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Press Release #07-15 Western Prospector Group Ltd. ("Western Prospector") and its Mongolian subsidiary Emeelt Mines LLC ("Emeelt") today announced the completion of a Preliminary Economic Assessment Study of a production plan for its 100% owned Gurvanbulag deposit in Mongolia. The Preliminary Economic Assessment report (the "Micon Report") was completed by mineral industry consultants, Micon International Limited ("Micon") of Toronto, Ontario, who based their report on: an independent resource estimate (compliant with NI 43-101) prepared by SRK Consulting (Canada) Inc. ("SRK"), metallurgical testwork conducted by SGS Lakefield Research Limited under the direction of Melis Engineering Ltd., preliminary processing flowsheet developed by Melis Engineering Ltd., and preliminary site selection of tailings storage facilities by Golder Associates Ltd. ("Golder") The Micon Report outlines the preliminary economics of developing an underground mine and surface processing facility with an average throughput of 1,500 tonnes per day to produce annually approximately 2.0 million pounds U3O8 as yellowcake over a project life of 10 years with average operating costs of US$86.50 per tonne milled or US$24/pound U3O8. The Micon Report states that, based on assumptions and parameters (summarized below), the Gurvanbulag deposit cash flow yields an after tax IRR of 35% and NPV of US$241 million, using a discount rate of 10% per year. Micon has recommended continued exploration at Gurvanbulag to identify further resources, infrastructure establishment, securing construction and development permits, on-going environmental baseline studies, and completion of a Full Feasibility Study. The Preliminary Economic Assessment was directed to the classified resource portion of the central or core area of the Gurvanbulag deposit. Additional resource potential, as indicated by unclassified historic Russian C2 resources, will soon be drill-tested around the periphery of the central Gurvanbulag deposit. Western Prospector reported on May 8, 2007 that SRK outlined an indicated resource of 13.6 million pounds U3O8 and an additional inferred resource of 8.6 million pounds U3O8 utilizing a 0.07% U3O8 cut-off based on a long-term price of $47 per pound U3O8 and an internal estimate of potential operating costs for underground mining. The SRK classified resources are tabulated below. http://www.westernprospector.com/i/misc/table01.gif The configuration of the mineralized zones requires the use of flexible and selective mining methods, which can accommodate variability in width and dip of mineralization. Stopes will initially be accessed from existing development on the 260 m level. As mining proceeds, subsequent intermediate access levels will be developed from the internal ramp upward towards the 80 m level. Later in the mine life, the lower mining horizons will be accessed from the 440 m haulage level and intermediate access levels will be developed from the internal ramp, up to the 260 m level. Given the mineralization geometry and presently known resources a mine production rate of 1,500 t/d was selected resulting in a mine life of approximately 10 years. Metallurgical testwork for the Gurvanbulag project was carried out on samples of drill core received in June, 2006. The testwork program included grindability, leaching, liquid/solid separation, solvent extraction, precipitation and tailings preparation. Golder was retained by Western Prospector to provide a preliminary assessment of potential sites for the location of a tailings management facility (TMF) at Gurvanbulag. Western Prospector has provisionally selected a preferred location for the tailings management facility. This is based, principally, on the distance from the Main shaft (1.6 km) and in order for the tailings management facility and the mill to be located within the same watershed. It has been assumed that approximately 50% of the total tailings will be returned to the underground mine as paste backfill. It is proposed that a new road will be constructed to connect the Gurvanbulag site with the town of Choibalsan. The road, approximately 117 km long, is anticipated to follow the route of the power line that is currently under construction. The feasibility study and route design have been completed by the civil engineering firm, Avarga Zam Co. Ltd. of Mongolia. Permanent power supply will be provided by a new 110-kV line from the power station operated by Dornod Energy System LLC (DES) at Choibalsan. The power line is now being constructed under a joint venture agreement executed by Emeelt and XinXin Mining. XinXin, is developing its Ulaan base metals mine 7 km to the east of the Gurvanbulag mine site. In addition, power could be supplied to the soum communities of Bayandun, Dashbalbar and Gurvanzagal, none of which presently is connected to the electrical grid. Accommodation is provided in a new facility that has been constructed 5.5 km south of the mine site. The facilities comprise a 200-person capacity camp that was constructed in mid-2006 by Geomandal Star LLC. ECONOMIC EVALUATION Based on the mineral resources estimated by SRK, Micon has developed a plan to mine and process an average of 1,500 t/d of mineralized material that results in mining all of the presently estimated 5.4 Mt of resources over a project life of about 10 years. Mining by