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Constitution Mining receives Preliminary Master
Plan (Scoping Study) for Peruvian Gold Sands Project
Buenos Aires, Argentina - May 18, 2009 - Constitution Mining Corp.
(CMIN.OB) announces that it has received a Preliminary Master Plan for
the development of the gold-rich sands and gravels of its Gold Sands
Project in Peru.
The Plan was prepared by MTI Holland, a Netherlands research and
development division of IHC Merwede that specializes in dredging and
alluvial mining technology. CMIN commissioned MTI Holland to recommend the
optimum mining and processing technologies for the Gold Sands Project. Constitution
Mining's goal is to achieve production from the Gold Sands Project of at
least of 500,000
ounces of gold per year from resources grading
between 250 and 350 milligrams per cubic meter.
The Preliminary Master Plan submitted to CMIN by MTI Holland:
• sets out a plan of action for on-going
geotechnical studies and recovery test work
• sets out mining scenarios and lay-outs of possible operations
• provides required equipment lists
• estimates required capital expenditures and operating costs
• provides preliminary cash flow analyses based on the information
collected to date.
This study indicates that dredging is by a significant margin the
most economic way of mining the large quantities of alluvial sands and
gravels in the wet environment of the Manseriche alluvial field. The mining
systems proposed consist of wheel dredgers connected to floating plants
that separate gold from the sands and gravels by scrubbing and screening in
combination with asymmetrically-pulsed jigs, centrifugal separators and
cyclones.
As contemplated by the study, mining would start in 18 to 24 months
with a wheel suction dredger of limited size and dredging depth and an
appropriately matched floating plant. A year later, the first full-scale
dredger and floating plant, with a capacity to dredge to a depth of 20 meters, would be
commissioned. An additional year later, a similar sized dredger and plant
would be brought on with a maximum dredging depth of 40 meters. The two
dredgers and their floating plants would work together in a single pond. Thereafter,
the two-dredger system would be replicated twice, over a four-year period.
Initial production would be at a rate of 48,000 ounces per
year with one dredger and should grow to 630,000 ounces
per year with seven dredges.
Preliminary cash-flow analysis based on current information and assuming an
average gold concentration of 300 milligrams per cubic meter, a mine life
of 16 years, a discount rate of 8% and a gold price of US$800 per ounce
return the following:
• For the initial, single-dredger operation (pilot mining): NPV =
US$80 million, IRR = 38%, Operating cost = US$261 per ounce.
• For the intermediate, three-dredger operation: NPV = US$309
million; IRR = 45%; Operating cost = US$206 per ounce.
• For the seven-dredger operation: NPV = US$600 million; IRR = 46%;
Operating cost = US$183 per ounce.
Constitution Mining CEO, Dr Willem Fuchter, commented: "The
Preliminary Master Plan is, in effect, a first draft, or a work in
progress, that will evolve as additional data are collected and analyzed
and will, ultimately, form the technical basis for a Feasibility Study. Not
only does it indicate the exceptional economic potential for the
development of such deposits, but it provides the Company with a concise
road map for the rapid development of its Gold Sands Project."
About Constitution Mining Corp.
Our goal is to continuously increase the amount of gold underlying
each of our outstanding shares. To build such value, we are focusing on the
rapidly developing Gold Sands region of Peru, where we have optioned 382
square kilometers (229 square miles) of mining properties - the largest
such block in the district.
The Gold Sands of Peru were laid down by eons of alluvial erosion. For
millions of years, the waters of the Santiago and the Marañón rivers have
been carving their way through the gold-rich mountain canyons of the Andes,
carrying off vast amounts of gold and depositing much of the treasure in
loose gravels and sands - Gold Sands - below the Manseriche gorge in
Northeastern Peru. There the rivers reach a broad flood plain, slow to a
crawl and release their cargo.
Drilling results from more than 500 test holes in a 'proof of
concept' zone located on Constitution Mining's properties indicate the
presence of tens of millions of ounces of alluvial gold in the region. We
intend to capture the profit potential of that gold by applying recently
enhanced mining technologies that are especially well suited to
low-density, near-surface deposits. These green-mining technologies are
energy-efficient and environmentally friendly -- features that support
their profitable use.
Further information about Constitution Mining Corp may be found at www.Constitutionmining.com.
On behalf of the Board:
Dr. Willem Fuchter, CEO
Constitution Mining Corp.
Investor Inquiries
Toll Free: 888-475-0070
Direct Dial: 646-755-3352
Email: Info@ConstitutionMining.com
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