson, Arizona under the supervision of John Marek, P.E., IMC President, an Independent Qualified Person as defined under Canadian NI 43-101. Since 1983 Independent Mining Consultants, Inc. (IMC) has been recognized worldwide for its expertise in Open Pit Mine Design and Mine Planning as well as Ore Reserve Estimation and Mineral Economics. IMC has worked for large international mining conglomerates, medium sized mines, multiple commodity producers, and exploration firms.
ABOUT GOLDER ASSOCIATES
Engineering and design of the tailings storage facility for Copper Flat was prepared under the supervision of Gene Muller, P.E., an Independent Qualified Person as defined under Canadian NI43-101. Employee owned since being founded in 1960, Golder Associates Inc. provides engineering and environmental consulting services to mining, energy and natural resource industries. Golder has conducted similar studies and engineering evaluations in the southwestern US and internationally.
ABOUT SRK CONSULTING
The mine reclamation plan and closure cost estimate was developed by SRK Consulting (U.S.), Inc. under the supervision of Mark A. Willow, SME-RM, an Independent Qualified Person as defined under Canadian NI 43-101. Originally formed in 1974, SRK is an independent, international organization that provides professional consulting services and expert advice, mainly in the fields of mining, geotechnics, water, waste, and the environment. SRK services clients across a range of industries that are primarily natural resource development oriented.
TECHNICAL INFORMATION AND QUALIFIED PERSONS
Standard procedures for core handling were in place during the entire drilling program, and a geologist was on site for all sample preparation and shipping.
Assaying for the 2012 drilling program was undertaken at the Skyline Laboratory in Tucson, AZ. Copper and molybdenum values were determined by ICP/MS, gold by fire assay with AA finish, and silver by AA. Reference standards and blanks were inserted in the sample streams, and every tenth sample is being objectively validated by ALS Minerals, Reno, Nevada using similar methodologies.
An Appendix of tables and figures for this news release is available on THEMAC's website at www.themacresourcesgroup.com.
Technical information in this news release has been read and approved by Conrad Huss, P.E. (M3 Engineering), John Marek, P.E. (Independent Mining Associates), Gene Muller, P.E. (Golder Associates), Mark Willow, SME-RM (SRK), and J. Steven Raugust, C.P.G., Resource Development Manager (THEMAC Resources) all of whom are Qualified Persons under Canadian NI 43-101.
ABOUT THEMAC RESOURCES GROUP LIMITED
THEMAC is a copper development company with a strong management team which acquired the Copper Flat copper-molybdenum-gold-silver project in New Mexico, USA in May 2011. We are committed to bringing the closed copper mine, Copper Flat, in Sierra County, New Mexico back into production with innovation and a sustainable approach to mining development and production, local economic opportunities and the best reclamation practices for our unique environment. The Company is listed on the TSX Venture Exchange (MAC.V) and has issued share capital of 75,300,122 common shares (fully diluted share capital 132,537,777).
For more information please visit www.themacresourcesgroup.com or review the Company's filings on SEDAR (www.sedar.com).
FORWARD LOOKING STATEMENTS
Certain information contained or incorporated by reference in this press release, including any information as to THEMAC's future financial or operating performance, the likelihood and timing of commercial production, construction of plant, and obtaining required permits, statements with respect to the estimation of mineral resources and reserves, expanding mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, the timing and amount of estimated future production, capital costs, costs of production, metal or mineral recoveries, mine life and production rates, capital expenditures and success of mining operations, expected IRR and NPV constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by THEMAC, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such assumptions include the specific assumptions set out in this press release and in the Report, that future capital and operating costs will be in line with THEMAC'S assumptions, that mineral resource and mineral reserve estimates prove accurate, permits required to commence production will be obtained on a timely basis, copper, molybdenum, gold and silver prices will remain consistent with THEMAC's expectations, that there are no changes in THEMAC's development plans as new information is received, that THEMAC will be able to access financing, equipment and sufficient labour to carry out its planned business.
Known and unknown factors could cause actual results to differ materially from those projected in the forward- looking statements. Such factors include, but are not limited to: fluctuations in the currency markets; fluctuations in the spot and forward price of copper, molybdenum, gold, and silver; volatility in the price of fuel and electricity; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada and the USA; business opportunities that may be pursued by THEMAC; operating or technical difficulties in connection with mining or development activities; employee relations; litigation; the speculative nature of exploration and development, including the risks of obtaining necessary licenses and permits; uncertainty surrounding the availability of water rights required for mining operations which, if not secured, could result in changes to the proposed plan for development of Copper Flat; contests over title to properties, particularly title to undeveloped properties; failure of processing and mining equipment to perform as expected; labor disputes; supply problems; uncertainty of production and cost estimates; the interpretation of drill results; the assumptions upon which the estimation of mineral resources and reserves prove inaccurate, which could lead to a restatement of reserves and resources; changes in project parameters as plans continue to be refined; possible variations in ore reserves, grade of mineralization or recovery rates may differ from what is indicated and the difference may be material; legal and regulatory proceedings and community actions; accidents, title matters; regulatory restrictions; permitting and licensing; volatility of the market price of Common Shares; insurance; competition; and hedging activities. In addition, there are risks and hazards associated with the business of exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave - ins, flooding and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks. Many of these uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, THEMAC. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. THEMAC disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.
"Operating cost per pound of copper", "Life-of-mine sustaining capital", "IRR" and similar terms are alternative performance measures. These performance measures are included because these statistics are key performance measures that management may use to monitor performance. Management may use these statistics in future to assess how THEMAC is performing to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures do not have a meaning within International Financial Reporting Standards ("IFRS") and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.
Neither the TSX Venture Exchange (the "TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has reviewed, nor do they accept responsibility for the adequacy or accuracy of, this release.