inclined room and pillar with backfill methods is projected to provide a mining recovery of 93% with 5% dilution at zero grade. The proposed on-site processing plant was based on metallurgical test results that yielded 95% recovery utilizing an acid leach system. Pre-production capital cost was estimated at US$229 million. The cumulative operating after-tax net cash flow, assuming a royalty payable of 5%, a tax rate of 25% and a uranium price of US$84/lb U3O8, was US$643 million. Discounted at 10% per year, the net present value was US$241.5 million. The project is sensitive to uranium prices in that a 10% variance in uranium price is expected to yield a 5% variance in the IRR (see cautionary note). The estimates of capital and operating costs are combined in the discounted cash flow evaluation for which a summary of the base case is shown in the table below. Capital and operating costs have been estimated to a level of detail appropriate for a preliminary economic assessment, in this case to an overall level of +/-25%. The economic evaluation is treated on a full project basis, i.e., assuming 100% equity financing and, for the base case, a uranium price of $185/kg U3O8 (equivalent to $84/lb U3O8) has been assumed. http://www.westernprospector.com/i/misc/table02.gif Among the factors assumed in the development of the cash flow model are: - Mining recovery 93%, dilution 5% at zero grade. - Production rate of 1,500 t/d, operating 365 days per year. - Plant recovery 94.9%. - Sunk costs of $81.4 M have been included in the capital write off. - A royalty of 5% of revenue has been assumed. - A tax rate of 25% of taxable income has been assumed. - Analyses are in constant US dollars of mid-2007 value. Based on these assumptions and analyses, the project cash flow yields an IRR of 35% after tax. The NPV at a discount rate of 10%/y is $241 M. The project cash flow is sensitive to uranium price, operating costs and capital costs. As may be expected, the price of uranium is the most sensitive item, followed in turn by capital and then operating costs. The results on IRR and net present value of varying the grade of uranium by 10% and 25% are the same as for the price of uranium. http://www.westernprospector.com/i/misc/table03.gif The results of the base case discounted cash flow analysis of the Gurvanbulag project indicate that, at an IRR of 35% after tax, the project is robust. In common with virtually all mining developments, the project cash flow is most sensitive to revenue, in this case, to the price of uranium and grade of the deposit. The result of reducing either the price of uranium or the mined grade by 25% is an IRR of 22% which also supports the robustness of the project. The estimated grade will be further evaluated through the planned exploration program. CONCLUSIONS AND RECOMMENDATIONS Micon recommends Western Prospector/Emeelt proceed to initiate work on a full feasibility study for the Gurvanbulag project along with recommendations that include; continued exploration at Gurvanbulag and in the surrounding area with the objective of increasing the identified mineral resources and, potentially, increasing the life of a mining and processing operation at Gurvanbulag, and compilation into an updated estimate of mineral resources based on the results of exploration through the second half of 2006 and 2007. It should be noted that the results of full feasibility study of the Gurvanbulag project are likely to differ from the results of this preliminary economic assessment. Accordingly, Western Prospector is now focusing on adding additional resources to the classified resource base at Gurvanbulag through a continuing program of underground sampling, gamma logging of underground drill holes and surface drilling, following which an additional resource estimation will be done in preparation for commencement of a full feasibility study. The Gurvanbulag development schedule is estimated at 30 months from the completion of full feasibility study to initiation of commercial production in late 2010. Qualified Persons: Jane Spooner, M.Sc., P.Geo, of Micon International Limited, and Mani Verma, P.Eng., and Malcolm Buck, P.Eng., both Associate Mining Engineers with Micon International Limited., Bruce Fielder, P.Eng., Principal Process Engineer of Melis Engineering Ltd., Marek Nowak, MA.Sc., P.Eng., Principal Geostatistician with SRK Consulting, and Gerald Harper, Ph.D., P.Geo., Vice-President Exploration and Wayne Roberts, P.Geo., Senior Vice-President of Western Prospector Group Ltd., are the qualified persons (as defined under NI 43-101) on the project and have reviewed the technical information presented in this release. CONFERENCE CALL A conference call will be held, Tuesday, October 16, at 1:00 pm Eastern, 10:00 a.m. Pacific. To participate in the conference call, please dial 416-644-3417 or 800-731-5319. A replay of this conference call will be available for one week starting Tuesday, October 16, at 3:00 pm Eastern or 12:00 pm Pacific. To listen to the replay, please dial 416 640 1917 or 877 289 8525, pass code 21250293#. "Eric Bohren" Eric Bohren President and CEO |
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| aus der Diskussion: | Western Prospector: Gold, Uran und vieles mehr! |
| Autor (Datum des Eintrages): | Ikar (17.10.07 21:02:57) |
| Beitrag: | 25 von 34 (ID:32056609) |
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