Mercator Gold plc, the diversified mineral development company, is pleased to announce that the Mineral Resources of the Copper Flat copper-molybdenum-goldsilver deposit located in New Mexico, USA have been estimated by SRK Consulting (US), Inc (“SRK”) at 107 million short tons grading an average of 0.303% copper classified as Indicated Resources with an additional 46 million short tons grading an average of 0.240% copper classified as Inferred Resources. The resource is stated above a 0.12% copper cut-off and contained within a potentially economic open pit.
The Mineral Resources are reported in accordance with Canadian National Instrument 43-101 (“NI43-101”) and have been estimated in conformity with the generally accepted Estimation of Mineral Resource and Mineral Reserves Best Practices guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”).
The SRK Mineral Resource statement for the Copper Flat deposit is presented in Tables 1 and 2 below.
Patrick Harford, Managing Director of Mercator Gold plc, comments:
“We are highly encouraged by the results of the SRK resource estimate for the Copper Flat deposit, which is stated at a cut-off grade that reflects current expectations as to the likely cut-off grade of economic interest and which will underpin the preliminary assessment being completed by SRK in advance of the Copper Flat project’s listing on the TSX Venture Exchange through the proposed transaction with THEMAC Resources Group Limited.”
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Notes to Tables 1 and 2:
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$3.50/lb of copper, and a metallurgical recovery of 90.9% for copper. Gold and silver were not used in the pit optimization.
- Reported at a cut-off grade of 0.12% copper contained within a potentially economic open pit.
The Mineral Resources are reported at a cut-off grade to reflect reasonable prospects for economic extraction, which were evaluated by designing a series of conceptual pit shells using the Lerchs-Grossman optimizing algorithm.
SRK considers that portions of the Copper Flat copper deposit are amenable for open pit mining, and has not considered underground mining methods for deeper portions of the deposit.
After review of several scenarios considering different metal prices, design criteria and operating cost assumptions, SRK assumed a copper price of US$3.50/lb; a metallurgical recovery of 90.9%; mining costs of US$1.72/short ton mined; processing and G&A costs of US$5.49/short ton processed; and slope angles of 45º in all areas.
SRK was provided a database of all available drill-hole and underground sampling data, comprising collar, survey, assay, and lithology information, on March 24, 2010. This database includes data from some 191 drill-holes accounting for 134,610ft (41,029m) of drilling/underground drifting. Of this total, some 129,014ft (39,324m) has non-zero values for total copper. Drilling was conducted during 1968-1973 by Inspiration Development, during 1974-1979 by Quintana Minerals and during the early 1990s by Gold Express Corporation. New Mexico Copper Corporation, a wholly owned subsidiary of Mercator, conducted a 7 diamond drill-hole program of confirmation drilling in 2009- 2010.
Approximately 10% of the pulp and core duplicate pulps archived on site were reassayed for copper, molybdenum, gold and silver at SRK’s request. The re-assay data have been validated by SRK and SRK is of the opinion that the results show good reproducibility compared with the historic data provided, and that the data is suitable for use in resource estimation.
All raw assay data was composited into 30ft (9.144m) down-hole lengths. The composite length was selected to reflect the anticipated selective mining unit, with mining currently envisioned using a 30ft (9.144m) bench height.
In order to constrain grade estimation, grade polygons were constructed in 100ft spaced N-S sections using a nominal 0.12% Cu cut-off. Additional higher grade polygons were constructed using a nominal 0.3% Cu cut-off in order to better restrict a geologically continuous higher grade core of the deposit.
A regular celled block model of the deposit was created in Vulcan(™) software, based on a block size of 50ft x 50ft x 30ft (15.24m x 15.24m x 9.144m), which is considered appropriate with respect to the current drill-hole spacing as well as the selective mining unit size typical of the likely type and scale of operations. Block grades for copper were estimated by inverse distance weighting and all block grade estimates were made using length weighted composite drill-hole data.
The Mineral Resources of the Copper Flat deposit have been classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves. Blocks in the model which have been estimated using a minimum of two drill-holes at maximum average block-composite separation distance of 185ft have been classified as Indicated Mineral Resources. Blocks in the model that do not meet the criteria for Indicated Mineral Resources but which are within a maximum average distance of 380ft from one or more drill-holes have been classified as Inferred Mineral Resources.
