DENVER--(BUSINESS WIRE)--
Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL;
TSX: SLR) is pleased to announce that Compania Minera Milpo
S.A.A. (“Milpo”; Lima Stock Exchange: MILPOCI) has
announced its intent to acquire from its parent Votorantim Metais
(“Votorantim”) an interest in Solitario’s Bongará Zinc Project in Peru.
Milpo’s Board of Directors approved the purchase of an interest in
Bongará and another significant zinc project in Brazil from Votorantim.
A combined valuation of US$60 million was placed on the two projects.
Milpo will assume operatorship in the project from Votorantim under its
joint venture agreement with Solitario. Votorantim owns slightly more
than 50% of Milpo’s publically traded shares.
Milpo is the second largest zinc producer in Peru operating three of the
largest underground zinc mines in Peru. In Milpo’s initial filing, the
percentage interest it intends to purchase from Votorantim in each of
the two projects is undisclosed at this time. Additional information
will be provided to the market by Milpo when the transaction is
concluded. From the second half of 2006 to the end of 2013, Votorantim
reported that it has expended approximately US$42.4 million on
exploration and development at Bongará.
Chris Herald, President and CEO of Solitario, stated, “We are delighted
to welcome Milpo to the Bongará project and look forward to working with
their management. Milpo is recognized as a preeminent zinc miner in Peru
and brings a wealth of technical and operational expertise to bear upon
the project. Milpo also maintains a strong balance sheet with
approximately US$412 million in cash. Milpo has indicated that they are
formulating their 2015 Bongará work program. We look forward to
reporting Milpo’s plans to our shareholders when finalized.”
Terms of the Bongará Joint Venture with Votorantim Metais
Currently, Solitario owns 100% of the Bongará project. Since inception
of the joint venture in 2006, Votorantim has funded 100% of project
expenditures. Votorantim (or alternatively, Milpo) can earn up to a 70%
interest in the project by continuing to fund all project expenditures
and committing to place the project into production based upon a
positive feasibility study. After earning 70%, Votorantim has further
agreed to finance Solitario's 30% participating interest for
construction. Solitario will repay the loan facility through 50% of its
net cash flow distributions.
Bongará Resource Estimate Released earlier in 2014
Solitario released its initial NI 43-101 compliant resource estimate for
the high-grade Bongará zinc project on June 23, 2014. Highlights of the
resource estimate are:
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Measured and Indicated Resources total approximately 2.8
million tonnes grading 13.0% zinc; 1.9% lead and 19.3 g/t silver;
or 15.5% zinc equivalent
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Inferred Resources total approximately 9.1 million tonnes grading
10.9% zinc, 1.2% lead and 12.2 g/t silver; or 12.4% zinc equivalent
The Mineral Resource Statement and Technical Report was prepared on
behalf of Solitario by SRK Consulting (U.S.) Inc. (“SRK”), an
independent and internationally recognized mining engineering firm, and
provides a classification of resources in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum Standards on Mineral
Resources and Mineral Reserves: Definitions and Guidelines, November 27,
2010. SRK verified and validated a comprehensive resource model
previously developed by Votorantim. This release has been reviewed for
accuracy by Walter Hunt, Chief Operating Officer of Solitario, a
“qualified person” as that term is defined in NI 43-101.
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Table 1: Mineral Resource Statement for the Bongará Zn-Pb-Ag
Deposit, Amazonas
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Department, Peru, SRK Consulting (U.S.), Inc., June 5, 2014
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Category
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Mass
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Grade
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Contained Metal (millions)
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Zn
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Pb
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Ag
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ZnEq
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Zn
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Pb
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Ag
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ZnEq
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Mt
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%
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%
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g/t
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%
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(lbs)
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(lbs)
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(oz)
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tonnes
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(lbs)
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Measured
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1.43
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13.02
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1.85
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19.3
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15.45
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410.0
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58.3
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0.884
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0.221
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486.5
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Indicated
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1.35
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12.51
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1.71
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17.1
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14.74
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372.6
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50.9
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0.744
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0.199
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438.8
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Measured + Indicated
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2.78
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12.77
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1.78
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18.2
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15.10
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782.5
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109.2
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1.628
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0.420
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925.3
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Inferred
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9.07
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10.87
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1.21
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12.2
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12.44
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2,173.0
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241.5
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3.554
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1.130
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2,487.6
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Notes:
1. Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or any
part of the Mineral Resources estimated will be converted into Mineral
Reserves;
2. Mineral resources are reported to a Net Smelter Return
zinc-equivalent (ZnEq%) cut-off grade based on metal price assumptions*,
metallurgical recovery assumptions**, mining costs, processing costs,
general and administrative (G&A) costs, and NSR factors***. Mining
costs, processing, G&A, and transportation costs total US$51.30/t. (i)
*Metal price assumptions considered for the calculation of metal
equivalent grades are: Zinc (US$/lb 0.95), Lead (US$/lb 0.95) and Silver
(US$/oz 20.00), (ii) **Cut-off grade calculations assume variable
metallurgical recoveries as a function of grade and relative metal
distribution. Average metallurgical recoveries for sulfide and oxide
respectively are: Zinc (93.1%, 73%), Lead (84.8, 0%) and Silver (55.6%,
0%), (iii) *** NSR factors for calculating cutoff grades were: ZnEq% =
Zn% * 1 + Pb% * 0.74 + Ag g/t * 0.02
3. Resulting cutoff grades used in this resource statement were 4.1%
ZnEq for sulfide, 5.0% ZnEq for oxide, and 4.5% ZnEq for mixed material
types.
