Newstrike Capital Inc. Announces Maiden NI 43-101 Resource Estimate for the Ana Paula Project, Guerrero, Mexico
March 27 2013 - 4:41PM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
Newstrike Capital Inc. (TSX VENTURE:NES) ("Newstrike" or the "Company") is
pleased to report its maiden resource estimate prepared in accordance with
National Instrument 43-101 ("NI 43-101") for its flagship Ana Paula Project in
the Municipalities of Cuetzala del Progreso and Apaxtla de Castrejon, Guerrero
State, Mexico. The Ana Paula mineral resource estimate was developed by
Independent Mineral Consultants of Tucson, Arizona, USA ("IMC") for Newstrike
under the direction of Mr. H. E. Welhener. The resource is based on 130 diamond
core drillholes aggregating 67,943 metres and containing 45,512 assay intervals,
of which effectively all are assayed for gold and silver. The mineral resource
estimate has an effective date of February 26th, 2013. A full report prepared in
accordance with NI-43-101 (the "Report") will be filed on SEDAR within 45 days
of this news release. The recommendations from the Report will be used to
optimize the pit (see below) and advance the economic viability of the Ana Paula
resource.
Resource Estimate
To meet the "reasonable prospects for economic extraction" requirement the
mineral resource is tabulated within a conceptual floating cone pit shape
defined by using certain metal price, cost, recovery and pit slope assumptions
listed below in Table 1 and applying it to a geologically-constrained resource
block model with 10x10x10 metre block dimensions using a cutoff grade of 0.45
grams per tonne gold equivalent (AuEq) defined by the price, cost and recovery
assumptions. With measured and indicated resource classes included, the floating
cone pit shape is estimated to contain 43.0 million tonnes grading 1.63 grams
per tonne for 2.26 million contained gold equivalent ounces. This includes 2.20
million ounces of 1.59 grams per tonne gold and 9.7 million ounces of contained
silver at grades of 1.56 grams per tonne gold and 7.0 grams per tonne silver.
Additional studies are required to determine metal price, cost, recovery, and
pit slope specific to optimizing the pit parameters used.
Table 1. Resources in Floating Cone Pit Shape, 0.45g/t Equivalent
Gold Cutoff
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Au
Au Ag Eq Moz. Moz. Moz
Class Mt g/t g/t g/t Au Ag AuEq
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Measured 18.4 2.21 6.2 2.25 1.31 3.7 1.33
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Indicated 24.6 1.13 7.6 1.18 0.89 6.0 0.93
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M&I 43.0 1.59 7.0 1.63 2.20 9.7 2.26
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Inferred 1.8 0.78 18.7 0.89 0.05 1.1 0.06
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Notes and assumptions:
1. Mineral Resources are not Mineral Reserves until they have demonstrated
economic viability
2. Mineral Resources are reported as undiluted
3. Mineral Resources were developed in accordance with CIM (2010) guidelines
4. Mineral Resources are reported using a long-term gold price of $1,450/oz
and silver price of $28/oz
5. Mining costs used are estimated at $2.05/ton plus $0.02/bench below 900m
elevation
6. Processing costs +general and administrative expenses are estimated at
$17.27 per tonne
7. Gold recoveries are estimated at 85%
8. Silver recoveries are estimated at 23.7%. A silver divisor of 160 was
used to calculate equivalent gold. (Silver is assumed to be recovered along
with gold during processing.)
10. Pit slope angles are 55 degrees east-facing, 45 degrees west-facing
11. Blocks classified as inferred were assumed to have zero economic value
when designing the pit. However, inferred resources in the pit were included
in the resource tabulations
12. Resource QP is H. E. Welhener of IMC
13. M&I = measured and indicated, Mt = million tonnes, g/t = grams per
tonne, Moz = million ounces, Au = gold, Ag = silver, AuEq = gold equivalent
14. There can be no assurance that all or any part of this resource will be
converted into a mineral reserve
The floating cone pit was designed with zero economic value assigned to model
blocks classified as inferred. Inferred material contained in the pit was,
however, included in the resource tabulations. Resources are undiluted and are
tabulated above the 0.45 grams per tonne gold equivalent (AuEq) cutoff grade
calculated from the input parameters listed above, in Table 1. A silver divisor
of 160, also estimated from the cone input parameters, is used to calculate
AuEq.