No resource estimate was conducted for the secondary metals of the Copper Flat deposit (molybdenum, gold and silver), which are of potential economic significance.
There are no known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors which could materially affect the Mineral Resources estimated.
The resource estimate was completed by Jeffrey Volk, CPG, FAusIMM, an independent qualified person, as defined in NI43-101. The effective date of this resource estimate is May 6, 2010 and it is based on data received by SRK in March, 2010. Mr Volk consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
A comprehensive technical report will be produced by SRK within 45 days of the issue of this news release.
About the Copper Flat Project
The Copper Flat copper-molybdenum-gold-silver project, which is located in New Mexico, USA, is a former producing mine with substantial infrastructure still in place. New Mexico Copper Corporation (“NMCC”), a wholly owned subsidiary of Mercator, holds an exclusive option to acquire a 100% interest in the Copper Flat project.
Mercator has entered into a binding heads of agreement with the THEMAC Resources Group Limited (“THEMAC”), a company listed on the TSX Venture Exchange (ticker: MAC.H), in relation to the acquisition of NMCC by THEMAC (“the Transaction”), as announced on March 16, 2010.
As a result of the Transaction, Mercator will hold a substantial interest in THEMAC, and will therefore retain a very significant interest in the Copper Flat project’s future development.
THEMAC and Mercator are working with SRK to complete a preliminary assessment (as defined in NI43-101) on the Copper Flat project. The availability of the preliminary assessment is a condition of completion of the Transaction.
Mercator is a diversified mineral development company dedicated to creating value for its shareholders through a process of finding value, adding value and realising value. Mercator has an experienced management team with expertise in the structuring and execution of value accretive transactions.
For further information please contact:
|Mercator Gold plc|
|Michael Silver, Chairman||Tel:||+44 (0) 20 7929 1010|
|Patrick Harford, Managing Director||+1 646 239 9087|
|Daniel Stewart & Company plc|
|Oliver Rigby||Tel:||+44 (0) 20 7776 6550|
|Old Park Lane Capital plc|
|Forbes Cutler||Tel:||+44 (0) 20 7518 2603|
|Director of Corporate Broking|
|Bankside Consultants Ltd||Tel:||+44 (0) 20 7367 8888|
|Barry Kaplan Associates|
|Larry Kaplan||Tel:||+1 732 747 0702|
Canadian National Instrument 43-101 - a strict set of guidelines on how public companies may disclose scientific and technical information about mineral projects on bourses supervised by the Canadian Securities Administrators.
Cu - copper.
Cut-off grade - the grade used to separate ore and waste such that only material classified as ore will be treated in order to recover the economic metal or mineral of interest.
Deposit - a natural occurrence of mineral or mineral aggregate, in such quantity and quality to invite exploitation.
(verb) to judge or approximate the value, worth, or significance of; to determine the size, extent, or nature of; (noun) an approximate calculation; a numerical value obtained from a statistical sample and assigned to a population parameter.
Inferred Mineral Resource - that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill-holes.
Indicated Mineral Resource - that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, 5 trenches, pits, workings and drill-holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
kt – kilotonnes
Lbs – pounds.
Mineral Resource - a concentration or occurrence of natural, solid, inorganic, or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics, and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
Mineral Reserve - the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
M-lbs – million pounds.
Mst – million short tons.
Mt – million metric tonnes.
Preliminary feasibility study - a comprehensive study of the viability of a mineral project that has advanced to the stage where the mining method, in the case of underground mining, or the open pit configuration, in the case of an open pit, has been established and which, if an effective method of mineral processing has been determined includes a financial analysis based on reasonable assumptions of technical, engineering, operating, and economic factors and evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the Mineral Resource may be classified as a Mineral Reserve.
Preliminary assessment - means a study that includes an economic analysis of the potential viability of mineral resources taken at an early stage of the project prior to the completion of a preliminary feasibility study.
Qualified person - means an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and the technical report; and is a member or licensee in good standing of a professional association.
t – metric tonne.
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