HASBROUCK HEIGHTS, N.J., May 22, 2012 (GLOBE NEWSWIRE) -- All Grade Mining (OTCBB:HYII), a development-stage company focused on the extraction of iron ore, today announced positive results for the feasibility study that the Company has completed on its Salitrosa Iron Project in Chile. The purpose of the study is to determine the technical feasibility and economic desirability of the design, manufacture, install and operation of a plant to produce 50,000 tons/month of iron ore on the site of its Salitrosa Project.
The valuation of the processes of exploitation of this project was carried out taking into consideration the processing of 300,000 tons/month of base material for 50,000 tons/month of iron concentrate to a grade of 63.5%. The feasibility study considers the costs of extraction and production of iron ore, not the cost of transfer to the ports of shipment, due to the unknown location and distances. The logistics of exporting iron are in the process of being planned by the company, which currently has multiple options.
Revenues of the project were calculated based on monthly sales projected at the price of the concentrate ore given the law of the product and to the exchange rate prevailing at the date of the evaluation. The parameters that were taken into consideration at the time of the evaluation are as follows:
| Sales volume: | 40,000 tons/month |
| Price of the Concentrated of Iron: | $75 USD/ton |
| Law of the iron ore concentrated: | 63% |
| Exchange Rate: | $500 USD/ton |
| Quarterly Increment in the sales: | 5% |
| Horizon of Planning of the project: | 10 years |
With the parameters above, the study projected revenues of approximately $388 million over the next 10 years starting with an estimated $36 million in revenue the first year commencing production. Other factors that can affect revenues include the planning horizon of the evaluation, commodity prices, financing, extraction costs and increases in production and sales. Additionally, the company intends to increase its mining production capacity to 150,000 tons a month within the next year.
The plant is designed to operate at sites with a high content of magnetite and hematite in clay lick, with particle sizes between input 8" and 10", so it is necessary to have two or three stage crushing to achieve particle sizes close to 6 mm to start the process of magnetic selection. The site has a law expected minimum of 35% and 40% magnetite and assuming a ratio of 6:1 Sterile/Mineral (S/M) and considering a continuous period of 504 monthly duty (h), we estimate a minimum processing horizon of 300,000 tons/month of base material to produce 50,000 tons/month iron with a minimum of 63.5% law.
The deposit is expected to be operated by two open pits, one to exploit the mineralization detected in the west bank, where the iron is detected in the form of magnetite mixed with hematite, and another to remove the iron found in the eastern fringe which is Magnetite as sulfide mixed with copper mineralization and Chalcopyrite. The mineralization of the middle strip will be addressed later through the reach of primary pits.
"We are very encouraged with the results of our feasibility study of Salitrosa which highlights the existence of 40 million metric tons of iron ore within the property, which would be worth $5.76 billion at today's prices. The study was designed to provide an engineering and economic assessment of the viability of this project and, more specifically, the construction of a plant with the goal of producing 50,000 tons/month of iron ore and these results clearly demonstrate the solid economics of this project," commented CEO of All Grade Mining, Gary Kouletas.
"These positive results further validate our expectations while providing independent confirmation that the Salitrosa project will support a low-risk and economically robust iron ore mine. With costs of production and equipment being finalized in the coming weeks, we are very excited to move forward in the development and production of this property."
About All Grade Mining, Inc.
All Grade Mining is a development-stage company whose mission is to acquire mining concessions in all phases, sizes and minerals. The Company is currently focused on the extraction of iron ore in South America, primarily in Chile, and has established an experienced team of executives and mining professionals to lead its exploration and excavation efforts.
For more information please visit: www.AllGradeMining.com.
Safe Harbor Statement
This release includes forward-looking statements, which are based on certain assumptions and reflects management's current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of these factors include: general global economic conditions; general industry and market conditions, sector changes and growth rates; uncertainty as to whether our strategies and business plans will yield the expected benefits; increasing competition; availability and cost of capital; the ability to identify and develop and achieve commercial success; the level of expenditures necessary to maintain and improve the quality of services; changes in the economy; changes in laws and regulations, including codes and standards, intellectual property rights, and tax matters; or other matters not anticipated; our ability to secure and maintain strategic relationships and distribution agreements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.