PERTH, WESTERN AUSTRALIA--(Marketwire - March 25, 2009) - Troy Resources NL ("Troy") (TSX:TRY)(ASX:TRY) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Highlights
-
Troy has reached agreement to buy the Casposo gold-silver deposit in
San Juan province of Argentina from Intrepid Mines Ltd ("Intrepid").
-
The acquisition price is US$20 million on closing and US$2m on the 6th
month anniversary of first production. Troy will fund the acquisition
from cash reserves.
- Troy will look to fast track the mine development utilising the gold plant it holds in storage in New South Wales, Australia.
Troy
Resources NL ("Troy") announces it has reached agreement with Intrepid
to acquire its 100% interest in the Casposo deposit in San Juan
Province in Argentina (to see Figure #1 please click on: http://media3.marketwire.com/docs/try325.jpg).
Troy will fund the acquisition out of cash reserves. Completion of the
acquisition is subject to receipt of any consent or approval under any
law or regulation affecting the parties and to completion of a
reorganisation of certain subsidiaries of Intrepid not intended to be
included in the acquisition. Completion is also subject to the parties
settling a definitive acquisition agreement on usual commercial terms.
Commenting
on the result, Troy CEO, Paul Benson, said: "This is an exciting
acquisition for Troy. Casposo is an excellent deposit and Intrepid have
done a great job exploring and proving up the resource. We see this as
tailor made for Troy as we can use our in-house expertise to bring the
mine into production quickly. Our aim is to minimise capital and time
to first production by utilising an existing gold plant we hold in
storage. Ken Nilsson who has built and operated all of Troy's mines
will take responsibility for Casposo."
"The March 2007
feasibility study completed by Intrepid envisaged a 6 year mine life
with the first 4 years being fed by a gold rich open cut followed by 2
years from a silver rich underground mine. The Argentinean based
Intrepid team of geologists working on the project have done an
outstanding job to date and we look forward to this group joining the
Troy team as employees and continuing the exploration program with the
aim of adding to the resource inventory and extending the mine life."
"The
province of San Juan has a very supportive attitude to mining and we
look forward to working with the local regulators and communities to
bring the mine into production as soon as possible."
Troy has a
track record of building mines quickly, efficiently and at low cost and
this will be Troy's third mine in South America. In 2002 Troy acquired
its first mine, Sertao, as an in-situ resource and quickly sourced an
appropriately sized second-hand plant in Australia that was refurbished
and transported to Brazil. In addition, Troy completed an infill
drilling program which increased reserves whilst awaiting shipping.
Time from acquisition to first production was just 14 months with an
initial capital of just US$8m. Plant construction including earth works
took approximately 6 months.
Andorinhas, Troy's second Brazilian
operation was acquired as an in-situ resource in November 2006 and
developed by relocating the mill and plant from Sertao. As additional
milling capacity was required, a second-hand mill was sourced from
Western Australia. Following the acquisition Troy converted the
resource to reserve status, constructed the processing facility and
developed the open cut mine and poured first gold in March of 2008,
sixteen months from acquisition to first production with an initial
capital cost of just US$16m. In mid 2007, Troy commenced development of
the high grade Mamao underground mine which is now ramping up to full
production.
With Casposo we will look to similarly fast track
development to bring it into production as quickly as possible and
expect to utilise some or all of the gold plant we have in storage in
Cobar, New South Wales to lower the capital cost and time of the mine
development.
The Casposo project is subject to royalties payable
to the original owners of the property of US$6 per gold equivalent
ounce on the first 450,000 gold ounces (less royalties already paid
totalling up to US$900,000) and a royalty of US$5.00 per gold
equivalent ounce for each ounce of gold produced in excess of 450,000
ounces.
Casposo is a typical Low Sulphidation epithermal style
gold-silver deposit where mineralisation is hosted within rhyolite
breccias and andesite. Veins are typically banded quartz-chalcedony
colloform - crustiform banded with quartz - carbonate infill.
Mineralisation is associated with an assemblage consisting of quartz,
chalcedony, adularia, calcite, illite, sericite and trace sulphides.
Gold and silver occur as electrum, native silver, sulfosalts and silver
sulphides.
Mineralisation at Casposo occurs along a 10 kilometre
long west-northwest-east-southeast (N60 degrees W) regional structural
corridor, with the main Kamila Vein system forming a sigmoidal set 500
metres long near the centre. The main structural corridor consists of 2
parallel vein sets dipping to the southwest at -60 degrees to -65
degrees (B Vein & Inca Veins). A secondary mineralised trend
comprises multiple north-south striking sigmoidal structures that dip
to the west at -65 degrees (Aztec, AF, B North & MV1 - Mercado
Veins). Ore shoots are typically lenticular bodies up to 200 metres in
length and up to 15 metres wide.
Work completed included surface
sampling and geological mapping, trenching and pitting, detailed trench
sampling of the vein systems, reverse circulation and diamond core
drilling, an airborne magnetic survey, ground gradient-array induced
polarization (IP) and pole-dipole IP surveys as well as bulk sampling
for metallurgical studies. A feasibility study, commissioned in 2005,
was competed in March, 2007.
