Click here to close now.


News Feed Item

Mandalay Resources Corporation completes purchase of Challacollo silver-gold project, files technical report, and begins 12 month feasibility study

TORONTO, Feb. 7, 2014 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND) is pleased to announce that it has completed the purchase of Silver Standard Resources Inc.'s ("Silver Standard") (TSX: SSO, NASDAQ: SSRI) 100% interest in the Challacollo silver-gold project in Region I, Northern Chile (the "Project").  Terms of the purchase were as disclosed in the press release announcing the transaction on December 20, 2013 and as below. The value of the closing consideration was approximately US$16.7 million using the Canadian/US Dollar exchange rate and the Mandalay share price on the day of closing.

Mandalay has filed an Independent Technical Report prepared by Roscoe Postle Associates Inc. ("RPA") substantiating the Mineral Resource estimate announced in the December 20, 2013 press release. The resource contains 8.0 million ounces of silver in the Indicated Resource category and 24.3 million ounces of silver in the Inferred Resource category.

Brad Mills, CEO of Mandalay commented, "The acquisition of the Challacollo silver-gold project has been completed as contemplated by the Share Purchase Agreement announced on December 20, 2013."

Mr. Mills continued, "With the close of the transaction and the publishing of the Mineral Resource Estimate, we now have a solid foundation on which to commence our feasibility study.  The study work is expected to consist of 8,000 to 10,000 metres of diamond core drilling and associated assays which are designed to infill and upgrade the current RPA resource estimate. 10% of the drill metres will also be used to test resource extensions. Mine design and costing will be completed once the resource estimate has been updated. Metallurgical testing will be conducted on both drill core and underground samples from the developed portion of the deposit. The metallurgical information will be used to complete detailed plant design and costing. Engineering studies will be completed on the required infrastructure requirements such as access roads, power, and water. Finally, environmental and community baseline studies necessary for mine permitting will be commenced.

The goal of the program is to complete and publish a full feasibility study and file for all permits required for construction and operations within 12 months. We expect the cost of the program to be approximately $5-7 million dollars, funded from current corporate cash resources.

We are very pleased with the acquisition of the Project as it meets our acquisition criteria of low cost, near-term production with significant exploration potential."

The Transaction:

Under the terms of the Share Purchase Agreement, Mandalay delivered to Silver Standard upon closing:

  • US$7.5 million in cash; and

  • 12 million common shares of Mandalay, valued at $US9,188,160 at a share price of $CAD0.85/share and $US/$CAD exchange rate of 0.9008.

Contingent consideration to be delivered to Silver Standard under the Share Purchase Agreement includes:

  • 5 million common shares of Mandalay to be issued at the end of the first quarter in which commencement of commercial production at the Project occurs;

  • an aggregate cash payment equal to the equivalent of 240,000 troy ounces of refined silver, payable in eight quarterly installments equal to the cash equivalent of 30,000 troy ounces of refined silver per quarter, based on the average silver price for each such quarter, beginning with the quarter immediately following the quarter in which commencement of commercial production at the Project occurs; and

  • a 2% Net Smelter Returns royalty on silver sold or produced from the Project in excess of 36 million ounces, with a cap/buyout of US$5 million.

About the Challacollo Property:

Challacollo is an epithermal silver deposit located in Region I, Northern Chile. It is centered about 130 kilometers (km) southeast of the major port city of Iquique. The Pan-American Highway passes 30 km west of the property.  Several power transmission lines are located 15 and 30 km from the property. The Project includes water rights.

Silver mineralization on the property is hosted in the Cretaceous Challacollo volcanic complex of intermediate to silicic volcanic rocks and associated sedimentary rocks. Mineralization is contained in a system of northeast- to north-trending epithermal quartz-carbonate-barite veins that have been oxidized to a depth of at least 250 meters (m). The largest of these veins is the Lolón Vein, which has a strike length of at least 3.5 km and contains the entire current estimated Mineral Resource.

Mineral Resource Estimate:

In the Technical Report filed on SEDAR, RPA has identified the following Indicated and Inferred Mineral Resources contained in the Lolón Vein based upon drilling and underground sampling data generated by prior operators. The effective date of the Challacollo Mineral Resource estimate is December 13, 2013.

Table 1 - Mineral Resource Estimate, Challacollo

Ag (silver) g/t
(grams per
Au (gold)
Ag Moz
Au koz
Indicated 1.03 242 0.40 8.0 13.4
Inferred 3.90 193 0.32 24.3 40.1


  1. CIM definitions were followed for classification of Mineral Resources.
  2. Mineral Resources are estimated at a silver equivalent (AgEq) cut-off grade of 110 g/t.
  3. Mineral Resources are estimated using a silver price of US$24/oz and a gold price of US$1,400 per ounce.
  4. High silver and gold assay values were capped to 700 g/t Ag and 3.0 g/t Au, respectively.
  5. A density of 2.4 g/cm³ was used.
  6. The silver equivalent equation is AgEq = g/t Ag + 63.97 * g/t Au.

Qualified Person:

Luke Evans, M.Sc., P.Eng., of RPA, a Qualified Person under National Instrument 43-101, prepared the Mineral Resource estimate on which this press release is based and has approved the disclosure about the resource estimate in this press release.  The complete Technical Report supporting the estimate has been published on the Mandalay website and on

About Mandalay Resources Corporation:

Mandalay is a Canadian-based natural resource company with producing assets in Australia and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.

About Silver Standard Resources Inc.:

Silver Standard is a Vancouver-based mining company with assets throughout the Americas. It is listed on the Toronto Stock Exchange (TSX: SSO) and on the NASDAQ Global Market (NASDAQ: SSRI). Silver Standard owns and operates the Pirquitas mine in Jujuy, Argentina, which is one of the largest primary silver mines in the world. The Pirquitas mine achieved commercial production in December 2009. In 2013, the mine produced 8.2 million ounces of silver, and is expected to produce in excess of 8.2 million ounces of silver in 2014. Silver Standard also has two wholly-owned feasibility stage projects, Pitarrilla in Mexico and San Luis in Peru.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Challacollo development plan. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by forward-looking statements depending on, among other things, risks that exploration results at Challacollo may not meet management's current expectations, Mandalay's ability to secure additional financing, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 27, 2013, a copy of which is available under Mandalay's profile at Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE Mandalay Resources Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The revocation of Safe Harbor has radically affected data sovereignty strategy in the cloud. In his session at 17th Cloud Expo, Jeff Miller, Product Management at Cavirin Systems, discussed how to assess these changes across your own cloud strategy, and how you can mitigate risks previously covered under the agreement.
Countless business models have spawned from the IaaS industry – resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his general session at 17th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, an IBM Company, broke down what we have to work with, discussed the benefits and pitfalls and how we can best use them ...
Most of the IoT Gateway scenarios involve collecting data from machines/processing and pushing data upstream to cloud for further analytics. The gateway hardware varies from Raspberry Pi to Industrial PCs. The document states the process of allowing deploying polyglot data pipelining software with the clear notion of supporting immutability. In his session at @ThingsExpo, Shashank Jain, a development architect for SAP Labs, discussed the objective, which is to automate the IoT deployment proces...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessi...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...