Adex Mining Inc. ("Adex" or the "Company") (TSX VENTURE: ADE) is
pleased to announce the results of a new Preliminary Assessment
("PA") on its wholly-owned Mount Pleasant Mine Property ("Mount
Pleasant" or the "Property") located in southwestern New Brunswick,
Canada. Mount Pleasant is the site of a past-producing
tungsten-molybdenum underground mining operation, which operated
during the 1980s. This PA is a preliminary technical and economic
assessment of the production of tin, indium and zinc products from
the North Zone ("NZ") of the Property.
The results of the PA indicate that there are two viable
production options for the NZ, including the production of tin
concentrate, indium sponge and zinc metal and the production of tin
concentrate and zinc-indium concentrate. Based on a 10-year project
life and production rate of 850 tonnes per day ("tpd"), the PA
shows pre-tax internal rates of return ("IRR") for the tin
concentrate, indium sponge and zinc metal production option and the
tin concentrate and zinc-indium concentrate production option of
28.87% and 23.49% respectively as shown in the table below.
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Option 1 Option 2
Production of Production of
Tin Concentrate, Tin Concentrate
Indium Sponge and Zinc-Indium
and Zinc Metal Concentrate
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Pre-tax IRR 28.87% 23.49%
After-tax IRR 23.94% 19.30%
After-tax Net Present Value
("NPV") (discounted at 8%) $54.2 million $21.5 million
Pre-production capital $71.1 million $41.2 million
Production rate 850 tpd 850 tpd
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"These are exciting times for Adex," said Errol Farr, President
and CEO of Adex. "The PA results reinforce Adex's plans for
piloting the concentrate and metals flowsheets as a next phase
leading to definitive feasibility and production. The NZ
development is an integral part of Adex's overall strategy for
producing tin, indium, zinc, tungsten and molybdenum from the
resources at the Property."
NZ production is based on the economic assessment of the
resource over a 10 year mine life, and on conceptual mining and
metallurgical processing methods as well as end-user standard
revenue agreements. The PA indicates that the in situ outlined
mineable blocks total 2,894,579 tonnes grading 0.76% tin, 191 grams
per tonne ("gpt") indium, and 1.91% zinc. The actual production
rate of 850 tpd was determined by applying a 10% dilution factor
with 85% mining extraction.
Results from previously completed metallurgical test programs
characterizing the recovery of tin, indium and zinc from the NZ
resource were used to design a conceptual process flowsheet using
flotation and gravity separation. A dynamic process simulation and
economic model was used to assess the economic potential of the
resource by varying tonnage, grade and prospective revenue
generation for value-added products. Value-added products to be
produced on site include indium sponge and zinc metal from chloride
hydrometallurgy.
The PA is considered to be accurate within minus 10% to plus 35%
on the basis of the:
- purchase of new and refurbished equipment;
- installation costs defined by factored estimates relative to industry
trends;
- local labour and power rates and budget fuel and reagent costs;
- mining costs based on use of new equipment;
- minimum refurbishment of existing infrastructure, including the mine
access adit, processing buildings and facilities, electrical services,
and process, potable and fire water distribution systems, and:
- product revenue determined from standard smelter off-take agreements
(smelter schedules) and published metal pricing for a three year average
up to the second quarter 2009.
The preliminary NZ technical/economic assessment including site
administration, mining, processing, environmental management and
product marketing is summarized below for the two processing
options. Each model includes zinc flotation followed by tin
flotation.
Option 1 - Production of Tin Concentrate, Indium Sponge and Zinc
Metal
Tin concentrate is produced using a combination of flotation and
gravity separation. The process is well documented from testwork
completed on samples of mineralized rock from the NZ by Cominco
Engineering Services Ltd. ("CESL") and Lakefield Research (now SGS)
during the 1990's.
Optimum process chemistry for the hydrometallurgical processing
of zinc concentrate is being defined by bench scale studies prior
to piloting. High-grade indium sponge and zinc metal are the target
products, which rely on a combination of leaching, solvent
extraction and impurity precipitation stages.
Option 2 - Production of Tin Concentrate and Zinc-Indium
Concentrate
Tin and zinc concentrate production are commercially proven
process technologies. The economics of the concentrate option are
sensitive to the net smelter return for indium contained in a zinc
concentrate, which conceptually could be 0.49% (4900 gpt) indium. A
conservative indium pay factor of 15% yields the results disclosed
in this assessment.