The latest Casposo Resource
estimate was completed in July 2008 by AMEC International Chile. Open
pit resources were contained within a Whittle pit shell using a gold
price of US$760/oz. Resources below this were classified as underground
resources with a cut-off grade of 3.5g/t Aueq. Grade interpolation
techniques were inverse distance weighted.
The Casposo project
is subject to royalties payable to the original owners of the property
of US$6 per gold equivalent ounce on the first 450,000 gold ounces
(less royalties already paid totalling up to US$900,000) and a royalty
of US$5.00 per gold equivalent ounce for each ounce of gold produced in
excess of 450,000 ounces.
Table #1 Casposo Resources and Reserves
--------------------------------------------------------------------------
CASPOSO MINERAL RESOURCES
--------------------------------------------------------------------------
Gold Silver Gold Gold
grade grade equivalent Gold Silver equivalent
Tonnes (g/t) (g/t) grade (g/t) Ounces Ounces ounces
--------------------------------------------------------------------------
Open pit
Indicated 1,882,400 5.39 130 7.05 326,000 7,854,100 426,900
Inferred 15,800 5.61 137 7.38 2,800 69,900 3,700
--------------------------------------------------------------------------
Underground
Indicated 193,800 1.97 196 4.49 12,200 1,223,200 28,000
Inferred 8,800 2.43 294 6.21 700 83,000 1,700
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TOTAL
Indicated 2,076,200 5.07 136 6.81 338,200 9,077,300 454,900
Inferred 24,600 4.47 193 6.96 3,500 152,900 5,400
--------------------------------------------------------------------------
--------------------------------------------------------------------------
CASPOSO MINERAL RESERVES
--------------------------------------------------------------------------
Gold Silver Gold Gold
grade grade equivalent Gold Silver equivalent
Tonnes (g/t) (g/t) grade (g/t) Ounces Ounces ounces
--------------------------------------------------------------------------
Open pit
Probable 1,399,000 5.44 96.05 6.80 244,600 4,320,300 305,900
--------------------------------------------------------------------------
Underground
Probable 335,000 3.99 220.5 7.11 43,000 2,375,200 76,600
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TOTAL
Probable 1,734,000 5.16 120.1 6.86 287,600 6,695,500 382,500
-------------------------------------------------------------------------- Notes:
1.
Mineral Resources are estimated using a US$760/oz gold price and
US$13/oz silver price. An economic function that includes operating
costs, metallurgical recoveries and royalty costs has been applied.
2.
Rounding as required by reporting guidelines may result in apparent
differences between tonnes, grade and contained metal content.
3. Tonnage and grade measurements are in metric units. Gold ounces are reported as troy ounces.
4. All Mineral Reserves are reported in the Probable category
5.
Mineral Reserves are estimated using a gold price of US$690/oz and
US$11.80/oz silver price and an economic function that includes
operating costs, metallurgical recoveries and royalty costs.
6.
Cut-off grades for Mineral Resources were 1.41g/t gold equivalent for
open pit and 3.5g/t gold equivalent for underground. Gold equivalent
grades for Mineral Resources were based on metal prices of US$760/oz
gold and US$13/oz silver and processing recoveries of 93.7% for gold
and 80.6% for silver.
7. Cut-off grades for Mineral Reserves
were 1.56g/t gold equivalent for open pit and 3.5g/t gold equivalent
for underground. Gold equivalent grades for Mineral Reserves were based
on metal prices of US$690/oz gold and US$11.8/oz silver and processing
recoveries of 93.7% for gold and 80.6% for silver.
8. The
information regarding Mineral Resources and Mineral Reserves is drawn
from the technical report entitled "NI 43-101 Technical Report,
Intrepid Mines Limited, Casposo Project - July 2008" that was filed on
September 16th 2008 by Intrepid under its profile on SEDAR at www.sedar.com.
Information
of a scientific or technical nature in this news release was prepared
under the supervision of Peter J. Doyle, Vice President Exploration and
Business Development of Troy, a "qualified person" under National
Instrument 43-101 - "Standards of Disclosure for Mineral Projects", a
member of the Australasian Institute of Mining and Metallurgy. Mr.
Doyle has sufficient experience, which is relevant to the style of
mineralization and type of deposit under consideration, and to the
activity he is undertaking, to qualify as a "competent person" as
defined in the 2004 edition of the "Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves". Mr. Doyle has
reviewed and approved the information contained in this press release.
For further information regarding the project, including a description
of the quality assurance program, quality control measures, the
geology, samples collected and testing procedures in respect of the
project please refer to the technical report entitled "NI 43-101
Technical Report, Intrepid Mines Limited, Casposo Project - July 2008"
that was filed on SEDAR on September 16th 2008 by Intrepid Mines
Limited and which is available under Intrepid's profile at www.sedar.com.
This
news release contains forward-looking statements. These forward-looking
statements reflect management's current beliefs based on information
currently available to management and are based on what management
believes to be reasonable assumptions. A number of factors could cause
actual results, performance, or achievements to differ materially from
the results expressed or implied in the forward looking statements.
Such factors include, among others, future prices of gold, the actual
results of current production, development and/or exploration
activities, changes in project parameters as plans continue to be
refined, variations in ore grade or recovery rates, plant and/or
equipment failure and delays in obtaining governmental approvals or in
the commencement of operations. |
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