October 20, 2014: NGEx Resources Inc. (TSX: NGQ) (“NGEx” or the “Company”) is pleased to announce the results of a Preliminary Economic Assessment (“PEA”) on its 60% owned Los Helados Project (“Los Helados” or “Project”) located in Chile, together with an updated mineral resource estimate. Pan Pacific Copper Co. Ltd, operator of the nearby Caserones Copper Mine holds a 40% contributing interest in Los Helados.
Previously published work on the Los Helados project defined a robust resource with excellent metallurgy. The PEA builds on that strong base with a suggested mining and processing solution that indicates that Los Helados has the potential to become a large, low cost mine producing a highly desirable, clean, gold-silver rich copper concentrate for +26 years.
Los Helados Project Highlights:
- Large, robust resource, with the bulk of the mine plan derived from Indicated Resources
- A resource with a high-grade core, ideally suited to a high-tonnage block cave operation – a standard mining practice in Chile
- A mine plan that provides early production from the higher grade core, while providing options for increased mine life though cutoff grade optimisation in later years
- Application of proven SAG Mill / Ball Mill and Flotation process design
- Excellent metallurgy yielding high-grade copper concentrate, with high copper and gold recoveries
- Scalable production – the deposit, mining method, and process design supports production up to 130,000 tonnes/day
- Average annual production of 115,000 tonnes of copper, 133,000 ounces of gold, and 675,000 ounces of silver at the higher production rate
- Forecast lowest quartile C-1 costs per pound of copper net of by-products
- Long mine life +26 years depending on production rate
- Strong leverage to copper price
- Clear opportunities to improve project economics by realizing potential synergies with nearby deposits.
The PEA study was prepared by AMEC International Ingeniería y Construcción Limitada (“AMEC”), under the direction of Anthony George, Project Manager (NGEx Resources). The National Instrument 43-101 Technical Report summarizing the results of the PEA will be filed on SEDAR (www.sedar.com) and on the Company’s website (www.ngexresources.com) within 45 days of this news release.
The study analyzed various mining options for Los Helados including; an open pit only, a combined open pit and underground mine, and an underground only operation. The results indicated that an underground mine utilizing block caving methods had the best relative valuation and this option was selected as the basis for the PEA. Further trade-off studies were undertaken to determine, at a conceptual level, the optimal plant throughput rates. Preliminary metallurgical testwork indicated that a single conventional semi-autogenous (SAG) mill and process configuration would be able to process approximately 65,000 tonnes per day (“t/d”) of Los Helados material. Accordingly, the PEA considers two throughput rates of 65,000 t/d and 130,000 t/d capacities representing a single SAG mill and a double SAG mill and process configuration.
PEA Summary
| 130,000 t/d Option | 65,000 t/d Option | |
| Pre-Tax NPV (8%) & IRR |
$923 million NPV 10.8% IRR |
$723million NPV 10.4% IRR |
| After-Tax NPV (8%) & IRR |
$429 million NPV 9.4% IRR |
$324 million NPV 9.2% IRR |
| Metals Prices |
$3.25/lb Cu $1,300/oz Au $21.50/oz Ag |
$3.25/lb Cu $1,300/oz Au $21.50/oz Ag |
| Initial Capital Expenditures | $4.3 billion | $3.1 billion |
| LOM Sustaining Capital Expenditures | $1.3 billion | $1.3 billion |
| LOM C-1 Cash Costs (net of by-product credits) | $1.10/lb Cu sold | $1.13/lb Cu sold |
| Nominal Mill Capacity | 130,000 t/d | 65,000 t/d |
| Mine Life | 26 years | 37 years |
| LOM Average Annual Metal Production |
115,000 t Cu 133,000 oz Au 675,000 oz Ag |
81,000 t Cu 93,000 oz Au 474,000 oz Ag |
| LOM Average Process Recovery |
89.4% Cu 80.2% Au 51.0% Ag |
89.4% Cu 80.2% Au 51.0% Ag |
* All figures reported are in 2014 US dollars and on a 100% Project and 100% equity basis valuation. A US dollar (USD) to Chilean Peso (CLP) exchange rate of 500 CLP = 1 USD was used for all cost estimates.
Note: The reader is advised that the PEA study results in this press release are only intended to provide an initial, high-level summary of the project. The PEA is preliminary in nature and includes the use of inferred mineral resources which 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 PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
“This PEA is an important step in the evolution of Los Helados, from exploration project, to potential mine. Our previous work defined a robust resource with excellent metallurgy. The PEA builds on that strong base with a suggested mining and processing solution that indicates that Los Helados has the potential to become a large, low cost mine producing a highly desirable, clean, gold-silver rich copper concentrate for 26+ years. In our view, the key outcomes of this study are a clear well defined solution utilising a solid, standard mining method and an industry accepted processing flowsheet. In addition to working on Los Helados, exploration remains an important aspect of the NGEx business model and we are confident that we can continue to add to our resource base through exploration on our other projects,” commented CEO Wojtek Wodzicki.
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For the complete release see attached file.
For further information, please contact: Sophia Shane, Corporate Development (604) 689-7842.
