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Share Name | Share Symbol | Market | Type |
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Agromep Sa | TSXV:AGP | TSX Venture | Common Stock |
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MinCore Inc. ("MinCore" or the "Company"), is pleased to announce the receipt of a positive Preliminary Economic Assessment ("PEA") for the development of its Tameapa copper-molybdenum project in Sinaloa, Mexico (the "Project"). The independent NI 43-101 compliant PEA prepared by AGP Mining Consultants Inc. of Toronto Ontario ("AGP") confirms the economic potential of the Project with a life of mine production of 3.6 billion pounds of copper equivalent metal ("CuEq") and envisions a conventional open-pit mine at the Pico Prieto deposit and an underground sub-level caving mine at the Venado deposit. Capital payback is estimated at 3.5 years with annual production over the first five years of 215 million pounds of CuEq and averaging 185 million pounds of CuEq produced annually life of mine ("LOM"). The PEA is based on discounted cash flow analysis of a project designed to process 100,000 tonnes per day with ore initially from the Pico Prieto deposit and supplemented from year 12 onwards with mill feed from the molybdenum-rich Venado deposit. Based on the favourable economics seen in the PEA AGP recommends that the Tameapa project advance to the next levels of study to support the necessary level of engineering for a feasibility study. About MinCore MinCore is a mineral exploration company based in Toronto, ON whose primary focus is on the exploration and development of its Tameapa Copper Molybdenum Project located in the front range of the Sierra Madre mountains in Sinaloa State, North-Western Mexico. Results of the PEA The Financial Base Case discounted cashflows in the PEA are denominated in US$ and were based on the following assumptions: -- long term commodity prices of $2.75 copper, $16.5 Molybdenum, $1,000/oz gold and $16/oz silver; -- 642 million tonnes LOM mill feed; -- Milling rate of 100,000 t per day (36 million t per year); -- Mine life 19 years; -- Initial capital costs of $1,026 million; -- Capital payback 3.5 years; -- On site operating costs $6.65/t mill feed (including mining, processing, G&A); -- Pre-tax Net Present Value ("NPV") of US$1,031 million at an 8% discount rate; -- Internal Rate of Return ("IRR") of 22.9%; -- 3.6 million pounds of CuEq metal produced over the LOM. Project Metrics ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Years 1-5 Life of Mine ---------------------------------------------------------------------------- CuEq Production 215 m lb 185 m lb ---------------------------------------------------------------------------- Strip Ratio 0.38:1 0.52:1 ---------------------------------------------------------------------------- Copper (M's lb) 163 127 ---------------------------------------------------------------------------- Molybdenum (M's lb) 6.4 8.0 ---------------------------------------------------------------------------- Silver (M's oz) 1,405 1,092 ---------------------------------------------------------------------------- Gold (M's oz) 12.1 9.4 ---------------------------------------------------------------------------- Average NSR Value ($/t) 16.18 14.11 ---------------------------------------------------------------------------- Total Op Costs ($/t) (inc all off site costs) 6.82 7.11 ---------------------------------------------------------------------------- Margin ($/t) 9.36 7.00 ---------------------------------------------------------------------------- Annual Revenue (M's $) 554 477 ---------------------------------------------------------------------------- Annual Net Cashflow(i) (M's $) 271 213 ---------------------------------------------------------------------------- Copper Costs/lb pre-credits $ 1.43 $ 1.90 ---------------------------------------------------------------------------- Copper Costs/lb post-credits $ 0.64 $ 0.74 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (i)Net Cashflow = (Revenue - Operating Costs (including all off site costs) - Sustaining Capital) Copper is attributable for 70% of life of mine revenue The Tameapa Project The Tameapa Project comprises two large copper-molybdenum porphyry/breccia deposits, Pico Prieto and Venado, about 800 m apart. They are within a belt of Laramide-aged (53 to 59 ma) intrusive rocks extending from the United States to west-central Mexico and host numerous world-class porphyry deposits. Several northwest and northeast trending faults and lineaments cross the Tameapa property and the deposits. These faults and lineaments likely played a role in focussing the mineralization within this porphyry belt. The potential economics set out in the PEA indicate that for the Financial Base Case, (highlighted below) the Project has a NPV at 8% of $1,031 million with an IRR of 22.9%. The payback period is 3.5 years with the payback occurring in the fourth year of production. PEA Discounted Cash Flow Results (Pre-Tax) ---------------------------------------------------------------------------- Engineering Financial Financial Financial Cost Category Units Base Base Case #1 Case #2 ---------------------------------------------------------------------------- Metal Prices ---------------------------------------------------------------------------- Molybdenum $/lb 15.00 16.50 17.58 15.00 ---------------------------------------------------------------------------- Copper $/lb 2.50 2.75 3.04 3.25 ---------------------------------------------------------------------------- Silver $/oz 15.00 16.00 17.80 16.00 ---------------------------------------------------------------------------- Gold $/oz 950.00 1,000.00 1,061.00 1,100.00 ---------------------------------------------------------------------------- Revenue (after smelting, refining, roasting, payables) ($M) 8,201.0 9,058.0 9,964.0 10,0047.0 ---------------------------------------------------------------------------- Net Present Value ---------------------------------------------------------------------------- NPV @ 5% ($M) 1,050 1,559 2,102 2,178 ---------------------------------------------------------------------------- NPV @ 8% ($M) 642 1,031 1,447 1,515 ---------------------------------------------------------------------------- NPV @ 10% ($M) 446 775 1,129 1,192 ---------------------------------------------------------------------------- IRR ($M) 17.8 22.9 28.1 29.4 ---------------------------------------------------------------------------- Years (Year Payback Period paid) 4.3 (Yr 5) 3.5 (Yr 4) 2.9 (Yr 3) 2.7 (Yr 3) ---------------------------------------------------------------------------- (i)The mine designs were completed with metal prices of $2.50/lb of copper and $15.00/lb of molybdenum, but the PEA Financial Base Case used a copper price of $2.75/lb of copper and $16.50/lb of molybdenum. Two other financial cases were compared. The PEA is preliminary in nature as it includes Inferred Mineral Resources that are presently considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as reserves. There is no certainty that the results shown in the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Included in the PEA revenue are gold and silver values. The drill hole database incorporates historical holes from the previous operators, which did not include assays for silver and gold. All of MinCore's drilling did include assays for gold and silver. Consistent gold and silver values were noted in the concentrate testing and have been incorporated in the revenue stream. Assuming the PEA Financial Base Case prices, silver revenue accounted for 3.3% of the revenue and gold accounted for 1.7%. Both metals have been included in the PEA and will be included in future studies. AGP considered that their inclusion in the PEA was warranted. "The completion of a positive PEA for the Tameapa Project is an important milestone for MinCore," said David Jones, CEO of MinCore. "The study further confirms both the economic and technical viability of the Tameapa Project, and provides a strong foundation for moving the project forward in the near term. This is a copper-molybdenum project that represents a tremendous opportunity to bring to market a large, low cost copper project into an anticipated strong world copper market." Near Term Exploration and Development Plan With an economically PEA study complete, MinCore will move towards taking the project to Feasibility level. MinCore plans to initiate a two-phase drill program, totalling about 40,000 m, focussed on exploration and in-fill drilling at Pico Prieto, however also including some exploration drilling to the south and west of Venado. The PEA puts forth an exploration budget of US$8.3 million to collect drill data for grade estimation at a confidence level high enough to support a feasibility level study. A recent reconnaissance study by MinCore covering the exploration potential of the entire 66,000 ha property has identified 24 new mineralized exploration targets outside of the area of the Pico Prieto and Venado deposits. All these targets remain at early stages of exploration and include various mineralization types, including copper-molybdenum porphyry, Mo-breccia, polymetallic skarn, IOCG, and precious and/or base metal veins and breccias. Gord Zurowski P.Eng., Mike Waldegger, P.Geo., Andy Holloway, P.Eng., Geoffrey Challiner, CEng., Roland Tosney, P.Eng. and Dave Rennie, P.Eng. are the Qualified Persons, as defined under National Instrument 43-101, who supervised and are responsible for the Preliminary Economic Assessment for the Tameapa Project and have reviewed the content of this release. All exploration at the Tameapa Project is done under the supervision of MinCore's Chief Geologist, Sr.Ramon Solis, and Dr.George Cargill Ph.D. P.Eng., who fulfills the requirements of a Qualified Person as defined in National Instrument (NI) 43-101. Dr Cargill has verified the data disclosed in this update, on the Tameapa Property including sampling, analytical and test data underlying the information. Cautionary Note Regarding Forward-Looking Information Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward -looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "plan", "estimate" and "expect", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the timing and amount of future production, the mineral resource estimate, the results of the PEA, the future exploration on and the development of the Tameapa Project are forward- looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the need for additional financing; the possibility of failure