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🕐26.05.10 - 15:10 Uhr
Invicta Project Optimized Feasibility Study Audit Completed
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Add to your address book or safe list to ensure delivery of email blasts (click for instructions) Invicta Project Optimized Feasibility Study Audit Completed Andean American Mining Corp. (the Company) (TSX.V:AAG) (FWB:AQN) is pleased to announce that the audit of the Optimized Feasibility Study for the Invicta Project being conducted by the Lokhorst Group Ventures Inc. has been completed and will be filed on SEDAR within the next 45 days. Guy Lokhorst, P.Eng. Qualified Person, of the Lokhorst Group, reviewed the mining methodology, including the life of mine, and Deepak Malhotra, PhD., MS in Metallurgical Engineering and PhD. in Mineral Economics, Qualified Person, of Resource Development Inc., was retained by the Company to review the metallurgy for the project and develop the finalized process flow diagram. The Optimized Feasibility Study has made fundamental metallurgical improvements in comparison to the original Feasibility Study of June, 2009 as indicated in the tables below: Estimated Metal Production Recovered Optimized Original Improvement Au/oz 489,656 500,721 minus 2.2% Ag/oz 3,861,772 3,215,052 plus 20% Cu/lb 66,861,826 41,471,840 plus 61% Pb/lb 52,627,206 14,299,013 plus 268% Zn/lb 41,205,715 5,591,834 plus 637% Estimated Metal Recoveries Optimized Original Change Au 91% 93.2% minus 2.3% Ag 82% 68.3% plus 20% Cu 75% 46.3% plus 62% Pb 80% 21.9% plus 265% Zn 80% 10.8% plus 640%Chairman John Huguet states: �These improvements strengthen an already financially robust model and move us closer to completion of our major financing for Invicta. There is still much to learn about the geology at Invicta. Major structural reviews will begin in June 2010. At this time, we are tracking on an aggressive schedule for third quarter funding given the amount of job quality work still in front of us. The project team has grown and continues to grow in the environmental and community relations areas. We are continuing a 3 tonne locked cycle pilot test with the entire flow sheet. The production of a finished Independent Engineers technical report awaits those results, which should be accomplished this quarter.� Financial Analysis Highlights: Average Annual Production of 97,931 Oz Gold and Average Annual Gold Equivalent Production of 160,857 Oz2 LOM Cash Cost Per Oz Gold2 On a co-product basis: $451.38 US; On a gold-equivalent basis: $274.80 US; On a by-product basis ($126.91) US 5 Year AVG Annual Free Cash Flow of $65,273,398 US3 Net Present Value using an 8% discount rate of $265,057,8083 US Capital Expenditures of $65.3M including: $49M project costs, $9M in refundable IGV taxes and 7M in contingency funds; Mine life based on Probable Reserves of 7.8M tonnes from the Measured and Indicated resources. Not included were Inferred resources of 14.2M tonnes, or a high grade zone currently being sampled and drilled for NI 43-101 compliance; A drill program will be a part of the ongoing development during the construction period; Operating costs of $28.31 US/tonne; Updated resource estimate and improved metallurgical process; Production rates of 3,000 tpd in year one, 4,000 tpd in year 2 and 5,000 tpd in years 3, 4 and 5. The Company intends to hedge base metal production in order to fully gear the Invicta project towards upside movements in the price of gold and silver, while at the same time ensuring cash flow on an operating basis to protect the project loan repayment schedule.The Invicta Project Diamond drill programs have demonstrated a measured and indicated resource of 10.735 million tonnes. The mine plan is based on a 5 year program to produce 7.8 million tonnes of mineable ore in the probable reserves category. With processing, 489,600 ounces of gold, 3,861,800 ounces of silver, 66,862,000 pounds of copper, 52,627,000 pounds of lead, and 41,205,700 pounds of zinc will be recovered. When in production, a drill program will be initiated to upgrade the bulk of inferred resources to an indicated category in the Atenea, Pucamina and Dany mineralized structures. It is important to mention that in close proximity to the Atenea System, there are several other mineralized structures that have yet to be tested by drilling. These include Yurac Punta, Azulmina, Zone 8 and Flor de Loto. This could potentially extend the life of the project by several