DAILY NEWS Nov 29, 2012 3:57 PM - 0 comments

GOLD: Minera IRL feasibility promising for Ollachea project

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2012-11-29

PERU – Minera IRL of Toronto and London, U.K., has completed the definitive feasibility study for its Ollachea gold project in the Puno district. Using a gold price of US$1,300 per ounce, the net present value (7%) is US$264 million (pre-tax) and US$155 million (after tax). The project has an internal rate of return of 29.2% (pre-tax) and 22.1% (after tax). Life-of-mine cash operating cost is estimated to be US$499 per ounce.

The Ollachea project has a 43-101-compliant indicated resource of 10.6 million tonnes at 4.0 g/t Au with 1.4 million contained oz. The probable reserve sits at 9.3 million tonnes grading 3.4 g/t Au containing 1.0 million oz.

Pre-production capital costs of US$177.5 million will be needed to develop an underground mine and mill with a 1.2-km-long tunnel between them. Longhole open stoping with paste backfill, and mining will begin in early 2015, ramping up to 1.1 million t/y by mid-2016. The processing plant will include conventional crushing, grinding, gravity concentration and carbon-in-leach technology. Gold recovery is anticipated to be 91%. At full production the project will produce 113,000 oz of gold annually.

Minera IRL plans to submit the environmental impact assessment by the end of this year. It is also investigating financing options and an early beginning for detailed engineering.

A 3-D model of the Ollachea deposit is posted at Minera-IRL.com.



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