First Majestic Silver Corp .: NI 43-101 Compliant Technical Report & Feasibility Study for Del Toro
23.05.2012/43/101 - FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or "First Majestic") is pleased to announce a new NI XNUMX-XNUMX Technical Report (FB) and Pre-Feasibility Study (VMS) for the Del Toro Silver Mine.
ESSENTIAL RESULTS
• Measured & Indicated Resource Silver Equivalent increased 186% to 74,5 million ounces
• Increase of Inferred Resources Silver equivalent by 79% to 79,0 million ounces
• Total production will reach 2014 million ounces silver equivalent by 9,7
• Total operating costs are estimated to be 34,96 $ per ton and cash costs 7,32 $ per ounce of silver (base by-product)
• net after tax (5% discount) = 147,1 million US $ assuming a silver price of 25 US $
• Internal rate of return (IRR) is 43% on repayment 2,5 years from completion
• Mine life (LOM) is 6,5 years, according to current estimates; taking into account a dilution of 12% by the underground mining and a metallurgical silver yield of 77% for sulphide or 81% for oxide
• Investment needs over three years total 124,2 million $ including 5% reserves
• The Del Toro silver mine is entirely First Majestic Silver, with no fees
The new NI 43-101 compliant FB and VMS will complete all exploration and development to 31. March 2012 (effective date). These estimates include all completed work to date, including diamond drilling in 117 holes over 35.230 meters and total 7.133 meters. The analysis results from 33 holes were not available until the cut-off date and were not included in this report. Currently, seven drill rigs are in use on site. The new resource estimate at the reporting date is 74,5 million ounces of silver equivalent in measured and indicated resources (plus 186% over the 2008 estimate) plus 79,0 million ounces in inferred resources (up 79% from previous estimate).
With the construction of a new dual-system processing plant and 4.000 daily tonnes capacity, 2011 was launched in April. From a current perspective, the construction is going according to plan. The first production phase should be in 4. Start quarter 2012. In the VMS, the development of the production operation is planned as follows: Phase 1 (beginning in October 2012 until the first half 2013): only sulphide ore in the flotation cycle with a throughput of 1.000 tonnes per day is processed; Phase 2 (second half 2013 to 2017): cyanide leaching of oxide ore with a throughput of 2.000 daily tonnes plus sulphide ore by flotation with a throughput of 2.000 daily tonnes; Total throughput: 4.000 daily tonnes; Phase 3 (until year 2018): the processing is limited to sulphide ore by flotation with a throughput of 4.000 tonnes per day.
By the year 2014, the total throughput (details are described in the table below) will reach a production level of approximately 9,7 million ounces of silver equivalent; this equates to 6,7 million ounces of pure silver per year plus approximately 39,4 million pounds of lead and 39,9 million pounds of zinc. In the present report, the lifetime of the mine (LOM) is calculated as 6,5 years; taking into account dilution by mining and a metallurgical silver yield of 77% for sulphide or 81% for oxide, as well as a lead and zinc yield of sulphide ore of 50% and 40%, respectively.
Keith Neumeyer, CEO and President of First Majestic Silver, said, "Given the significant progress made at Del Toro, it is clear that First Majestic is well on its way to becoming the next big silver producer. Our biggest challenge at Del Toro is that we are always one step ahead with our coverage of the rapid growth of underground resources. In the course of further drilling and resource assessments, it is expected that it will be necessary to submit a further technical report by the end of this year. Following the launch of Del Toro in the second half of the year and the upcoming acquisition of Silvermex, First Majestic has a total of five production facilities with an annual silver production in excess of ten million ounces, and will continue to expand its production capacity to more than 2014 million ounces by 15. We continue to focus on the continuous expansion of production while reducing costs; so we want to live up to our philosophy, which is to keep our costs within the first quartile of mid-sized and leading competitors. As always, I sincerely thank our entire First Majestic team for their outstanding performance. "
Total resources reached a value of 74,5 million ounces of silver equivalent of measured and indicated resources as well as an additional 79,0 million ounces of silver equivalent of inferred resources at the reporting date. Further details can be found in the table below.
The following three tables of summarized values are taken from the full NI 43-101 Technical Report and Del Toro Silver Mine Pre-Feasibility Study conducted by Pincock Allan & Holt of Lakewood, Colorado (PAH). Shareholders and interested parties are encouraged to study the positive report in full. The report was posted on SEDAR (www.sedar.com) and on the company's website at www.firstmajestic.com.
In-situ mineral resources via 31. March 2012
According to PAH, or as described in the report, many promising mineralization and alteration zones on the Del Toro property have not yet been explored sufficiently. These include the previously known San Juan, Perseverancia and San Nicolas zones as well as future exploration activities, such as the extension of Perseverancia to the deep, the extension of the San Nicolas vein to the north-east, the newly acquired mine Dolores, as well as the structures Lourdes, Las Cotorras, La Nueva, India, Tayoltita, El Huitrón and La Verdiosa.
Estimated capital expenditure
Schedule production over mine life
For the present pre-feasibility study, the measured and indicated resources were treated as reserves. Therefore, the estimated mineral reserves after deducting 12% of the ore remaining in the columns and subsequently adding 5% of dilution by mining and subtracting a zinc body that is being defined are also included. As a result of these changes, measured and indicated resources will decrease from 9,4 million tons or 74,5 million ounces to 7,4 million tons, which equates to 59,7 million ounces of silver equivalent.