to convert estimated mineral resources to reserves; future metallurgical test work; changes in commodity prices; risks arising from operating in Mexico (including political developments in Mexico, changes to regulations affecting the Company's activities, surface rights, foreign currency fluctuations and delays in obtaining or failures to obtain required regulatory approvals); the uncertainties involved in interpreting exploration results and other geological data; volatility of and sensitivity to market prices for metals (market or otherwise); inability or delays in procuring the required capital equipment and/or operating parts and supplies; equipment failure; unexpected geological conditions; environmental and safety risks; seismic activity; weather and other natural phenomena; risks relating to labour and other exploration, development and operating risks involved in the mineral exploration and development industry. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements. APPENDIX A: Preliminary Economic Study Details Mining The Pico Prieto open pit has been designed as a series of six pushback's or phases and will be developed using conventional rotary drilling, blasting and loading with hydraulic shovels and 218-tonne trucks. The open pit mine was estimated to have a LOM strip ratio of 0.52:1. A total of 624.4 Mt of Inferred resource material, with a LOM mill feed grade of 0.22% Cu and 0.013% Mo will be supplied to the mill from the open pit, while 325.0 Mt of waste will be moved. Supplementing the mill feed will be a sublevel caving underground operation at the molybdenum-rich Venado deposit. The operation will supply 14.2 Mt of Indicated Mineral Resources and 3.5 Mt of Inferred Mineral Resources as feed material to the mill. Underground mine life is expected to be eight years from commencement of mining in Year 12 of the overall production schedule. The nominal production rate selected for the Venado underground is 2.75 Mt/a (7,640 t/d). LOM feed grade for the underground 0.08% Cu and 0.084% Mo. Metallurgy and Processing ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Mineralization Type % Cu to Copper Conc. % Mo to Moly Conc. ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 100% Primary 86.8 70.2 ---------------------------------------------------------------------------- 50/50 Primary/Enrichment Blend 78.2 70.2 ---------------------------------------------------------------------------- 100% Enrichment 69.6 70.2 ---------------------------------------------------------------------------- No penalty levels of any deleterious elements were measured in any concentrates produced In addition significant concentrations of rutile and ilmenite were measured in the flotation tailings. Opportunity may exist to economically concentrate and recover these minerals, thereby improving project economics. Capital Costs ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Sustaining Pre-production Capital (i) Total Capital Capital Year 2+ Capital Category ($M) ($M) ($M) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Open Pit Mining 224.1 85.6 138.5 ---------------------------------------------------------------------------- Underground Mining 108.3 0.0 108.3 ---------------------------------------------------------------------------- Processing 432.7 428.4 4.3 ---------------------------------------------------------------------------- Infrastructure 257.6 163.1 94.5 ---------------------------------------------------------------------------- Environmental 8.5 0.0 8.5 ---------------------------------------------------------------------------- Indirects 178.7 178.3 0.4 ---------------------------------------------------------------------------- Contingency 183.3 170.9 12.4 ---------------------------------------------------------------------------- Total 1,393.2 1,026.3 366.9 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (i)Underground mine to commence production in Year 12 Operating Costs Mining costs for the open pit are expected to be $1.06/t total material or $1.66/t of mill feed (includes waste). Mine operating costs for the underground mine are estimated at $8.65/t. The table below shows a summary of all operating cost categories on a cost per tonne of mill feed basis over the total tonnage. ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cost per DMT Concentrate Cost per Tonne ($/t Cost Category Total ($M) ($/t Mill Feed) Concentrate) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Open Pit Mining- mill feed and waste 1,034.6 1.61 - ---------------------------------------------------------------------------- Underground Mining- mill feed 153.3 0.24 - ---------------------------------------------------------------------------- Processing 2,926.4 4.56 - ---------------------------------------------------------------------------- G&A 157.9 0.25 - ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Subtotal On-Site Costs 4,272.2 6.66 - ---------------------------------------------------------------------------- Concentrate Trucking 82.2 - 16.13 ---------------------------------------------------------------------------- Port Cost 25.1 - 4.92 ---------------------------------------------------------------------------- Shipping to Smelter/Roaster 183.7 - 36.04 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Subtotal