POLYMETALLIC STUDY: Small mine possible near Revelstoke

BRITISH COLUMBIA – Huakan International Mining of Vancouver, owner of the J&L underground gold-silver-lead-zinc project near Revelstoke, has received a positive preliminary economic assessment suggesting a new mine might be developed at the site. The base case posits metal prices of US$1,320/of for gold, US$22/oz for silver, US$0.98/lb for zinc and US$0.94/lb for lead.

The PEA looks at a 1,500-t/d bulk mining and milling operation with a life of nine years. Huakan says that the J&L project has a potential net cash flow of $751 million and a net present value (discounted 8%) of $202 million. Initial capital expenditures would be $264 million and sustaining capital an additional $35 million. Payback would take 4.6 years (undiscounted) or 5.9 years (discounted 8%).

The mine plan developed by Micon includes 1.09 million tonnes of measured resources at an average grade of 6.32 g/t Au, 65.91 g/t Ag, 4.16% Zn, and 2.28% Pb; 1.05 million tonnes of indicated resources at an average grade of 7.10 g/t Au, 66.08 g/t Ag, 3.94% Zn, and 2.04% Pb; and 2.76 million tonnes from inferred mineral resources at an average grade of 6.20 g/t Au, 72.43 g/t Ag, 3.24% Zn, and 2.22% Pb. The mill would have a conventional flowsheet incorporating crushing, heavy media separation, grinding and two flotation stages.

Over the life of the mine, Huakan could recover 727,000 oz of gold and 1.0 million oz of silver in doré (accounting for 61% of net revenue). A silver containing lead concentrate and zinc by-products would also be sold.

Additional information is available at HuakanMining.com.