2007-08-09 12:22 ET - News Release
Mr. Renaud Hinse reports
OPTIMIZED FEASIBILITY STUDY AND EQUIPMENT PURCHASE FOR THE ABCOURT- BARVUE PROJECT
Genivar LP of Quebec City has recently completed an optimization of its 43-101 feasibility study with Abcourt Mines Inc. on the Abcourt-Barvue project as reported in Stockwatch on Feb. 16, 2007. In addition, according to Renaud Hinse, president and chief operating officer, the buying of used mill equipment has started.
The preproduction capital expenditures (CapEx) have been lowered to $43-million compared with $67.9-million in the original feasibility study. After such a reduction in preproduction CapEx, the optimized feasibility study uses a realistic and more conservative base price of 90 U.S. cents per pound of zinc. The new price is within the sensitivity range of the original report. With that average price over the first 10 years of production, a healthy internal rate of return for the project before taxes of 20.2 per cent to 21.5 per cent, depending on the financing formula used, is achieved.
This was accomplished be preparing multiphase open-pit excavation plans to reduce overburden and waste-stripping costs at the beginning by renting open-pit mining equipment instead of buying the same and by buying used equipment for mill construction.
Under this current scenario, a flotation circuit in the mill will be constructed and operated from the start. Later, a cyanidation circuit will be added at year six to be operational from year seven to the end of year 10. Under the optimized plan, the annual tonnage of production is the same but the annual silver and zinc grades are different. However, at the end of the first 10 years, total production is the same.
These variations in grade are possible by selectively mining different parts of the orebody, given the fact that there is more zinc and less silver in the eastern half of the orebody, and more silver and less zinc in the western part of the orebody. Genivar took advantage of these variations to develop different mining and milling scenarios. This is a strategic advantage of the Abcourt-Barvue project that could be used in the future during any periods of metal price volatility.
The procurement of mill equipment is progressing well. In addition to the compressors and water treatment plant already owned by Abcourt, two ball mills have recently been purchased, and negotiations for the purchase of a crusher, conveyors, feeders, screens, flotation cells, tanks, filter etc. are well advanced. Abcourt Mines is moving forward in an aggressive manner in its quest to become a producer at its Abcourt-Barvue silver-zinc open-pit property.