PAN AMERICAN
SILVER AND ORKO SILVER RELEASE POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR LA
PRECIOSA PROJECT
Vancouver,
British Columbia � August 11, 2011 - Pan American Silver Corp. (PAAS: NASDAQ; PAA:
TSX) (�Pan American�) and Orko Silver Corp. (OK:TSX.V) (�Orko�) are pleased to report the positive results of a
Preliminary Economic Assessment (the �PEA� or the �Assessment�) for the La Preciosa Project (the �Project� or �La Preciosa�),
located in the State of Durango, M�xico.�
Pan American and Orko are advancing the
Project under a joint venture agreement by virtue of which Pan American can
earn a 55% direct interest in the Project by bringing La Preciosa
into production.
The
PEA is preliminary in nature, in that it includes Inferred Mineral Resources
that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as
Mineral Reserves.� There is no certainty
that the PEA will be realized.
Highlights (all estimates are for 100% of the Project)
�
Conventional surface and
underground mining of 18 variably-oriented distinct vein structures.
�
Estimated average annual
production of 6.8 million ounces of silver and 11,800 ounces of gold at a cash
cost (1) of $11.84 per ounce of silver, net of by-product credits.
�
Mine life of 12 years.
�
Pre-production capital and
development costs of approximately $270 million.
�
After-tax net present value at a
5% discount rate of $315 million (assuming prices of $25.00/oz
silver and $1,250/oz gold).
�
The Project generates a 24.3% IRR
assuming the above metal prices.
�
5,000-tonnes-per-day conventional
mill and cyanide leaching plant producing a silver-gold dor�.
(1) Cash cost per payable ounce of silver is a
non-GAAP measure.� In addition to cost of
sales, cash cost per ounce is a useful and complementary benchmark that
investors use to evaluate performance and ability to generate cash flow and is
well understood and widely reported in the silver mining industry.
However, cash cost per ounce does not have a standardized meaning prescribed by
Canadian GAAP as an indicator of performance.
Commenting
on the Assessment, Mr. Geoff Burns, President and CEO of Pan American,
said: �La Preciosa is
a very interesting Project, with a solid silver production profile, long mine
life and it�s located in a good mining jurisdiction, less than an hour�s drive
from our existing Mexican administration offices.� At the PEA�s long-term silver price the
economics are very compelling; at current silver prices the Project is
extremely robust.� We will be moving
forward aggressively to complete a Feasibility Study and to position ourselves
for a construction decision in the first half of 2012.�
Mr. Gary Cope,
President and CEO of Orko commented: �As we get closer to the Feasibility Study due by April 2012, we expect
that the conservative estimates in the Preliminary Economic Assessment
will demonstrate significant upside potential as questions and answers relating
to mining methods and resources are refined.� I am confident about the success of the
project which at metal prices of $38.00/oz silver and
$1,600/oz gold has a net present value of over $900
million and generates an internal rate of return of 52.7% with a payback period
of less than 2 years.��
The
PEA was prepared by Allan Earl, F.AusIMM, of Snowden
Mining Industry Consultants, Michael Stewart, M.AIG of
Quantitative Group, Joshua Snider, P.E. and Thomas Drielick,
P.E. both of M3 Engineering & Technology Corp., and Gary Hawthorn, P.Eng. of Westcoast
Mineral Testing, Inc.
Mineral
Resource Estimate
A
total of 18 variably oriented epithermal quartz veins and vein breccia systems
have demonstrated sufficient geological continuity for estimation of Mineral
Resources.� The Mineral Resource estimate
was updated with a new geological interpretation based on the results of 667 drillholes available at the end of October 2010.� The drillholes are
mostly arranged on an initial grid of 100 m by 100 m over almost the entire
deposit and infilled in areas to 100 m by 50 m and in
some areas to 50 m by 50 m.
The
estimated Mineral Resource contains 113 million ounces of silver
classified as Indicated Mineral Resources and a further 46 million ounces of
silver classified as Inferred Mineral Resources. In addition, the deposit
contains over 222,000 ounces of gold classified as Indicated Mineral Resources
and 83,000 ounces of gold classified as Inferred Mineral Resources.
