|By Marketwired .||
|April 28, 2014 06:27 PM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 04/28/14 -- Xtierra Inc. (TSX VENTURE: XAG) ("Xtierra" or the "Company"), reports that it has received an updated NI 43-101 compliant resource estimate and a Preliminary Economic Assessment (PEA) on the Bilbao Project, both prepared by RungePincockMinarco (Canada) Limited (RPM).
The Bilbao Project is a polymetallic sulphide and oxide replacement silver-lead-zinc-copper deposit located approximately 500km northwest of Mexico City in the southeastern part of the State of Zacatecas.
RPM updated the previous resource model taking into account additional drilling completed in both 2012 and 2013 and coordinated and supervised various third party independent consultants to carry out various studies including: Nordmin Engineering Ltd. developed a mine design and production schedule; DRA Americas Inc. analyzed metallurgical testing and recovery methods and designed a process plant; Golder Associates carried out various environmental studies including the design of a tailings disposal facility; and Micon International Limited carried out a high level review of metal markets.
The following disclosure is based on and/or derived from the PEA. The PEA is preliminary in nature in that it includes in part inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the results projected by the PEA will be realized with further work and actual results may vary substantially. Because inferred resources are speculative, the modifying factors that are applied to assess the potential economic viability of the project are also speculative.
Exploration and Drilling
RPM, after reviewing the extensive work previously completed and the large amount of information generated, recommended extending the scope of the previously completed infill drilling program by a minimum of four holes and assaying historical core in strategic locations.
Six infill holes were drilled in June 2013, completing an additional drilling campaign in the southern part of the silver-zinc-lead project. This drilling followed a 10 hole, 2032 metre infill drilling campaign during the third quarter of 2012.
Since 2006, Xtierra has drilled 113 diamond drill-holes in the Bilbao deposit. All of the drill-holes are diamond NQ-HQ core holes with most (104) being vertical. The drill campaigns defined a general grid of 50 m by 50 m and a tighter drilling grid of 26 holes defining a 35 m by 35 m in the high grade core. The drilled zone extends over an area of 530m along north-south axis and 580m along east-west axis.
Mineral Resource Estimates
The new Zn/Pb/Ag/Cu resource estimation of the Bilbao deposit was prepared by RPM to incorporate new drilling information acquired during 2011-2013. The geological model was generated using 113 holes (all the logged drill holes). The block resource model was estimated using 105 holes which had assays. A lithology model was built and Indicator and Ordinary Kriging (OK) were used to estimate Zn, Pb, Ag and Cu resources. Density measurements were updated using 224 new density determinations completed since the last 2010 model was constructed. The previous 2011 model was based on the average of 14 measurements and assigned a density of 3.6g/cc to sulphide blocks while the new 2013 model established a mean density of 3.3 g/cc for the sulphide zone.
RPM used three year trailing average prices of US$0.94 lb/Zn, US$1.01 lb/Pb and US$30.24 oz/Ag for purposes of determining cutoff grades and Zn equivalent values. Metallurgical recoveries were applied in the equivalent equation as 76.7%, 90.6% and 73.4% for Zn, Pb, and Ag, respectively. The Zn equivalent equation used is as follows: Zneq = Zn + 0.969(i)Pb + 0.09947(i)Ag.
The total resources by mineral type at 3% Zn equivalent cut-off, excluding approximately 1 million tonnes of previously mined out ore, estimated by RPM and reported in April 2014 are shown in the following table:
---------------------------------------------------------------------------- Zn equiv. Indicated Inferred Zn Ag Cu Ore Type (%) Tonnes TonnesTotal Tonnes (%) Pb (%) (ppm) (%) ---------------------------------------------------------------------------- Oxide 6.50 791,082 3,069,582 3,860,664 1.70 2.33 42 0.17 ---------------------------------------------------------------------------- Mixed 7.10 778,336 238,923 1,017,259 2.06 2.17 52 0.18 ---------------------------------------------------------------------------- Sulphide 6.88 4,555,809 1,201,032 5,756,841 2.03 1.40 69 0.17 ---------------------------------------------------------------------------- Total 6.76 6,125,227 4,509,537 10,634,764 1.91 1.81 58 0.17 ----------------------------------------------------------------------------
The previous resource estimation was originally carried out by Richard Parker Consulting Geologist in 2011 and included 84 drill holes. The resources reported in 2011 (including both oxide and sulphide) were 10,617,891 tonnes @ 6.48% Zneq in the Indicated category and 430,000 tonnes @ 5.19% Zneq in the Inferred category. (Technical Report dated April, 2011 entitled "Geology and revised Minerals resources of the Bilbao Silver-Lead-Zinc Deposit - State of Zacatecas, Mexico" by RTG Parker, Consulting Geologist).
Net Smelter Return Cut-off Value
The Net Smelter Return (NSR) cutoff value of US$45.21 per tonne of ore used for the Bilbao Project stope tonnes and grade determination is based on direct mining, processing and G&A costs.
