October 28, 2010
Torex Gold Announces New U/G 6.79 G/T Resource Estimate For The El Limon Deposit Deferred Pre-Feasibility Will Include Results Of Expanded Drilling Program To Assess U/G Option
TORONTO, Ontario, October 28, 2010 - Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX:TXG) recently completed a re-evaluation of the El Limon deposit’s previously announced open pit resource of 18,271,000 measured and indicated tonnes at 3.31 g/t Au and established a new underground indicated resource estimate of 7,450,000 tonnes at 6.79 g/t Au, which indicates a potential for an underground mining operation at the El Limon deposit. Open pit resource estimates for the Los Guajes East and Los Guajes West deposits were not a part of the resource study and remain unchanged at 10,550,000 measured and indicated tonnes at 3.01 g/t as previously announced. As a result of the new underground resource estimate, the Company has elected to extend work on its Pre-feasibility study (“PFS”) until it fully evaluates the underground mining potential at El Limon and the drill results from its expanded exploration program announced on this date.(*)
“This higher grade U/G resource estimate and some recently completed preliminary mine design work, shows the potential to realize the benefits of the U/G option for El Limon,” said Fred Stanford, President & CEO of Torex. “Additional diamond drill data and operational studies are required to make a prudent and informed mining method selection,” he added.New U/G Resource Estimate indicates the potential to mine El Limon deposit underground
The previous National Instrument 43-101 report completed for the Project effective October 6, 2009 and entitled “Gleichen Resources Ltd., Morelos Gold Project, Guerrero, Mexico, NI 43-101 Technical Report” (the “2009 Report”) addressed only mineral resources for open pit mining options. Last July, Torex contracted the services of AMEC E&C Services Inc. (“AMEC”) to produce for the first time an underground resource estimate for the El Limon deposit. This resource estimate shown below, appears to be amenable to exploitation by underground mining operations which is expected to positively impact the development schedule of the Project.
Table: Underground Mineral Resource Statement**
El Limon Deposit, Morelos Gold Project, Mexico
Effective Date October 22nd, 2010.
*Underground Mineral Resource statement is in place of early released Open Pit Resource, not in addition to.
|Total Au grams |
|Au ounces |
** Underground mineral resources are not underground mineral reserves until they have demonstrated economic viability and all economic parameters have been applied with a level of accuracy of at least a preliminary feasibility study.
Mineral resources are reported at a gold cutoff grade of 1.5 g/t and at gold price of $1,035 per ounce. These underground mineral resources have an effective date of October 22nd, 2010.
An underground mining option for El Limon would provide a number of potential benefits for the development of the Morelos Gold Project (the “Project”), including:
- A significantly reduced environmental footprint and the associated reduction in risk in the environmental permitting process;
- A reduced schedule risk with the absence of the need to relocate a nearby village; and
- An accelerated production schedule due to the elimination of the long development time for the open-pit haul road and prestrip.
To support a declaration of underground mineral resources for the El Limon deposit at the Project, AMEC developed a new mineral resource block model for gold using the same assay database used in the 2009 Report. Whereas the 2009 resource model used 7.5m x 7.5m x 7m block size, and a probabilistic approach, the 2010 model uses smaller block size (1.875m x 7.5m x 3.5m), and a deterministic approach to group lithologies with similar skarn grade characteristics. Lithologies outside of the skarn domain were grouped into a separate sediment-intrusive domain. Lithologies within the skarn domain and the sedimentary-intrusive domain were still modeled by probabilistic methods similar to the 2009 model. Gold grades were determined by probabilistic methods based on the 2009 drill data-base. SRK Consulting (Canada) Inc. (“SRK”) have reviewed the underground Mineral Resource estimate for the El Limon Deposit (October 2010) and consider it to adequately represent the underground mineral resources at El Limon.
The underground mineral resources have taken into account geologic, mining, processing and economic constraints, and have been confined to or are adjacent to the potential underground mining shapes as determined by SRK and therefore are classified in accordance with the 2005 CIM Definition Standards for Mineral Resources and Mineral Reserves.
The information in this press release that relates to the underground Mineral Resource estimate for the El Limon deposit was compiled by Mr. Edward J.C. Orbock III, (MAusIMM #223090), a full-time employee of AMEC. Mr. Orbock has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activities undertaken, to qualify as an independent qualified person as this term is defined in National Instrument 43-101. Mr. Orbock consents to the inclusion in the press release of the matters based on this information in the form and context in which it appears.Project Development
After consideration of the data available to date, and the potential schedule and project economic benefits of an U/G mining concept, the Company has concluded that additional information is required to complete the PFS. Results of the expanded exploration work as outlined in a separate press release of today will have a direct impact on many of the key decisions to be made as part of the PFS, including mining method, mill sizing, tailings disposal, among other decisions.
The drilling to allow the mine design decision is and will be pursued aggressively. Drilling is targeted to be completed by the end of June of 2011 and will be followed by an update of the open pit and underground resource estimates. The PFS cannot be completed until after this new resource estimate is concluded as there are two key decisions that cannot be made without this information: a) the access points to an underground mine based on the amount of down dip extension; and b) the annual mining production rate which will dictate the size of the mill.
During the completion of the expanded drill program, work will continue on value added work that is not directly linked to the shape and size of the resources. This work will be focused on supporting future feasibility work and will include environmental permitting, metallurgical work as well as preparation work for selection of underground or open pit mining of the El Limon deposit.
Based on a conclusion of drilling on the existing deposits by the end of June 2011 and planning one month for the resource estimate, a PFS for the Project is expected to be completed by calendar Q4/2011.
Torex Gold Resources Inc. is a well funded, growth oriented Canadian mining company engaged in the exploration and development of precious metal resources with a focus on gold. It owns 100% of the Morelos Gold Project, an advanced stage gold exploration property, located 180km southwest of Mexico City in the highly prospective Morelos Gold Belt. The Project covers an area of 29,000 hectares of which more than 75% remains unexplored.
For further information, please contact:
TOREX GOLD RESOURCES INC.
President and CEO
Tel. (647) 260-1502
Vice President Investor Relations
Tel. (647) 260-1503
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release contains “forward-looking statements” and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the estimated resource and grade at the El Limon deposit, the assumptions upon which the estimate was based, future mining methods, if any, future exploration and development plans concerning the Morelos Gold Project, including expected timing for mobilizing drills on the project, expected drilling results and the timing within which the Company expects to receiving drilling results, anticipated timing for the completion of a pre-feasibility study and other technical studies on the project. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates” or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including the risk factors disclosed elsewhere in the Company’s public disclosure. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company’s expected financial and operating performance and the Company’s plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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