Table 2. Resources in floating cone pit shapes using lower metal prices M&I
+ Inferred at various cutoff grades.
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Cash
Cost
Au Ag AuEq $/oz
Price Cutoff Moz Moz Moz Stripp- AuEq
$/oz g/t Au Ag AuEq Cont- Cont- Cont- ing Recov-
Au/Ag AuEq Mt g/t g/t g/t ained ained ained Ratio ered
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600/11.59 1.05 10.4 3.77 9.2 3.83 1.27 3.1 1.29 5.00 291
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800/15.45 0.79 14.1 3.08 9.1 3.14 1.39 4.1 1.42 4.21 335
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1,000/19.31 0.63 19.7 2.49 8.4 2.54 1.58 5.3 1.62 4.06 408
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1,200/23.17 0.53 31.9 1.87 7.2 1.91 1.92 7.4 1.97 3.87 535
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1,450/28.00 0.45 44.8 1.56 7.5 1.61 2.25 10.8 2.32 4.04 646
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Table 2 summarizes the resources contained in floating cone pit shape that use
lower gold and proportionately lower silver prices (other cone pit input
parameters were not changed). Contained gold and silver are not highly sensitive
to decreases in metal prices because the bulk of the Ana Paula resource occurs
in a near-surface higher-grade zone.
Potential to Increase Resources
Based on its analysis of the drilling and the resource model results completed
during this reporting period, IMC formed the following summary conclusions. It
should be noted that these conclusions apply only to the area in and around the
present Ana Paula conceptual cone pit. Exploration potential elsewhere is not
considered:
-- Additional near surface material, inside and outside of the pit
periphery, not included in the resource estimate, is too far from a
drill hole to be assigned a grade in the model and is therefore assumed
to have a grade of zero. Shallow infill drilling is recommended in these
areas to determine whether any of the material has a grade above cutoff.
Any such material could potentially be added to a resource estimate.
-- Further additional material not included in the resource estimate occurs
in pod-like bodies in the lower part of the breccia zone beneath and
adjacent to the cone pit. If these pods can be confirmed as potentially
economic underground mining targets, and potentially mineable
underground shapes can be defined, this material could be added to
increase the resource estimate.
-- Resources would increase if the results of ongoing studies justify the
use of higher metal price, higher recovery, lower operating cost and/or
steeper pit slope angle assumptions. However, there are no guarantees
that the results of these studies will justify such increase.
Mine Development Potential
Based on its reviews of the available operating cost and metallurgical data IMC
is of the opinion that the identified resource at Ana Paula represents a
potentially viable mining opportunity and that studies to evaluate mining
potential are now warranted. In this regard IMC notes that the bulk of the Ana
Paula resource is contained in a near-surface higher-grade zone that would be
amenable to mining under a range of metal price, operating cost and recovery
scenarios.
The resource estimate calculation for Ana Paula contemplates an open pit
extraction method and the parameters that will be required to optimize the open
pit scenario. In the absence of engineering studies required to determine the
optimum pit parameters specific to the Ana Paula Project, certain technical and
economic assumptions were made which are considered to be a "best estimate"
given existing conditions. At this stage, no studies have been conducted to
determine the viability of underground extraction methods.
Metallurgy and Processing
Basic scoping on un-optimized metallurgical tests were conducted using
conventional processing methods. Results obtained from preliminary metallurgical
tests are from a composite sample of the near surface high grade Breccia Zone
and are not necessarily representative of all mineralization types within a cone
pit shape. Results include:
- Whole pulp CIL/CIP cyanide leach over 96 hours ranged 77 to 81% Au recovery.
- In conventional Froth Flotation tests 93 to 96% of the gold was recovered to
the concentrate.
- Conventional CIL/CIP cyanide leach tests of the Flotation Concentrate ranged
79 to 84% Au recovery. The CIL test results indicate that the mineralization is
not preg-robbing.
Technical indicators obtained from tests so far are encouraging enough to
warrant further grind and reagent and flotation optimizations studies aimed at
obtaining overall gold recoveries of 85% or greater and improving silver
recoveries. Additional testing on selected representative samples is currently
underway at G&T Metallurgical Services of Kamloops, BC, Canada, a division of
ALS Global Ltd. that will deepen the understanding of the Ana Paula Project.