Metallurgical and hydrometallurgical test programs designed to
verify the selected process technology, discussion with various
zinc smelters regarding revenue generation from zinc/indium
concentrate, and discussion with indium metal producers are
currently ongoing. Adex has also opened dialogues regarding tin
concentrate sales with metal traders and off-shore tin
smelters.
The PA includes a review by Trevor Boyd, P. Geo., the Company's
Geological Consultant and a qualified person as defined by National
Instrument 43-101 ("NI 43-101"), of the NI 43-101 compliant mineral
resource estimate for the NZ completed by Watts, Griffis and McOuat
Limited ("WGM"), Consulting Geologists and Engineers, and
SGS-Geostat Limited ("SGS") in May, 2009, a mine plan provided by
Andrew Hara, P. Eng., Senior Mining Engineer of Hara Mining
Enterprises Inc., a qualified person as defined by NI 43-101, and
an economic assessment of process alternatives, market evaluation,
and environmental management technology completed by Dean Thibault,
P. Eng., Senior Process Chemical Engineer of Thibault &
Associates Inc., a qualified person as defined by NI 43-101. Dean
Thibault, P. Eng., Senior Process Chemical Engineer of Thibault
& Associates Inc., an independent qualified person and
consultant to Adex, is preparing a NI 43-101 compliant Technical
Report with respect to the PA which Adex will file on SEDAR within
45 days of today's date.
The mineral resource estimate for the NZ is contained in a
Technical Report, entitled "A Technical Review of the Mount
Pleasant Property, Including a Mineral Resource Estimate on the
North Zone, Southwestern New Brunswick for Adex Mining Inc.", dated
May 6, 2009 and completed by Paul Dunbar, P.Geo. Senior Associate
Geologist of WGM and Robert de l'Etoile, Eng. Senior Geological
Engineer of SGS, which is available on SEDAR at www.sedar.com.
Details of this NI 43-101 compliant mineral resource estimate are
as follows:
----------------------------------------------------------------------------
Sub-Zones Tonnes % Sn g/t g/t In % Zn % As %WO3 %MoS2 % Cu % Bi
In Capped
----------------------------------------------------------------------------
Indicated
Deep Tin 5,006,000 0.39 101.0 95.2 0.86 1.25 0.08 0.06 0.14 0.08
Endogranitic 4,336,000 0.55 21.8 20.3 0.28 0.85 0.12 0.06 0.10 0.09
Upper Deep
Tin 838,000 0.22 102.8 94.9 1.36 0.76 0.08 0.06 0.07 0.05
#4 Tin Lode 702,000 0.25 74.1 74.1 1.00 0.19 0.01 0.01 0.09 0.00
Total
Indicated 10,882,000 0.43 67.8 64.0 0.67 0.98 0.09 0.06 0.11 0.08
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Inferred
#1-3 Tin
Lode 2,345,000 0.18 76.8 73.5 1.08 0.28 0.02 0.03 0.09 0.01
#5 Tin Lode 1,267,000 0.15 115.4 111.3 1.50 0.70 0.07 0.04 0.08 0.03
North Adit 3,076,000 0.27 62.1 62.1 0.83 1.16 0.09 0.06 0.09 0.07
North W-Mo 915,000 0.26 54.3 49.8 0.58 1.14 0.25 0.12 0.12 0.10
Total
Inferred 7,603,000 0.22 74.6 72.3 0.99 0.80 0.08 0.05 0.09 0.05
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43-101 compliant mineral resource estimate are as follows:
For the purposes of this review, a total of 97 high grade
Sn-In-Zn blocks of mineralization from the surface to 250 metres
depth were identified from within the NZ indicated and inferred
resources and compiled on sections and subsequently modelled into
GEMCOM solid models. The total undiluted and diluted estimates of
the blocks are presented in the following chart.
----------------------------------------------------------------------------
Total All Tonnes % Sn g/t In % Zn % Cu % Pb % As % Bi % WO3 % Mo
Blocks
----------------------------------------------------------------------------
Undiluted 2,894,579 0.76 191 1.90 0.23 0.04 1.49 0.07 0.10 BD
10% Dilution
Material 289,458 0.17 96 0.95 0.12 0.02 0.74 0.04 0.05 BD
Diluted 3,184,037 0.71 183 1.82 0.22 0.04 1.42 0.07 0.09 BD
85% Mining
Extraction 2,706,432 0.71 183 1.82 0.22 0.04 1.42 0.07 0.09 BD
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BD - below detection.