�
A
number of significant changes to the Mineral Resource estimate have taken place
since the previous Mineral Resource estimate reported in March, 2009, including
a 50% increase in the number of available drillholes,
updated geological interpretations, consideration for likely minimum mining
width requirements, mining dilution, an alternate resource estimation
methodology, and different cut-off grades for resource reporting based on
different metal prices, metallurgical recoveries, mining methods, and operating
costs.
In comparing the Mineral Resource
estimate disclosed in this release to the 2009 Mineral Resource estimate, at a
100 gpt Ag cut-off grade, this estimate represents a
45% increase in tonnes, a 17% decrease in silver grade, a 20% increase in
contained silver ounces, a 14% increase in gold grade, and a 65% increase in
contained gold ounces.
The following table summarizes
the current Mineral Resource estimate for the Project:
La Preciosa Project
Mineral Resource Estimate � effective June 2011(1)
|
Mining method
|
Classification
|
Cut-off grade Silver (gpt)
(2)
|
Tonnes� (millions)
|
Silver� (gpt)
|
Silver� (million�
ounces)
|
Gold
�(gpt)
|
Gold (000�s� ounces)
|
Silver equivalent3 (gpt)
|
Silver equivalent (million ounces)
|
Open pit
|
Indicated
|
35
|
10.9
|
129
|
45
|
0.19
|
66
|
139
|
49
|
Open pit
|
Inferred
|
35
|
7.6
|
74
|
18
|
0.13
|
31
|
81
|
20
|
Underground
|
Indicated
|
85
|
13.9
|
152
|
68
|
0.35
|
156
|
170
|
76
|
Underground
|
Inferred
|
85
|
7.6
|
117
|
28
|
0.21
|
52
|
128
|
31
|
Total
|
Indicated
|
|
24.8
|
142
|
113
|
0.28
|
222
|
156
|
124
|
|
Inferred
|
|
15.2
|
96
|
46
|
0.17
|
83
|
105
|
51
|
(1) Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.� No
Mineral Reserves have been estimated.�
Mineral Resources have accounted for minimum mining width and planned
mining dilution.
The estimate of Mineral Resources may be
materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues, but no such issues have
been identified at this time.
Tonnes, grades, and ounces have been rounded
and this may have resulted in minor discrepancies in the totals.
The division between open pit and underground
resources is set on a horizontal level at the 1920 m elevation, which is
considered close to optimum at the metal prices and operating costs assumed
in this Assessment
(2) Cut-off grades are based on operating cost estimates and metal
prices of $25/oz silver and $1,250/oz gold. Metal prices are based on a weighted average of
historical three year average daily silver prices and a two year future price
forecast.
(3) Silver equivalent grade values assume a gold
to silver ratio of 50 to 1 based on the assumed metal prices. The
metallurgical recoveries and refining charges are assumed to be the same for
silver and gold for the purposes of the equivalence calculation only.
|
|
|
|
|
|
|
|
|
|
|
|
Production,
Infrastructure and Processing
The
Assessment estimates that a total of 16.6 million tonnes of ore classified as
Indicated Mineral Resources and 5.6 million tonnes of ore classified as
Inferred Mineral Resources will be mined at an overall average grade of
137 gpt silver and 0.26 gpt
gold. Mining methods have been selected for each vein based on the
thickness and dip of each vein. For each mining method selected, there are
assumptions with respect to mining costs, minimum mining height, and mining
recovery. The selected mining methods and other assumptions may change during
the course of future studies as more data regarding vein geometry, geotechnical
stability, and other mining parameters is gathered. The deposit will be
extracted using both open pit and underground mining.� Open pit mining will be undertaken using
conventional truck and shovel methods and underground mining will be primarily
by room and pillar, with backfill as required for shallow dipping veins, along
with some shrinkage stoping for steeply dipping
veins.� The optimum mine plan includes
three open pits producing a nominal 2,000 tonnes of ore per day at an
average strip ratio of 15:1 and an underground mine producing a nominal 3,000
tonnes of ore per day. As a consequence of increased knowledge of the
deposit as mining progresses, actual mining may result in reduced mine dilution
and costs and possible improvements in mining recoveries in excess of those
that have been assumed in the PEA.�
The
Project is located 84 km by road northeast of the city of Durango.� The PEA anticipates constructing a new
9.7 km long road to reduce the travel time to access the site from
Durango.� The water required to run the
processing plant is expected to be sourced from a new
water well potentially located 7.2 km to the east of the Project. Energy
for the Project is expected to be supplied by a proposed 41 km long power line
leading to a sub-station located northwest of the Project.
