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The resource estimate is based on validated results of 69,739 meters of diamond drilling and 606.34 meters of surface trenching carried out by Apogee Silver through various programs between 2006 and 2012. This includes 226 surface drill holes, 42 underground drill holes and 6 surface trenches.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The probable mineral reserve which constitutes 57% of the Underground Indicated Mineral Resource and 21% of the estimated Total Indicated Mineral resource, is set out in Table 5 below.
Table 5 - Mineral Reserve Summary as of December 11, 2012(15,16)----------------------------------------------------------------------------Probable Mineral Ag Pb Zn Ag (ozReserve(tonnes) (g/t) (%) (%) Ag (oz) agEq.)(3) Pb (t) Zn (t)----------------------------------------------------------------------------3,557,683 239 1.09 1.91 27,385,190 35,457,378 38,927 67,905----------------------------------------------------------------------------
Mining
The mining strategy adopted for the Pulacayo deposit has accommodated the complexity of the stockwork of veins, the exceptionally weak geotechnical condition of the ore and the existence of some 100 years of planned and unplanned mining activities. Considerable execution risk has been mitigated through the adoption of a highly selective mining method. Furthermore, a conservative approach to the production build up that considers stope redundancy necessitated by the potential intersection of unplanned voids during stope development was considered. Together with the risk assessment, the strategy optimises capital investment in proportion to the mining production plan.
The mining method employed is predominantly mechanised, underhand cut and fill mining using longhole drilling and a cemented paste backfill. Limited conventional shrinkage stoping is also employed on the top level. Access is by means of spiral ramp systems from surface together with the existing underground infrastructure.
Processing and metallurgy
The design of the concentrator plant is modular (500 t/d each, 2 modules), each circuit is conventional with a single ball grinding mill and a differential lead and zinc flotation circuit, followed by concentrate pressure filtration to produce final lead and zinc concentrates. The results of the locked cycle tests were used to create a grade-recovery prediction model, which was applied to the range of feed grades over the life of mine. The average life of mine feed grades and their predicted recoveries are shown in Table 6 below. Further testing to improve silver recoveries will be conducted.
Table 6 - Predicted Recovery on Average LoM Plant Feed Grade---------------------------------------------------------------------------- Lead Zinc Circuit Lead Circuit Zinc Overall Silver Feed Floatation Feed Floatation Plant Concentrate Grade in Grade Recovery Grade Recovery Recovery Grade Concentrate % % % % % % g/t----------------------------------------------------------------------------Silver g/t 240 68.5 77 18.2 74.34Lead % 1.1 85.6 0.16 22.4 88.86 48 8,382Zinc % 1.92 7.6 1.81 86.8 89.43 51 454----------------------------------------------------------------------------
