Extensive sampling and metallurgical test work was undertaken on the deposit to define the most suitable base metals recovery technology into which the silver reports. Bench batch scale, open circuit and locked cycle, flotation test results indicate that a conventional differential flotation process provides the best performance for recovery and grade. Locked cycle tests were performed under the proven differential flotation flowsheet by Maelgyn Minerals Services Africa, an accredited laboratory. The results were used as the metallurgical input data for the economic evaluation conducted on the project. Four metallurgical programs have been completed. Additional testing was carried out to establish the concentrates filtration rate, tailings settling characteristics and cemented paste backfill preparation technologies.
The completion of the Feasibility Study marks an important milestone in the development of the Pulacayo-Paca Project. The next important step for the Company will be the completion and submission of the Environmental Impact Assessment (ESIA) Report as part of the Project's permitting process. The submission of this report to the Bolivian Ministry of Mother Earth is expected before the end of first quarter 2013. With the completion of the Feasibility Study, the Company will now progress financing discussions both in Bolivia and abroad.
The Company expects to file the full NI 43-101 compliant technical report (Feasibility Study report) on the SEDAR profile of the Company at www.sedar.com in respect of the Pulacayo Deposit within 45 days of this press release. A corresponding press release will be issued when that filing has been made.
Notes to this press release
1. All currency figures are expressed in US dollars, unless noted otherwise2. Please see caution regarding forward looking information3. Base silver prices for the feasibility economic study are the three-year trailing average of Ag $28/oz at Nov 30, 2012. A lead price projection of $0.89/lb and $1.00/lb for zinc was used; both projections are based on an independent review conducted by Exen Consulting Services of Ontario, Canada and TWP.4. The application of "silver equivalent ounces", or silver equivalent (oz AgEq.(1)) means the US dollar value of lead & zinc metals divided by the price of silver and added to the pure silver ounces in any applicable category. Unless otherwise indicated, all economic calculations are done using metal prices discussed in Note 3; where operating costs per oz AgEq are quoted, equivalent ounces refer to equivalent ounces produced after mining and processing modifying factors. The calculation for lead equivalent ounces is Lead AgEq. = (Lead Tonnes x 2204lbs/t x $0.89/lb) / $28oz and for zinc equivalent ounces is Zinc AgEq. = (Zinc Tonnes x 2204lbs/t x $1.00/lb) / $28oz5. Due to the inclusion of royalties in cash costs per ounce, cash costs increase or decrease as the price of silver fluctuates up or down. Government imposed royalties include a 6% export royalty on all silver metal exported, 5% export royalty on lead & zinc metal exported, apart from an additional 2.5% of NSR to COMIBOL (Corporacion Mindera de Bolivia), and 1.5% of NSR to the Pulacayo Cooperative. Royalties are exclusive of amortization, reclamation, capital, and exploration and development costs.6. Net Smelter Return (NSR) is the gross revenue (total revenue minus production costs) that the owner of a mining property receives from the sale of the mine's metal/non metal products less transportation and refining costs. It does not include royalties. Unless otherwise indicated, all NSR calculations are done using metal prices in Note 3.7. The pre-production and sustaining capital costs do not include the salvage value of plant and equipment.8. G & A cost means general and administrative costs and includes items such as administration, labour, accommodation, safety, training, office, legal, material transport and other third party services costs.9. Cash operating costs per ounce represent the mine site operating costs such as mining, processing, metal transport, refining, administration, and government imposed royalties(14).10. Government imposed royalties due, namely 6% export royalty on all silver metal exported, 5% export royalty on lead & zinc metal exported, value due 2.5% of NSR to COMIBOL (Corporacion Mindera de Bolivia), 1.5% of NSR to the Pulacayo Cooperative and are exclusive of amortization, reclamation, capital, and exploration and development costs. Due to the inclusion of royalties in cash costs per ounce, cash costs increase or decrease as the price of silver fluctuates up or down.11. Modeling was performed using Gemcom Surpac® 6.3 modeling software with silver, lead and zinc grades estimated independently by inverse distance squared (ID2) interpolation from 1.0 meter down hole assay composites capped at 1500 g/t, 15 %, and 15 % respectively. Block size was 5 meters (x) by 3 meters (y) by 3 meters (z) with one unit of standard sub- blocking allowed. Block model results were checked using ordinary Kriging and Nearest Neighbour interpolation methods.12. A bulk density model was interpolated by ID2 methodology from 1.0 meter down hole bulk density composites using the grade interpolation parameters for each metal.13. Mineral Resource estimate (Table 4) values for the blocks occurring within the sulphide zone were determined by means of a net smelter calculation using a 36 month trailing average silver price of $25.00 USD/oz and prices of $0.89 USD/lb lead and $1.00 USD/lb zinc.14. Open pit resources to an elevation of 4159m ASL (top of crown pillar) were determined within a Whittle optimized maximum NPV pit shell utilizing $1.80 USD/tonne mining cost, $1.60 USD/tonne surface haulage cost, $2.50 USD /tonne G&A, and $19.00 USD/tonne and $9.10 USD/tonne respectively for oxide and sulphide processing costs. Pit slopes varied from 42 to 43 degrees. In the pit optimization process, only silver derived NSR values were used in the oxides, while silver, lead and zinc derived NSR values were used in the sulphides.15. The estimation of the Probable Mineral Reserve was conducted by TWP under the supervision of Qualified Person Professor J. Porter and includes modifying factors including and NSR cutoff of US$ 70/t, 2% mining dilution, 2% mining loss, 2% lashing loss and 5% void loss due to historical mining. A silver price of US$25/oz, lead US$0.89/lb, and zinc US$0.89/lb was used in the determination of the NSR of mining blocks. Professor Porter is independent of Apogee.16. The Company is not aware of any imminent undisclosed risk could materially affect development of the reserve. The development of the mineral reserve nevertheless could be affected by risks including possible delays to environmental permitting, legal risks, lease title rights risks, potential changes to taxation and royalty laws, possible sociopolitical unrest, potential marketing challenges, or other relevant issues.