Potentially Mineable Resource
The potentially mineable underground resource is estimated by RPM to be 5.2M tonnes at grades of 2.10 % Zn, 1.40 % Pb and 63.96 grams Ag per tonne. The tonnes and grade include an average dilution of 10 percent, at zero grade, as well as mining losses of 5%. The RPM PEA relies on Indicated Mineral Resources (approximately 75 percent of the total resource tonnes) as well as Inferred Mineral Resources (approximately 25 percent of the total resource tonnes).
Mine Design and Production Planning
The current mine plan incorporated in the PEA targets the extraction of the sulphide zone only given the results of the metallurgical test work on the oxide and transition zones completed to date.
The mine production schedule is based on a production rate of 2,000 tpd of potentially economic mineralization, or 720,000 tonnes per year. This provides for a mine life of approximately 8 years, mining out the resources available.
Underground mining methods will be used to access the sulphide zone located approximately 50 meters below surface, and accessed via a portal and ramp system. The main access to the underground mine will be via a main ramp from surface to the 1860 Level.
The main proposed mining method is Longhole Open Stoping using downholes, while near the top of the deposit Longhole Open Stoping using upholes will be employed. Longhole stopes will be backfilled with a cemented rock fill.
Based on the selected mining method a dilution factor of 10% is applied which allows for dilution from hanging and footwall wall exposures and cemented backfill dilution which results from blasting against backfilled stopes. Mining recovery of 95% is assumed for this deposit.
The mineral processing plant described is for the treatment of a silver-lead-zinc sulfide ore at a design throughput rate of 2,000 t/d. The mineral processing plant will produce lead-silver and zinc concentrates which will be transported off-site.
The process flow sheet selected for the Bilbao process plant comprises two stages of crushing, two stages of grinding, lead rougher flotation, lead regrind, lead cleaner and lead concentrate and dewatering stages, zinc rougher flotation, zinc regrind, zinc cleaner flotation and zinc concentrate and dewatering stages.
The plant will be capable of processing 720,000 tonnes per year with an average grade of 2.1%, 1.4% and 63.96 g/t of zinc, lead and silver respectively. The plant has an operating regime of 360 days per year, 7 days per week, 24 hours per day and a plant utilization of 92%, resulting in an average nominal throughput of 91 tonnes per hour.
The plant will produce, on average, 16,913 dry tonnes per year of silver-rich lead concentrate, and 26,966 dry tonnes per year of zinc concentrate. Plant recovery is estimated to be 76.7% for zinc, 90.6% for lead and 73.4% for silver over the life of the mine.
Capital and Operating Costs
Project capital costs, as of April 2014, are estimated by RPM to be US$99.5 million including an allowance for contingencies of US$8.7 million, equivalent to 8.8% of total capital expenditure. The capital cost outlines total pre-production capital of US$91.2 million and remaining other capital and sustaining capital costs of US$8.3 million for the eight year production life, including acquisition to replace mine equipment fleet, plant and infrastructure.
The operating expenditure is based on all development work in waste being performed by contractors, and stope development by Xtierra personnel and equipment fleets. The strategy was determined as the most cost effective for the operation and ensures sustainability of a skilled labor force. The average total unit operating cost over the life of the project is US$66.90/t of ore, including mining, processing, general and administration, freight and insurance, smelting, refining and penalty costs.
The economic analysis was completed by RPM for a 720,000 tonne per year processing plant capacity and is based on the potentially mineable underground resource of 5.2 million tonnes at grades of 2.10 % Zn, 1.40 % Pb and 63.96 grams Ag per tonne.
At the request of Xtierra, RPM has based its economic analysis of the Bilbao project on three-year average metal prices. For the three-year period ending 31 October, 2013, the rolling average prices based on LME cash buyer quotes for zinc and lead, and as reported by Kitco on www.kitco.com for silver are as follows: Zinc US$0.92/lb; Lead US$1.00/lb; and Silver US$30.38/oz.
Total revenue for the project is based on 720,000 tonnes per year production to be reached in production year 2 and continuing for the life of the project average US$73.6 million per year (gross revenue). The current plan estimates 11,000 tonnes of zinc concentrate and 7,000 tonnes of lead concentrate in the first production year.
Pre-tax earnings total US$59.9 million over the eight year mining plan to extract the Indicated and Inferred potentially minable resource. Economic results of the Bilbao Project pre-tax cash flow model indicate an Internal Rate of Return (IRR) of 13.2% and a Net Present Value (NPV) of US$11.0 million at a 10% discount rate and a NPV of US$18.7 million at an 8% discount rate. RPM considered the ten percent discount rate appropriate for this evaluation as the overall project risks are considered to be relatively low in terms of total capital committed, geological risk and market risk.
This preliminary economic assessment is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.