4. Zinc equivalency for reporting in situ contained metal resources
above was calculated using: ZnEq (%) = Zn (%) + 1.0 * PB (%) + 0.03 * Ag
(g/t).
5. Density was calculated based on material types and metal grades. The
average density in the mineralized zone was 2.91 g/cm3 as a
function of the zinc and lead sulfide mineral content.
6. Mineral Resources as reported are undiluted and mineral resource
tonnage and contained metal have been rounded to reflect the precision
of the estimate, and numbers may not add due to rounding.
7. Three types of mineralization are differentiated: sulfide, mixed and
oxide. Sulfide mineralization accounts for approximately 63% of the
resource, oxide 28% and mixed resources making up the remaining 9%.
Cautionary Note to U.S. Investors
concerning estimates of Resources: This news release uses the terms
“Measured, Indicated and Inferred Resources.” The Company advises U.S.
investors that while these terms are recognized and required by Canadian
regulations, the SEC does not recognize the terms. U.S. investors
are cautioned not to assume that any part or all of Measured or
Indicated Mineral Resources will ever be converted into Reserves. Inferred
Resources have a great amount of uncertainty as to their existence, and
great uncertainty as to their 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. Under Canadian rules, estimates
of Inferred Mineral Resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that any part or all of a measured, indicated
or inferred resource exists, or is economically or legally minable.
About Votorantim and Milpo
Votorantim is a privately held Brazilian business conglomerate that is a
leader in every market segment in which it operates, including cement,
pulp and paper, metals, chemicals, orange juice, and finance. The metals
business division accounted for approximately one third of Votorantim’s
consolidated revenues from production of zinc, nickel, steel and
aluminum. Votorantim is the world's fifth largest primary zinc producer
with three operating zinc smelters, two operating zinc mines, and also
has operations in the United States and China. It owns the Cajamarquilla
zinc smelter and is the majority shareholder of Milpo, both located in
Peru. Milpo is a publically listed company that operates three
significant underground zinc mines in Peru.
About Solitario
Solitario is a precious and base metal exploration and royalty company.
Solitario’s main focus is on permitting, financing and constructing the
Mt. Hamilton gold project in Nevada. Solitario controls an 80% interest
in Mt. Hamilton. Besides Solitario’s joint venture with Votorantim,
Solitario also has a joint venture with Anglo Platinum on its Pedra
Branca platinum-palladium project in Brazil. Additional information
about Solitario is available at www.solitarioxr.com.
Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking statements within the
meaning of the U.S. Securities Act of 1933 and the U.S. Securities
Exchange Act of 1934, and as defined in the United States Private
Securities Litigation Reform Act of 1995 (and the equivalent under
Canadian securities laws), that are intended to be covered by the
safe harbor created by such sections. Forward-looking statements are
statements that are not historical fact. They are based on the beliefs,
estimates and opinions of the Company's management on the date the
statements are made and address activities, events or developments that
Solitario expects or anticipates will or may occur in the future, and
are based on current expectations and assumptions. Forward-looking
statements involve a number of risks and uncertainties. Consequently,
there can be no assurances that such statements will prove to be
accurate and actual results and future events could differ materially
from those anticipated in such statements. Such forward-looking
statements include, without limitation, statements regarding the
Company’s expectation of the projected timing and outcome of engineering
studies; expectations regarding the receipt of all necessary permits and
approvals to implement a mining plan, if any, at Bongará; the potential
for confirming, upgrading and expanding zinc, lead and silver
mineralized material at Bongará; future operating and capital cost
estimates may indicate that the stated resources may not be economic;
estimates of zinc, lead and silver grades provided are not diluted
mining grades and the predicted or actual mining grade could be
substantially lower; estimates of recovery rates for the three types of
mineralization, sulfide, oxide and mixed could be lower than estimated
for establishing the cutoff grade; and other statements that are
not historical facts; risks associated with our funding partner’s
(Votorantim Metais and/or Milpo) ability to finance continued
development and potential construction of the Bongará project. Important
factors that could cause actual results to differ materially from those
in the forward-looking statements include, among others, risks relating
to fluctuations in the price of zinc; the inherently hazardous nature of
mining-related activities; uncertainties concerning reserve and resource
estimates; uncertainties relating to obtaining approvals and permits
from governmental regulatory authorities and country risks of operations
outside of the United States; the possibility that environmental laws
and regulations will change over time and become even more restrictive;
and availability and timing of capital for financing the Company’s
exploration and development activities, including uncertainty of being
able to raise capital on favorable terms or at all; as well as those
factors discussed in Solitario’s filings with the U.S. Securities and
Exchange Commission (the “SEC”) including Solitario’s latest
Annual Report on Form 10-K and its other SEC filings (and Canadian
filings) including, without limitation, its latest Quarterly Report on
Form 10-Q. The Company does not intend to publicly update any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as may be required under applicable
securities laws.