Fire Tower Zone
Mount Pleasant's tungsten/molybdenum sector of the Property,
called the Fire Tower Zone ("FTZ"), was positively identified as a
viable production opportunity in an Aker Solutions 2008 scoping
study. Capital expenditures for that study depended entirely on new
equipment purchases rather than the new/used mix which is proposed
for the NZ. The scoping study of the FTZ is summarized in an NI
43-101 compliant Technical Report, entitled "A Technical Review of
the Mount Pleasant Property, Including an updated Mineral Resource
Estimate on the Fire Tower Zone, Southwestern New Brunswick for
ADEX Mining Inc." dated December 1, 2008 and completed by Paul
Dunbar, M.Sc., P.Geo. Senior Associate Geologist of WGM, Dorota A.
El-Rassi, M.Sc., P.Eng., Geological Engineer of SRK Consulting and
John S. Rogers, P.Eng., of Aker Metals, a division of Aker
Solutions Canada Inc., which is available on SEDAR at
www.sedar.com.
"The Fire Tower Zone scoping study plus North Zone PA confirm
the potential for a unique multi-metal production opportunity for
Adex," Mr. Farr continued, "which includes simultaneous commercial
production of tungsten and molybdenum products from the Fire Tower
Zone, and tin, indium and zinc products from the North Zone."
The PA and the economic analyses contained therein are
preliminary in nature and contain inferred mineral resources that
are considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as mineral reserves and there is no certainty that the
results of the PA will be realized with more detailed work. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
Qualified Persons
Trevor Boyd, P.Geo. the Company's geological consultant, and a
qualified person as defined by NI 43-101, supervised the
preparation of the technical information regarding the mineral
resource estimate at the Property contained in this press release
in compliance with NI 43-101. Andrew Hara, P. Eng., of Hara Mining
Enterprises Inc., a consultant to Adex and an independent qualified
person as defined by NI 43-101, supervised the preparation of the
technical information regarding mining contained in this press
release in compliance with NI 43-101. Dean Thibault, P. Eng.,
Senior Process Chemical Engineer of Thibault & Associates Inc.,
a consultant to Adex and an independent qualified person as defined
by NI 43-101, supervised the preparation of the technical
information regarding process design and all associated engineering
work leading to mineral and metal production contained in this
press release in compliance with NI 43-101.
ABOUT ADEX
Adex Mining Inc. is a Canadian junior mining company with an
experienced management team. The Company is focused on developing
its flagship Mount Pleasant Mine property, a multi-mineral project
that is host to promising tungsten-molybdenum and
tin-indium-zinc-copper mineralization. Located in Charlotte County,
New Brunswick, the Mount Pleasant Mine property is situated
approximately 80 kilometres south of Fredericton, the provincial
capital, and is 65 kilometres from the United States border. The
common shares of Adex trade on the TSX Venture Exchange under the
stock symbol "ADE." Technical and business information regarding
Adex's Mount Pleasant property is available on SEDAR at
www.sedar.com and the Company's website at www.adexmining.com.
No securities commission or regulatory authority has approved or
disapproved the contents of this press release.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute
"forward-looking" statements which involve known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements of Adex, its subsidiary or the industry
in which they operate to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. When used in this press release, the
words "estimate", "believe", "anticipate", "intend", "expect",
"plan", "may", "should", "will", the negative thereof or other
variations thereon or comparable terminology are intended to
identify forward-looking statements. Such statements reflect the
current expectations of the management of Adex with respect to
future events based on currently available information and are
subject to risks and uncertainties that could cause actual results,
performance or achievements to differ materially from those
expressed or implied by those forward-looking statements. These
risks and uncertainties are detailed from time to time, including,
without limitation, under the heading "Risk Factors", in reports
filed by Adex with the Alberta, British Columbia and Ontario
Securities Commissions which are available at www.sedar.com and to
which readers of this press release are referred for additional
information concerning Adex, its prospects and the risks and
uncertainties relating to Adex and its prospects. New risk factors
may arise from time to time and it is not possible for management
to predict all of those risk factors or the extent to which any
factor or combination of factors may cause actual results,
performance and achievements of Adex to be materially different
from those contained in forward-looking statements. Although the
forward-looking statements contained in this press release are
based upon what management believes to be reasonable assumptions,
Adex cannot assure investors that actual results will be consistent
with these forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
The forward-looking information contained in this press release
is current only as of the date of the press release. Adex does not
undertake or assume any obligation to release publicly any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Adex Mining Inc. J. Errol Farr, CMA President, Chief
Executive Officer and Director 1-866-508-2339 (ADEX)
investorrelations@adexmining.com www.adexmining.com
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