Current construction program
The mining and processing capacity in mine and processing plant is estimated at 4.000 tonnes per day (330 working days per year). At full capacity, the production capacity is expected to be about 660.000 tonnes of sulphide or 660.000 tonnes of oxide. This production target is to be reached by 2014; the expansion phase begins at the end of 2012 and continues until the beginning of 2014.
For the development of the Del Toro Mine and the expansion of the first phase of production up to a throughput of 1.000 tonnes per day, 2012 still estimates an additional investment requirement of 47,8 million $. The expansion of full operation, with a throughput of 4.000 tonnes per day (1.320.000 tonnes annually), will result in an investment of approximately $ 124,2 million, consisting of: 38,5 $ million for the mining operation, 76,6 $ million for the processing plant, 3,2 million $ for indirect costs and 5,9 million for reserves. Of the $ 124,2 million investment, approximately $ 9,0 million (without reserves) will be budgeted for the development and equipment of the San Francisco main shaft and ancillary facilities, including the underground crusher. Maintenance costs over the life of the mine are estimated at approximately $ 17,48 million. Of the 124,2 $ million budgeted, 2012 (up to 31, March 2012) has invested 10,7 million dollars to date. The starting 1. April 2012 to invest the balance of the total budget of 124,2 million $ is to be divided as follows: 47,8 million $ until the end of the year 2012, 61,7 million $ in the year 2013 and the remaining 4,0 million $ in the year 2014. As expected, the current cash flow and available cash will be sufficient to make these investments.
Operating costs are estimated to be 34,97 US $ per tonne over the life of the mine, including cash costs of 7,32 $ per ounce silver (by-product base), including costs for smelting and refining. The operating costs of the mine are estimated at an average of 19,88 US $ per ton, the operating costs of the processing plant are budgeted at 13,56 US $ per tonne (indirect costs with 1,56 US $ per tonne). Mine development accounts for a very small part of the operating costs, as most of the development of the Del Toro Mine is calculated over its lifetime. The development of the mine, the construction of the mill and processing plant for the extraction of sulphides and oxides and the construction of ancillary facilities are currently underway. The processing plant is expected to go into operation with a throughput of 1.000 tonnes per day (4 quarter 2012) and to increase to 2014 tonnes per day by mid-4.
Leonel López, CPG, PG, an employee of Pincock Allen & Holt, has reviewed the contents of this press release for the company as an independent qualified person under National Instrument 43-101 and is responsible for preparing the technical report. He is not dependent on the company.
First Majestic is a silver manufacturing company focused on silver production in Mexico, and consistently focuses its business strategy on becoming a leading silver producer by unlocking its existing commodity licenses and acquiring additional commodity concessions and achieving its growth targets.
FURTHER INFORMATION is available from [email protected] or on our website at www.firstmajestic.com or our toll-free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
"Draft"
Keith Neumeyer, President & CEO
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SPECIAL NOTE ON FUTURE-ORIENTED INFORMATION
This press release contains certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable Canadian securities laws. In this document, terms such as "anticipate," "believe," "estimate," "expect," "objective," "plan," "forecast," "potentially," "plan," and similar words or phrases will identify forward-looking statements Information marked. These forward-looking statements or information include but are not limited to: the price of silver and other metals; the accuracy of mineral reserve and mineral resource estimates, as well as estimates of future production and production costs on our properties; the estimated production rates for silver and other payable metals from our production; the estimated cost of developing our projects; Laws, regulations, and governmental plans that affect our operations (including, but not limited to, Mexican legislation, which currently imposes stringent restrictions on mining); the receipt of the necessary permits, licenses and positive decisions from the governmental authorities; and unrestricted access to the necessary infrastructure to carry out our activities as planned (including electricity and water supplies and access to land or road links).
These statements reflect the Company 's current view of future events and are necessarily based on a number of assumptions and estimates believed to be realistic by the Company but involve considerable uncertainties and contingencies in the Company' s business, economic environment, and performance Competition and the political and social situation. Many known and unknown factors could cause actual results, performance or achievements to be materially different from the results, performance or achievements that may be mentioned, directly or indirectly, in such forward-looking statements or information. The Company has made assumptions and estimates that are based on or related to these factors in many respects. These factors include, but are not limited to: fluctuations in spot and forward prices for silver, gold, base metals or certain other commodities (such as natural gas, oil and electricity); Currency fluctuations (eg between the Canadian dollar or the Mexican peso and the US dollar); Changes in national and regional governance, laws, taxation systems, controls, regulations and political and economic developments in Canada and Mexico; operational or technical difficulties associated with mining or development activities; Risks and hazards associated with the exploration, development and production of raw materials (including environmental hazards, industrial accidents, unusual or unexpected formations, pressure developments, cave formations and flooding); Risks related to the creditworthiness or financial condition of suppliers, processors and other business partners of the company; insufficient insurance to cover risks and dangers; legal restrictions on mining, such as the current regulations in Mexico; Employee matters; the relationship to the regional population or their claims; the availability or increase in the cost of labor and equipment required for dismantling; the speculative nature of commodity exploration and development, including risks in obtaining the necessary licenses and permits from government agencies; a decrease in the tonnage or ore content of the mineral reserves resulting from the mining activity on the properties; Concession claims of the company; and any of the factors listed in the section entitled "Risk Factors" or "Risks Associated with First Majestic's Business" in the Company's Annual Report.
Investors are cautioned not to rely unconditionally on forward-looking statements or information. The Company has endeavored to identify important factors that could cause actual results to differ materially. However, other factors may cause results not to be as expected, estimated or intended. The Company has no intention or obligation to adjust these forward looking statements or information to reflect changed assumptions or circumstances or other events that may affect such statements or information except as may be made in the relevant statements Laws required.
