TORONTO, April 24, 2013 /CNW/ - Sierra Metals Inc.
(TSX-V:SMT) (BVL:SMT) ("Sierra Metals" or the "Company" previously
Dia Bras Exploration) is pleased to provide this revised news
release which includes additional supporting details on the
pre-feasibility study completed by Gustavson Associates, LLC
("Gustavson") of Lakewood,
Colorado, for its Bolivar copper-zinc-silver mine located in
Chihuahua State, Mexico announced
on April 17, 2013. The study,
mine plan and reserve estimate are based on Gustavson's work and
mine plan.
Press Release Highlights:
- Proven and Probable reserves total 7,456,806 tonnes at 1.044%
CuEq averaging 19.5 g/t silver, 0.759% Cu, 0.329% Zn. Gold
contents average 0.226 g/t but were not included in the CuEq
calculation, but were included within the project's economics.
- The reserves are based on the October 15, 20123 NI 43-101
Technical Report on Resource, which reported 15,404,000 tonnes of
Measured and Indicated Resources averaging 19.4 g/t silver, 0.79%
copper, and 1.01% zinc at a cut-off grade of 0.66% CuEq. Gold
contents, applicable only to portions of the Gallo Superior and
Gallo inferior zones that were modelled, averaged 0.226 g/t and
were added to the Resource model in January 2013 using the same
data used to do the NI 43-101 Technical Report on Resource.
- Of the modelled tonnage, approximately 80% of the Measured and
Indicated Resources are mineable. Only the Gallo Inferior deposit
and a portion of the Gallo Superior were modelled in the
pre-feasibility study because additional drilling is required to
convert M&I resources of Alta Ley and Gallo Superior to Proven
and Probable Reserves.
- Of the modelled tonnage, approximately 80% of the Measured and
Indicated Resources are mineable. Only the Upper and Lower
Gallo deposits were modelled in the pre-feasibility study because
additional drilling is required to convert M&I resources of
Alta Ley and Gallo Superior to Proven and Probable Reserves.
- Economic results show capital costs of US$43.0 million, with
initial cost of approximately US$7.0 million and sustaining capital
over the Life of Mine of approximately US$36.0 million
- The project has an estimated pre-tax NPV of US$135.6 Million
and a post-tax, base case NPV of US$91.7 million, at an 8% discount
rate.
- At a production rate of 2,000 tonnes per day, these reserves
provide a 10-year mine life with an additional year of processing
from the stockpile for a total of 11 years.
- Bolivar is in commercial production at a rate of 1,000 tons per
day and is expected to double its production capacity to 2,000 tons
per day by Q2
|
Sierra Metals has conducted exploration,
development and mining at the Bolívar Mine since 2003.
Exploration includes geologic mapping and diamond core drilling in
the El Gallo, Increíble and Alta
Ley areas, which are located within the area of resource modeling,
and in the La Narizona, La Montura, La Pequeña and El Val areas,
which are located outside the area of resource modeling.
Pilot mining has been conducted and has provided valuable
information regarding metallurgy, recovery rates, smelter treatment
and refining charges, etc.
Bolivar built its new Piedras Verdes ore processing mill in
2010-2011 and declared commercial production in November 2011 with a processing capacity of 1,000
tonnes per day. The data of prior production were used in the
development of the pre-feasibility study preparation and as a guide
to continued mining as well as doubling of production capacity to
2,000 tons per day, which will be effective by the end of
April 2013.
This work resulted in a NI 43-101 and CIM
compliant resource estimate (see press release of August 30, 2012), which is the basis for this
pre-feasibility study. Table 1 shows the Measured and
Indicated Resources of each deposit with the compliant resource
estimate broken out by Measured, Indicated and Measured+Indicated.
Table 1A shows the Resources by each deposit.
The effective date of this resource estimate is
April 5, 2013, and was completed by
Gustavson as an independent report by Zachery J. Black, Qualified Person as defined by
NI 43-101. Mineral resources are not mineral reserves and do
not demonstrate economic viability. There is no certainty that all
or any part of the mineral resource will be converted to mineral
reserves.