Environmental
baseline data has been collected for a full year during 2010 and 2011 to define
the current conditions in and around the proposed mine site and will be used to
produce the Environmental Impact Assessment (�EIA�), which will be submitted as
required for permitting.� It is
anticipated that this EIA will be presented to the Mexican government for
approval once the necessary surface rights are secured, likely within the next six
to nine months.� It is believed that the
necessary permits could be obtained to allow for the start of construction in
the second half of 2012.�
The
PEA envisages the construction of a 5,000 tonne-per-day plant comprising
primary crushing, grinding, cyanide leaching, followed by cyanide neutralisation,
Merrill Crowe processing, refining, and conventional pulp tailings disposal
facilities.� The life-of-mine average
silver and gold recoveries are estimated at 86% and 78%, respectively.� Further metallurgical test work is planned in
order to verify and potentially improve these recoveries.
Capital and Operating Costs
The
total capital and pre-production expenditures to bring La Preciosa
into production have been estimated at approximately $270 million.
Capital and operating costs have been calculated in 2011 US dollars with an assumed escalation of
capital during the construction period of 2.4%, or $6.4 million.� The following table summarizes the estimated
initial capital costs, which exclude sustaining capital, but include 20%
contingency for plant costs, 22% contingency for Owner�s costs, and 15%
contingency for the other items shown in the following table.� No contingency has been applied for
escalation of plant and engineering, procurement, and construction management
costs (EPCM).� The total estimated
contingency is $41.8 million.� Sustaining
capital over the remainder of the mine life is estimated at $115.7 million,
which is made up of $90.2 million for underground and open pit mining fleet
replacement and $25.5 million for owner�s costs, which include such items as
non-plant engineering, environmental activities including reclamation,
communications and security, insurance, water rights purchases, land purchases
and leases.
La Preciosa Project
Preliminary Capital Costs
|
Type
|
$Million
|
Open pit mining equipment
|
25.9
|
Underground mining equipment
|
15.8
|
Open pit pre-stripping
|
4.4
|
Underground capital development
|
3.7
|
Plant
|
143.3
|
EPCM
|
22.1
|
Owner's costs
|
47.9
|
Escalation of plant and EPCM costs
|
6.4
|
Total estimated capital(1)
|
$269.5
|
(1) Excludes sustaining capital.
|
The
average preliminary operating cash costs were estimated at $45.81 per tonne
processed. The average life-of-mine cash costs were estimated at $11.84
per ounce of silver, net of gold by-product credits.� The following table shows the breakdown of
the estimated cash costs.
La Preciosa Project
Preliminary Operating Cost Estimates (1)
|
Cost type
|
$/Tonne
|
$/Tonne milled
|
Open pit waste mining ($ per tonne of waste)
|
1.11
|
-
|
Open pit ore mining ($ per tonne of ore)
|
1.45
|
-
|
Underground mining ($ per tonne of ore)
|
31.49
|
-
|
Total mining
|
-
|
$26.60
|
Processing ($ per tonne of ore)
|
-
|
16.64
|
General and Administration ($ per tonne of ore)
|
-
|
2.57
|
Average total
cost (1) ($ per tonne of ore)
|
-
|
$45.81
|
(1) Excludes taxes and royalties.
|
Financial Metrics
The
PEA calculates an after tax net present value (�NPV�) at a 5% discount rate of
$315 million with an internal rate of return (�IRR�) of 24.3% and a payback
period of 3.3 years. The commodity price assumptions used in the
Assessment are $25/ounce for silver and $1,250/ounce for gold.� The following table shows the preliminary
financial results that were derived for the Project, which include allowances
for income taxes and royalties.