Off-site Costs 291.0 - 57.09 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Total 4,563.3 - - ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Mineral Resources Pico Prieto mineral resources was estimated utilizing drill results for 53 core holes, plus surface channel chip samples in the southeast corner of the deposit. Assays were composited in 2 metre down-hole intervals. AGP's review determined that capping of copper grades was not required prior to compositing, however molybdenum was capped at 0.15% to remove several outlier values. Wireframe models of all zones and major lithologies were created based on cross sectional interpretation. The density values assigned to the major lithologies were based on 654 bulk density measurements of drill core. Inverse Distance weighted to the third power was selected to interpolate copper and molybdenum grades of all blocks. Block dimensions were 30 metres by 30 metres by 10 metres. The table below shows the mineral resources for Pico Prieto, at a range of CuEq cut-off's. Pico Prieto Deposit Mineral Resource Statement ------------------------------------------------------------ Cutoff Tonnage Cu Mo CuEq (% CuEq) (Mt) (%) (%) (%) ------------------------------------------------------------ 0.10 991.7 0.18 0.012 0.26 ------------------------------------------------------------ 0.15 846.0 0.20 0.013 0.28 ------------------------------------------------------------ 0.20 656.0 0.22 0.014 0.31 ------------------------------------------------------------ 0.25 443.3 0.25 0.016 0.35 ------------------------------------------------------------ 0.30 271.3 0.29 0.017 0.39 ------------------------------------------------------------ 0.35 151.5 0.34 0.018 0.44 ------------------------------------------------------------ 0.40 86.2 0.39 0.018 0.50 ------------------------------------------------------------ 0.45 51.7 0.45 0.017 0.55 ------------------------------------------------------------ 0.50 30.4 0.50 0.017 0.61 ------------------------------------------------------------ 0.55 18.1 0.56 0.017 0.66 ------------------------------------------------------------ Notes: The PEA incorporates Pico Prieto inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them, and that would enable them to be categorized as mineral reserves. Thus inherent in the PEA is the risk that the value of these inferred mineral resources may not be realized. Mineral resources that are not mineral reserves do not have a demonstrated economic viability. (i)Copper Equivalent (CuEq) = Cu grade + (Mo Price/Cu Price), where Cu price = $2.50/lb, Mo price = $15/lb, 100% metallurgical recoveries assumed. No assaying was carried out for Au or Ag on historical samples at Pico Prieto. All of the drilling carried out by MinCore was routinely assayed for Au and Ag. Venado Deposit Mineral Resource Statement ---------------------------------------------------------------------------- Cutoff Tonnage Mo Cu MoEq Category (% MoEq) (Mt) (%) (%) (%) ---------------------------------------------------------------------------- Indicated 0.07 18.4 0.096 0.10 0.109 ------------------------------------------------------------ 0.06 23.5 0.086 0.10 0.099 ------------------------------------------------------------ 0.05 29.7 0.077 0.10 0.090 ------------------------------------------------------------ 0.04 37.0 0.068 0.10 0.081 ------------------------------------------------------------ 0.03 55.1 0.052 0.10 0.066 ---------------------------------------------------------------------------- Inferred 0.07 5.2 0.077 0.12 0.093 ------------------------------------------------------------ 0.06 7.5 0.069 0.12 0.084 ------------------------------------------------------------ 0.05 10.6 0.061 0.11 0.075 ------------------------------------------------------------ 0.04 13.8 0.055 0.10 0.068 ------------------------------------------------------------ 0.03 26.5 0.039 0.10 0.052 ---------------------------------------------------------------------------- Notes: 1. CIM definitions were followed for Mineral Resources. 2. Mineral Resources are estimated at a base case cutoff grade of 0.05% MoEq. 3. Mineral Resources are estimated using average long-term metal prices of US$2/lb Cu and US$15/lb Mo. 4. A nominal minimum mining width of 3 m was used. 5. MoEq was calculated as MoEq = Mo + (Cu x (Cu_price/Mo_price)). No assaying was carried out for Au or Ag on historical samples at Venado. All of the drilling carried out by MinCore was routinely assayed for Au and Ag. Gord Zurowski P.Eng., Mike Waldegger, P.Geo., Andy Holloway, P.Eng., Geoffrey Challiner, CEng., Roland Tosney, P.Eng. and Dave Rennie, P.Eng. are the Qualified Persons, as defined under National Instrument 43-101, who supervised and are responsible for the Preliminary Economic Assessment for the Tameapa Project and have reviewed the content of this release. All exploration at the Tameapa Project is done under the supervision of MinCore's Chief Geologist, Sr.Ramon Solis, and Dr.George Cargill Ph.D. P.Eng., who fulfills the requirements of a Qualified Person as defined in National Instrument (NI) 43-101. Dr Cargill has verified the data disclosed in this update, on the Tameapa Property including sampling, analytical and test data underlying the information.
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