Table 1 Total Resources for the Bolívar
Mine
Total Bolivar
Measured Resources |
Cutoff |
Tonne |
Copper
Equivalent |
Silver |
Copper |
Zinc |
Gold |
Cueq (%) |
(x
1000) |
% |
lbs. (x
1000) |
gpt |
oz. (x
1000) |
% |
lbs. (x
1000) |
% |
lbs. (x
1000) |
gpt |
oz. (x
1000) |
0.66% |
8,847 |
1.35% |
264,205 |
22.3 |
6,333 |
0.87% |
169,423 |
0.98% |
190,851 |
0.2 |
49.6 |
Total Bolivar
Indicated Resources |
0.66% |
6,557 |
1.14% |
164,706 |
15.6 |
3,285 |
0.67% |
97,316 |
1.05% |
151,389 |
0.2 |
30.8 |
Total Bolivar
Measured + Indicated Resources |
0.66% |
15,404 |
1.26% |
428,912 |
19.4 |
9,619 |
0.79% |
266,739 |
1.01% |
342,240 |
0.2 |
80.4 |
Note: Gold grade is not included in copper equivalent
calculation and is only estimated in El Gallo Superior and El Gallo
Inferior. |
Table 1A: M&I Tonnes and Grade by
Deposit
Zone |
Tonnes |
Ag
(gpt) |
Cu
(%) |
Zn
(%) |
CuEq (%) |
Au (gpt) |
El Gallo Superior |
2,041,527 |
30.920 |
1.226 |
0.468 |
1.663 |
0.208 |
El Gallo Inferior |
8,550,959 |
20.820 |
0.757 |
0.366 |
1.064 |
0.243 |
Increible |
- |
- |
- |
- |
- |
Not
Modeled |
Alta Ley |
4,811,788 |
12.161 |
0.649 |
2.530 |
1.446 |
Not Modeled |
Total |
15,404,274 |
19.454 |
0.785 |
1.055 |
1.263 |
0.236 |
Note: CuEq>0.66 AND M&I
The equation for copper equivalent is presented below.
Equation for Copper Equivalent
Cueq(%) = Cu % + |
Zn%
* Zn price * Zn recovery |
+ |
Ag
gpt * Ag Price * Ag recovery |
|
Cu Price * Cu recovery |
|
22.0462 * Cu price * 31.10348
* Cu recovery |
Values used for copper equivalent calculation
are provided below:
- Copper
-
- $3.56 per pound
- 82% recovery
- Zinc
-
- $0.96 per pound
- 81% recovery
- Silver
-
- $26.28 per pound
- 77% recovery.
Gustavson received diamond drill data for 683 drill
holes located within the area of the underground mine workings, and
in the Bolívar III, Bolívar IV, Piedras
Verdes, and El Gallo
concessions to characterize the skarn-type mineralization.
Data from these holes as well as underground mapping and sampling
were included in the study.
The recovered tonnes, including dilution, for each
area were then scheduled for production. The total tonnes and
grades shown in Table 2 constitute the Reserve Statement for the
Bolivar Project as of the date of this pre-feasibility
report. These tonnes are mined from only the El Gallo
Superior and El Gallo Inferior. Additional information,
namely additional drill holes, is required to move the Measured and
Indicated tonnes at Alta Ley to reserves.
On an overall recovery of the Gallo Deposits, 7.46
million tonnes are mined from the Gallo deposits (2.04 + 8.55
million tonnes for a total of 10.59 million tonnes). This is an
overall recovery of 70.5% of the material modeled. However,
from the economic model where only the final logical mine layout
was used, the recoveries of the mineable Resources range from 76.0
% to 83.5%. Essentially the mine plan recovers 70.5% of the M+I,
but recovers 76-83% of the M+I.
This Reserves Statement has an effective date of
April 5, 2013 and was completed by
Gustavson as an independent report under the supervision of
Karl D. Gurr, Qualified Person as
defined by NI 43-101.