Geotechnical Studies
Geotechnical studies indicate that the rock at Ana Paula is competent and that
overall pit slope angles of 45 to 55 degrees will be achievable. A report
completed by SRK Consulting (US) Inc. of Reno, USA, concludes that an
opportunity exists to steepen the slopes and increase the size of the in pit
resource by conducting further geotechnical investigations on the Ana Paula
Project. A 1,200 metre drill program of oriented core holes is recommended for
geotechnical refinement (slope stability assessment).
Data Verification and QAQC
IMC completed a data verification and review that concluded that Newstrike's
gold and silver assay data are of acceptable quality to be used to develop a
resource estimate and made certain recommendations to the QAQC program.
Mr. Thomas H. Bagan, P.E. MBA, Vice President Project Development for Newstrike
and a qualified person under NI 43-101 has reviewed and approved the contents of
this press release.
About Newstrike (TSX VENTURE:NES)
Newstrike Capital Inc. is a gold-silver focused explorer, targeting known and
historic mining districts in Mexico. Key senior members of the Company's current
management and directors have participated in Guerrero Gold Belt discoveries,
including Goldcorp Inc.'s producing Los Filos Mine and Torex Gold Resources
advanced stage Morelos Project in Guerrero State.
Newstrike holds a 100% interest in certain exploration properties in Mexico
located within two established mining districts; the Au (Ag-Cu) skarn-porphyry
camp of the Guerrero Gold Belt, and the polymetallic Pb-Zn-Ag (Au-Cu) rich
epithermal camp of the mining districts of Oaxaca State.
Certain of the statements made in this news release contain forward-looking
information within the meaning of applicable Canadian securities law. Material
forward-looking information includes, but is not limited to statements or
information with respect to the resource estimate and potential future
exploration and development results and results of studies in respect of the
Company's Ana Paula Project. We have made numerous assumptions about the
material forward-looking information contained herein, including among other
things, that prices of gold and silver will remain relatively stable, that
applicable permits will be obtainable and that any required financing will be
available on reasonable terms.. Even though our management believes that the
assumptions made and the expectations represented by such statements or
information are reasonable, there can be no assurance that the forward-looking
statement or information will prove to be accurate. Forward-looking information
by its nature involves known and unknown risks, uncertainties and other factors
which may cause the actual results to be materially different from any future
results expressed or implied by such forward-looking information. Such risks,
uncertainties and other factors include, among others, the following: the
inherent risks and uncertainty involved in the exploration and development of
mineral properties; the uncertainties involved in interpreting drill results and
other exploration data; the potential for delays in exploration or development
activities; the geology, grade and continuity of mineral deposits; the
possibility that future exploration, development or mining results will not be
consistent with the Company's expectations; accidents, equipment breakdowns,
labor disputes or other unanticipated difficulties with or interruptions in
production and operations; fluctuating prices of metals and other commodities;
currency fluctuations; the possibility of project cost overruns or unanticipated
costs and expenses; uncertainties relating to the availability and costs of
financing needed in the future; the inherent uncertainty of production and cost
estimates and the potential for unexpected costs and expenses; regulatory
restrictions, including environmental regulatory restrictions and liability;
competition and loss of key employees; political instability in Mexico; the
availability of key equipment; the risk of disruption from non-governmental
organizations; risks relating to our common shares and the public markets.
Should one or more of these risks, uncertainties or other factors materialize,
or should underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking information. Although we have
attempted to identify factors that would cause actual results to differ
materially from those described in forward-looking information, there may be
other factors that cause actual results, performances, achievements or events to
not be as anticipated, estimated or intended. Also, many of the factors are
beyond our control. There can be no assurance that forward-looking information
will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly you should not
place undue reliance on forward-looking information. Except as required by law,
we do not expect to update forward-looking information as conditions change and
you are referred to the full discussion of the Company's business contained in
the Company's reports filed with the securities regulatory authorities in
Canada.
FOR FURTHER INFORMATION PLEASE CONTACT:
Newstrike Capital Inc.
Richard Whittall
Director, President & CEO
604-605-4654
604-806-6112 (FAX)
www.newstrikecapital.com
http://newstrikecapital.com/blog