La Preciosa Project
Preliminary Financial Metrics � Long Term Pricing (1)
|
Measure
|
Amount(2)
|
Undiscounted present value (million $)
|
497.0
|
Net present value at 5% discount per year (million
$)
|
314.7
|
Net present value at 10% discount per year (million
$)
|
191.2
|
Internal rate of return (percent)
|
24.3
|
Payback period (years)
|
3.3
|
(1) The PEA is preliminary in nature, in that it includes Inferred Mineral
Resources that are considered too speculative geologically to have the
economic considerations applied to them to be categorized as Mineral
Reserves.� There is no certainty that
the PEA will be realized.
(2) Based on metal prices of $25/oz silver and
$1,250/oz gold.�
Inclusive of taxes, royalties, and a management fee of 5% of operating
costs ($50.9 million) and 5% of initial capital costs ($13.5 million) paid to
the operator.�������
|
At
close-to-current prices (assuming $38 per ounce of silver and $1,600 per ounce
of gold), the economics of the Project are as follows:
La Preciosa Project
Preliminary Financial Metrics � Current Pricing (1)
|
Measure
|
Amount(2)
|
Undiscounted present value (million $)
|
1,308.9
|
Net present value at 5% discount per year (million
$)
|
922.0
|
Net present value at 10% discount per year (million
$)
|
663.4
|
Internal rate of return (percent)
|
52.7
|
Payback period (years)
|
1.9
|
(1) The PEA is preliminary in nature, in that it includes Inferred Mineral
Resources that are considered too speculative geologically to have the
economic considerations applied to them to be categorized as Mineral
Reserves.� There is no certainty that the
PEA will be realized.
(2) Based on metal prices of $38/oz silver and
$1,600/oz gold.�
Inclusive of taxes, royalties, and a management fee of 5% of operating
costs ($50.9 million) and 5% of initial capital costs ($13.5 million) paid to
the operator.
�������
|
Project Status
Within
45 days following the issuance of this news release, Pan American and Orko will file a National Instrument 43-101 (�NI 43-101�)
compliant technical report with the applicable securities regulatory authorities that reflects the results of the PEA. � Pan American and Orko,
through their joint venture, plan to aggressively continue the technical and
engineering work required to complete a Feasibility Study in the second quarter
of 2012 and expect that the Feasibility Study will incorporate the results of
additional geotechnical, metallurgical and engineering optimisation studies as
well as refinements to the Mineral Resource estimate.
Qualified Persons
The PEA and this press release were prepared under the
supervision and review of Allan Earl, F.AusIMM, Market
Sector Leader � Western Division with Snowden Mining Industry Consultants,
Michael Stewart, M.AIG, Principal Consultant with Quantitative Group, Joshua
Snider, P.E., Engineer with M3 Engineering & Technology Corp., Thomas Drielick, P.E., Senior Vice President with M3 Engineering
& Technology Corp., and Gary Hawthorn, P.Eng.,
President of Westcoast Mineral Testing Inc., each of
whom is a Qualified Person for the purposes of NI 43-101.
About Pan American Silver Corp.
Pan
American�s mission is to be the world�s largest and lowest cost primary silver
mining company by increasing its low-cost silver production and silver
reserves. Pan American has seven mining operations in Mexico, Peru,
Argentina and Bolivia. Pan American also owns the Navidad
project in Chubut, Argentina.
About Orko Silver
Corp.
Orko Silver Corp. is developing one of the world�s largest primary silver
deposits, La Preciosa, located near the city of
Durango, in the State of Durango, Mexico.