years. Project Free Cash Flow Sensitivity analysis (computed as after tax income + depreciation and amortization + IGV tax reimbursement) 1: Gold Price Total FCF 5 YR AVG $900 $264,691,245 $52,938,249 $1,000 $295,525,040 $59,105,008 $1,100 $326,366,991 $65,273,398 $1,200 $357,185,186 $71,437,037Project NPV Sensitivity Analysis1: Gold Price 8.00% 10.00% $900 $215,191,049 $203,542,333 $1,000 $249,917,929 $227,112,434 $1,100 $265,057,808 $250,688,663 $1,200 $289,974,787 $274,246,114Project Revenue Distribution By Commodity3: Au Ag Cu Pb Zn Revenue % 65.5% 5.9% 20.3% 4.5% 3.8% The following price deck was used: Silver $12.50/oz, Copper $2.50/lb, Lead $0.70/lb, Zinc $0.75/lb. The following price deck was used: Gold $900/oz, Silver $12.50/oz, Copper $2.50/lb, Lead $0.70/lb, Zinc $0.75/lb. The following price deck was used: Gold $1,100/oz, Silver $12.50/oz, Copper $2.50/lb, Lead $0.70/lb, Zinc $0.75/lb.Mineral Resources: Victor A. Jaramillo, M.Sc.(A), P.Geo. of Discover Geological Consultants Inc., issued the Invicta Property Updated Technical Report, on November 20, 2009 and filed it with SEDAR as a NI 43-101 Technical Report on December 10, 2009. Jamarillo�s updated report included data from four additional diamond drill holes and underground sampling from a new crosscut and is the basis for his updated measured and indicated resource estimate of 10,735,000 tonnes grading 2.05 g/t Au, 16.02 g/t Ag, 0.43% Cu, 0.32% Pb, and 0.30% Zn. Inferred resources include 14,226,000 tonnes grading 0.67 g/t Au, 11.20 g/t Ag, 0.36% Cu, 0.24% Pb, and 0.15% Zn. Reserves and Life of Mine: The measured and indicated resources of 7.8 million tonnes, placed in the probable reserve category by Guy Lokhorst, P.Eng., have an average grade of 2.14 g/t Au, 18.76 g/t Ag, 0.52% Cu, 0.38% Pb and 0.30% Zn. The optimum production rate to be mined has been determined to vary between 3,000 tpd and 5,000 tpd. The production rate for Year 1 will be 3,000 tpd, for Year 2 it will be 4,000 tpd, for Years 3 through 5 it will be 5,000 tpd. Therefore the life of mine (LOM) at these mining rates will be 5 years. MINCONSULT consultancy prepared a mining plan (development, preparation and exploitation) to satisfy this schedule, which consists of a detailed plan for the first 18 months and a general plan for the five years production. Guy Lokhorst, P. Eng., the Senior Mining Engineer at The Lokhorst Group, is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the audit of the Optimized Feasibility Study. Deepak Malhotra, PhD., MS in Metallurgical Engineering and PhD in Mineral Economics, is an Independent Qualified Person as defined by National Instrument 43-101 and has reviewed the metallurgical studies for the Optimized Feasibility Report. Leslie F. Tarnai, P. Eng., General Manager of Engineering for Invicta Mining Corp., is a Qualified Person as defined by National Instrument 43-101 and is responsible for the Optimized Feasibility Study. Victor Jarmillo, P. Geo., of Discover Geological Consultants Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the resource estimates. This news release has been prepared under the supervision of Leslie Tarnai, P. Eng. Qualified Person. On behalf of Andean American Mining Corp., �John Huguet� Andean American Mining Corp. (TSX.V:AAG) (FWB:AQN) is an international mining and exploration company actively pursuing precious and base metal opportunities in Peru. The company currently has two key assets: the Invicta gold-silver-copper feasibility stage project and 60% of Sinchao Metals Corp. (TSX.V:SMZ), owner of the Sinchao polymetallic mineralization project. For further information, visit This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) ("forward-looking statements"). Such forward-looking statements may include the Companys plans for its mineral projects, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Companys operations in a foreign jurisdiction, uncertainty of production and costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Companys Financial Statements, Management Discussion and Analysis and Material Change Reports filed with the Canadian Securities Administrators and available at This document uses the terms "measured resources", indicated resources and inferred resources. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, inferred resources have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Click Here for a Free Real-time Stock Quote on TSX-V: AAG
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