After-tax net cash flow totals US$32.6 million over the eight year mine plan. Economic results of the Project after-tax cash flow model indicate an IRR of 8.1% and an after-tax NPV of negative US$5.8 million at a 10% discount rate and a NPV of US$359,000 at an 8% discount rate.
RPM also developed a sensitivity analysis to the Project's IRR and NPV to +/- 15 percent changes to key assumptions in the cash flow model based on variations in key project elements of metal price, operating and capital costs. The Bilbao Project was found to be most sensitive to changes in operating costs where a 15% reduction in operating costs would result in pre-tax NPV of US$45.0 million and a pre-tax IRR of 22.0%. RPM noted that there may be opportunity to reduce operating costs significantly (approx. US$5/t to US$6/t) by reducing the number of stopes filled with backfill. With regard to changes in metal prices, the Bilbao Project was found to be most sensitive to movements in the price of silver.
Recommendations by RPM
Recommendations have been made by RPM in the PEA identifying various opportunities to increase the mineable resource and reduce operating costs through additional exploration and engineering, improving the overall economics of the project. RPM recommendations include:
-- Additional definition drilling targeted at the Bilbao transition and sulphide zones could lead to re-classification of inferred resources to indicated resources, potentially contributing to the total mineable resource studied at the pre-feasibility level; -- The potential to increase level spacing and correspondingly reduce level development, through use of cable bolts, may lead to lower mine development costs and should be further assessed; -- Further analysis of hydraulic and sand backfilling options, in terms of preparation and distribution, may further reduce overall operating costs; -- There may also be opportunity to reduce operating costs significantly (approx. US$5/t to US$6/t) by reducing the number of stopes filled with backfill all together. Further geotechnical study would need to be carried out for this scenario to better understand possible ore losses with pillars left in place, and possible recovery of these pillars through caving activity. Potential also exists for deferral of ramp and associated development; -- Inclusion of transition zone material in the mine plan should be investigated (requiring additional metallurgical testwork) to extend the life of mine and/or potentially increase the mining rate per year; -- Further optimization of stope sequencing could lead to improved cash flow and should be studied; -- Exploration drilling at the Bilbao 2 area, approximately 1.5 km south of Bilbao, has potential to offer additional mineral resources to the project due to the fact that current trenching, sampling and resulting soil geochemistry information identifies similarities between the two areas. An additional source of feed to the designed plant could lengthen the overall life of the mine, increase the daily production rate, or result in a combination of the two, improving the NPV and IRR of the project.
RPM noted that the Bilbao deposit contains a reasonable quantity of mineral resources between the oxide, transition, and sulphide mineral zones; however, the lack of metallurgical test data available for the transition zone and identified recovery challenges for the oxide zone currently limit the scope of this PEA to the total mineable sulphide resources to offset the capital costs associated with the project.
A Technical Report in compliance with NI 43-101 has been filed on SEDAR.
Having now received the completed Preliminary Economic Analysis for the Bilbao Project from RPM, the Company's focus going forward is to seek alternatives to maximize the value of Bilbao including seeking to develop Bilbao either alone or in joint venture with a partner or through corporate transactions.
RPM have made numerous recommendations throughout the PEA identifying various opportunities to increase the mineable resource and reduce operating costs through additional exploration and engineering, improving the overall economics of the Bilbao project.
Further metallurgical test work on the oxide ore to optimize economic metal recoveries, including the recovery of lead by means of gravity separation, has shown some promise and further metallurgical test-work on the oxide ore should be undertaken.
The continuing operations of the Company are dependent upon its ability to raise adequate financing and additional funding will be required for working capital, optimisation and feasibility studies, further exploration and for financing in the longer term to develop the Bilbao project.
This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this release.
For further information visit www.xtierra.ca.
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera M...
Sep. 27, 2016 11:45 PM EDT Reads: 2,958
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
Sep. 27, 2016 10:45 PM EDT Reads: 3,395
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said “No to LUNs.” With Tintri they mana...
Sep. 27, 2016 10:45 PM EDT Reads: 2,841
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
Sep. 27, 2016 10:30 PM EDT Reads: 2,178
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Sep. 27, 2016 09:30 PM EDT Reads: 2,961
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Sep. 27, 2016 09:30 PM EDT Reads: 484
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Sep. 27, 2016 08:30 PM EDT Reads: 2,044
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Sep. 27, 2016 08:15 PM EDT Reads: 2,234
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Sep. 27, 2016 07:00 PM EDT Reads: 2,868
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
Sep. 27, 2016 06:45 PM EDT Reads: 1,820
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Sep. 27, 2016 06:30 PM EDT Reads: 3,571
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Sep. 27, 2016 06:30 PM EDT Reads: 2,211
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
Sep. 27, 2016 06:15 PM EDT Reads: 418
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Sep. 27, 2016 06:00 PM EDT Reads: 1,702
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 27, 2016 05:45 PM EDT Reads: 1,667