Pan
American will discuss La Preciosa�s PEA during its
second quarter results conference call on Thursday, August 11, 2011 at 08:00 am
Pacific Time (11:00 am Eastern Time). Participants can access the
conference by dialling toll free 1-800-319-4610 (Canada & USA) or by
dialling 1-604-638-5340 from outside North America. The call can also be
accessed via live audio webcast at https://services.choruscall.com/links/pan110811.html
or at www.panamericansilver.com.
The
call will be available for replay for one week after the conference by dialling
1-604-638-9010 and entering code 6218 followed by the # sign.
Information Contact
Pan American
Kettina Cordero
Coordinator, Investor
Relations
(604) 684-1175
info@panamericansilver.com
www.panamericansilver.com
Orko
Gary
Cope
President
(604) 687-6310
info@orkosilver.com
www.orkosilver.com�
note on
forward-looking statements and information
CERTAIN
OF THE STATEMENTS AND INFORMATION IN THIS NEWS RELEASE CONSTITUTE �FORWARD-LOOKING
STATEMENTS� WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND �FORWARD-LOOKING INFORMATION� WITHIN THE
MEANING OF APPLICABLE CANADIAN PROVINCIAL SECURITIES LAWS. ALL
STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE FORWARD-LOOKING
STATEMENTS. WHEN USED IN THIS NEWS RELEASE THE WORDS, �ESTIMATES�, �EXPECTS�, �PROJECTS�, �PLANS�, �CONTEMPLATES�, �CALCULATES�, �OBJECTIVE�, �POTENTIAL� AND OTHER SIMILAR WORDS AND EXPRESSIONS, IDENTIFY FORWARD-LOOKING
STATEMENTS OR INFORMATION. THESE FORWARD-LOOKING STATEMENTS OR
INFORMATION RELATE TO, AMONG OTHER THINGS: the FUTURE SUCCESSFUL DEVELOPMENT OF
THE LA PRECIOSA PROJECT; THE ESTIMATES OF EXPECTED OR ANTICIPATED ECONOMIC
RETURNS, AS REFLECTED IN THE PRELIMINARY ECONOMIC ASSESSMENT; THE TIMING
FOR COMPLETION OF A FEASIBILITY STUDY AND EIA ON THE PROJECT; FUTURE PRODUCTION
OF SILVER AND GOLD AND MINE-LIFE OF LA PRECIOSA; FUTURE CASH COSTS
PER OUNCE OF SILVER; THE PRICE OF SILVER AND GOLD; THE SUFFICIENCY OF PAN
AMERICAN'S CURRENT WORKING CAPITAL, ANTICIPATED OPERATING CASH FLOW OR ITS
ABILITY TO RAISE NECESSARY FUNDS; THE CAPiTAL
NECESSARY TO CONSTRUCT A MINE AT THE LA PRECIOSA PROJECT AND THE TIME-LINE FOR
SUCH CONSTRUCTION; THE ACCURACY OF MINERAL RESOURCE ESTIMATES; ESTIMATED
PRODUCTION RATES FOR SILVER AND OTHER PAYABLE METALS PRODUCED AT LA
PRECIOSA; TIMING OF PRODUCTION AND THE CASH AND TOTAL COSTS OF PRODUCTION;
THE ESTIMATE OF METALLURGICAL RECOVERIES FOR SILVER AND GOLD; THE ESTIMATE FOR
MINING DILUTION; THE ESTIMATED COST OF AND AVAILABILITY OF FUNDING NECESSARY
FOR SUSTAINING CAPITAL; AND ONGOING OR FUTURE DEVELOPMENT PLANS AND CAPITAL
REPLACEMENT, IMPROVEMENT OR REMEDIATION PROGRAMS.