Table 2 Combined Reserve Statement for the
Bolivar Project
RoM Tonnes + Diluted Grades |
Tonnes |
Ag
gpt |
Cu % |
Zn % |
CuEq % (no
Au) |
Au
gpt |
RoM - Proven |
4,339,914 |
22.52 |
0.84% |
0.19% |
1.11% |
0.223 |
RoM - Probable |
3,116,893 |
15.35 |
0.65% |
0.52% |
0.95% |
0.231 |
Total P+P |
7,456,806
|
19.52 |
0.76% |
0.33% |
1.04% |
0.226 |
Economic parameters used in the calculation are
shown in the Appendix below.
Gustavson is of the opinion that these deposits
could potentially yield more Reserves as data collection and
interpretation continue, based on current conditions.
Quality Assurance
The technical content of this news release has been
approved by Thomas L. Robyn, Ph.D.,
CPG, RPG, a Qualified Person as defined in NI 43-101 and Senior
Vice President, Exploration, for Sierra Metals, Inc. and
Donald E. Hulse of Gustavson
Associates LLC, Qualified Person as defined by NI 43-101
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company
focused on precious and base metals from its Yauricocha mine in
Peru and its Bolivar mine in
Mexico. The Company is also
advancing its Cusi silver project in Mexico from advanced development into
commercial production. In addition, Sierra Metals is exploring
several precious and base metal targets in Peru and Mexico. Projects in Peru include Adrico (gold), Victoria (copper-silver) and Ipillo
(polymetallic) at the Yauricocha Property in the province of
Yauyos. Projects in Mexico include
Bacerac (silver) in the
state of Sonora, La Verde (gold) at the Batopilas Property in
the state of Chihuahua, and
Las Coloradas (silver) at the
Melchor Ocampo Property in the
state of Zacatecas.
The Company's shares trade on the Bolsa de
Valores de Lima and TSXV under the
symbol "SMT".
This press release does not constitute an offer
to sell or solicitation of an offer to buy the securities in
the United States or any other
jurisdiction. The Common Shares will not be and have not been
registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
Neither the TSXV nor its Regulation Services
Provider (as that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Forward-Looking Statements
Except for statements of historical fact contained
herein, the information in this press release may constitute
"forward-looking information" within the meaning of Canadian
securities law. Other than statements of historical fact, all
statements are "forward-looking statements", which involve various
known and unknown risk and uncertainties and other factors,
including market conditions that may affect the Company's ability
to execute its current business plan. Actual results might
differ materially from results suggested in any forward-looking
statements. The Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward-looking
statements unless and until required by securities laws applicable
to the Company. Additional information identifying risks and
uncertainties is contained in filings by the Company with the
Canadian securities regulators, which filings are available at
www.sedar.com.
Appendix
Economic Results |
|
|
|
Value |
Units |
Market Price Assumptions
(3 year trailing average) |
|
|
|
Copper |
$3.69 |
$/lb |
|
Zinc |
$0.95 |
$/lb |
|
Gold |
$1,487.00 |
$/oz |
|
Silver |
$28.80 |
$/oz |
Estimate of Cash
Flow (all values in $000s) |
|
Net Smelter Return (NSR) |
|
$/t-conc |
|
Copper Concentrate |
$459,964 |
$2,487.44 |
|
Zinc Concentrate |
$17,313 |
$576.29 |
|
NSR |
$477,277 |
|
|
Freight & Handling |
($1,005) |
|
|
Gross Revenue |
$476,272 |
|
|
Royalty |
$0 |
|
|
Net Revenue |
$476,272 |
|
|
Operating Costs |
|
$/t-ore |
|
Mining |
$119,594 |
$16.04 |
|
Processing |
$99,783 |
$13.38 |
|
G&A |
$20,418 |
$2.74 |
|
Total Operating |
$239,795 |
$32.16 |
|
|
|
|
|
Operating Margin (EBITDA) |
$236,477 |
|
|
Initial Capital |
$7,002 |
|
|
LoM Sustaining Capital |
$35,966 |
|
|
Income Tax |
$60,183 |
|
|
Cash Flow Available for Debt Service |
$133,325 |
|
|
NPV (8% discount Rate) |
$91,665 |
|
|
|
|
|
SOURCE Sierra Metals Inc.