THESE STATEMENTS REFLECT CURRENT VIEWS WITH
RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS
AND ESTIMATES THAT, WHILE CONSIDERED REASONABLE, ARE INHERENTLY SUBJECT TO
SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, POLITICAL AND SOCIAL UNCERTAINTIES
AND CONTINGENCIES. MANY FACTORS, BOTH KNOWN AND UNKNOWN, COULD CAUSE
ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THE
RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT ARE OR MAY BE EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS CONTAINED IN THIS NEWS RELEASE AND ASSUMPTIONS
AND ESTIMATES HAVE BEEN MADE BASED ON OR RELATED TO MANY OF THESE
FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION: FLUCTUATIONS IN SPOT
AND FORWARD MARKETS FOR SILVER, GOLD, BASE METALS AND CERTAIN OTHER COMMODITIES
(SUCH AS NATURAL GAS, FUEL OIL AND ELECTRICITY); FLUCTUATIONS IN CURRENCY
MARKETS (SUCH AS THE MEXICAN PESO VERSUS THE U.S. DOLLAR); CHANGES IN NATIONAL
AND LOCAL GOVERNMENT, LEGISLATION, TAXATION, CONTROLS OR REGULATIONS AND
POLITICAL OR ECONOMIC DEVELOPMENTS, PARTICULARLY IN MEXICO AND IN CANADA;
RISKS AND HAZARDS ASSOCIATED WITH THE BUSINESS OF MINERAL EXPLORATION,
DEVELOPMENT AND MINING (INCLUDING ENVIRONMENTAL HAZARDS, INDUSTRIAL ACCIDENTS,
UNUSUAL OR UNEXPECTED GEOLOGICAL OR STRUCTURAL FORMATIONS, PRESSURES, CAVE-INS
AND FLOODING); EMPLOYEE RELATIONS; RELATIONSHIPS WITH AND CLAIMS BY LOCAL
COMMUNITIES AND INDIGENOUS POPULATIONS; AVAILABILITY AND INCREASING COSTS
ASSOCIATED WITH MINING INPUTS AND LABOUR; THE SPECULATIVE NATURE OF MINERAL
EXPLORATION AND DEVELOPMENT, INCLUDING THE RISKS OF OBTAINING NECESSARY
LICENSES AND PERMITS AND THE PRESENCE OF LAWS AND REGULATIONS THAT MAY IMPOSE
RESTRICTIONS ON MINING; DIMINISHING QUANTITIES Of GRADES OF MINERAL RESERVES AS
PROPERTIES ARE MINED; GLOBAL FINANCIAL CONDITIONS; CHALLENGES TO, OR DIFFICULTY
IN MAINTAINING, TITLE TO PROPERTIES AND CONTINUED OWNERSHIP THEREOF; THE ACTUAL
RESULTS OF CURRENT EXPLORATION ACTIVITIES, CONCLUSIONS OF ECONOMIC EVALUATIONS,
AND CHANGES IN PROJECT PARAMETERS TO DEAL WITH UNANTICIPATED ECONOMIC OR OTHER
FACTORS; INCREASED COMPETITION IN THE MINING INDUSTRY FOR PROPERTIES,
EQUIPMENT, QUALIFIED PERSONNEL, AND THEIR COSTS; AND, WITH RESPECT TO PAN
AMERICAN, THOSE FACTORS IDENTIFIED UNDER THE CAPTION �RISKS RELATED TO PAN
AMERICAN�S BUSINESS� IN PAN AMERICAN'S MOST RECENT FORM 40F AND ANNUAL
INFORMATION FORM FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION AND CANADIAN PROVINCIAL SECURITIES REGULATORY AUTHORITIES.
INVESTORS ARE CAUTIONED AGAINST ATTRIBUTING UNDUE CERTAINTY OR RELIANCE ON
FORWARD-LOOKING STATEMENTS. ALTHOUGH PAN AMERICAN AND ORKO HAve ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, THERE MAY BE OTHER FACTORS THAT
CAUSE RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED, DESCRIBED OR INTENDED.
THE COMPANIES DO NOT INTEND, AND DO NOT ASSUME ANY OBLIGATION, TO UPDATE THESE
FORWARD-LOOKING STATEMENTS OR INFORMATION TO REFLECT CHANGES IN ASSUMPTIONS OR
CHANGES IN CIRCUMSTANCES OR ANY OTHER EVENTS AFFECTING SUCH STATEMENTS OR
INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW.
Note
for US investors
THIS NEWS RELEASE HAS BEEN PREPARED IN ACCORDANCE WITH
THE REQUIREMENTS OF CANADIAN PROVINCIAL SECURITIES LAWS, WHICH DIFFER FROM THE
REQUIREMENTS OF U.S. SECURITIES LAWS. UNLESS OTHERWISE INDICATED, ALL
ESTIMATES INCLUDED IN THIS NEWS RELEASE HAVE BEEN BASED UPON MINERAL RESOURCE
ESTIMATES PREPARED IN ACCORDANCE WITH CANADIAN NATIONAL INSTRUMENT 43-101 �
STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS (��NI 43-101��) AND THE CANADIAN
INSTITUTE OF MINING, METALLURGY AND PETROLEUM CLASSIFICATION SYSTEM. NI
43-101 IS A RULE DEVELOPED BY THE CANADIAN SECURITIES ADMINISTRATORS THAT
ESTABLISHES STANDARDS FOR ALL PUBLIC DISCLOSURE AN ISSUER MAKES OF SCIENTIFIC
AND TECHNICAL INFORMATION CONCERNING MINERAL PROJECTS.
CANADIAN STANDARDS, INCLUDING NI 43-101, DIFFER
SIGNIFICANTLY FROM THE REQUIREMENTS OF THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE �SEC�), AND INFORMATION CONCERNING MINERALIZATION,
DEPOSITS, AND MINERAL RESOURCE INFORMATION CONTAINED OR REFERRED TO HEREIN MAY
NOT BE COMPARABLE TO SIMILAR INFORMATION DISCLOSED BY U.S. COMPANIES. IN
PARTICULAR, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ESTIMATES
INCLUDED IN THIS NEWS RELEASE HAVE BEEN BASED UPON ��INDICATED RESOURCES�� AND
��INFERRED RESOURCES��. U.S. INVESTORS ARE ADVISED THAT, WHILE SUCH TERMS
ARE RECOGNIZED AND REQUIRED BY CANADIAN SECURITIES LAWS, THE SEC DOES NOT
RECOGNIZE THEM. UNDER U.S. STANDARDS, MINERALIZATION MAY NOT BE
CLASSIFIED AS A ��RESERVE�� UNLESS THE DETERMINATION HAS BEEN MADE THAT THE
MINERALIZATION COULD BE ECONOMICALLY AND LEGALLY PRODUCED OR EXTRACTED AT THE
TIME THE RESERVE DETERMINATION IS MADE. U.S. INVESTORS ARE CAUTIONED NOT
TO ASSUME THAT ANY PART OF AN �INDICATED RESOURCE� WILL EVER BE CONVERTED INTO
A �RESERVE�. U.S. INVESTORS SHOULD ALSO UNDERSTAND THAT �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 �INFERRED RESOURCES� EXIST, ARE ECONOMICALLY OR
LEGALLY MINEABLE OR WILL EVER BE UPGRADED TO A HIGHER CATEGORY. UNDER
CANADIAN SECURITIES LAWS, ESTIMATED �INFERRED RESOURCES� MAY NOT FORM THE BASIS
OF FEASIBILITY OR PRE-FEASIBILITY STUDIES EXCEPT IN RARE CASES.
DISCLOSURE OF �CONTAINED OUNCES� IN A MINERAL RESOURCE IS PERMITTED DISCLOSURE
UNDER CANADIAN SECURITIES LAWS. HOWEVER, THE SEC NORMALLY ONLY PERMITS
ISSUERS TO REPORT MINERALIZATION THAT DOES NOT CONSTITUTE �RESERVES� BY SEC
STANDARDS AS IN PLACE TONNAGE AND GRADE, WITHOUT REFERENCE TO UNIT MEASURES.
ACCORDINGLY, INFORMATION CONCERNING MINERAL DEPOSITS SET FORTH HEREIN MAY NOT
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