VANCOUVER, May 14, 2013 /PRNewswire/ --
Shares Outstanding: 62,738,850
Kootenay Silver Inc. (TSX VENTURE: KTN.V) ("Kootenay" or
the "Company") is pleased to announce that an updated resource
estimate prepared by SRK Consulting (U.S.) Inc. of Lakewood, Colorado ("SRK") incorporating the
gold content contained into the mineral resources of its flagship
Promontorio Silver Project, due to new metallurgical data and
information which supports recovery of gold. This updated
resource estimate does not incorporate any drilling completed since
the resource estimate announced August 21,
2012.
Resource Statement
The open pit mineral resources for the Promontorio Project are
comprised of an estimated 44,504,000 tonnes grading an average of
64.32 gpt silver equivalent ("AgEq") classified as Measured and
Indicated Mineral Resources, with an additional 14,564,000 tonnes
grading an average of 51.95 gpt AgEq classified as Inferred Mineral
Resources. This resource is stated above a 20.00 gpt AgEq cut-off
grade and is contained within a potentially economically mineable
pit shell.
Underground mineral resources are approximately 215,000 tonnes
grading an average of 56.96 gpt AgEq classified as Measured and
Indicated Mineral Resources, with an additional 1,265,000 tonnes
grading an average of 61.17 gpt AgEq classified as Inferred Mineral
Resources. This resource is stated above a 45.00 gpt AgEq cut-off
grade to reflect the higher mining costs expected to be associated
with underground production.
The updated Measured and IndicatedResource
contains an estimated 92,035,000 oz AgEq with another
24,326,000 oz AgEq categorized as Inferred,
summarized in Table 1:
Table 1: Resource
Statement for the Promontorio Deposit, Sonora State, Mexico: SRK Consulting (U.S.)
Inc., Effective Date March 31,
2013*
Pit-Constrained
20 gpt Avg Avg Avg Avg Avg AgEq
AgEQ Tonnes AgEq Ag Au Pb Zn Oz Ag Oz Au Oz Pb lbs Zn lbs
Cut-Off (000's) (gpt) (gpt) (gpt) (%) (%)(000's) (000's)(000's) (000's) (000's)
Measured 10,289 74.79 32.69 0.40 0.46 0.55 24,741 10,814 134 105,328 123,715
Indicated 34,215 61.18 26.30 0.34 0.38 0.45 67,294 28,926 373 287,579 335,904
M+I 44,504 64.32 27.77 0.35 0.40 0.47 92,035 39,740 506 392,907 459,619
Inferred 14,564 51.95 24.95 0.28 0.28 0.31 24,326 11,683 132 89,430 98,462
Underground Potential
45 gpt Avg Avg Avg Avg Avg AgEq
AgEQ Tonnes AgEq Ag Au Pb Zn Oz Ag Oz Au Oz Pb lbs Zn lbs
Cut-Off (000's) (gpt) (gpt) (gpt) (%) (%) (000's) (000's) (000's) (000's) (000's)
Measured 3 62.27 25.12 0.32 0.37 0.63 6 2 0 23 40
Indicated 212 56.88 22.86 0.28 0.40 0.55 387 156 2 1,889 2,551
M+I 215 56.96 22.89 0.28 0.40 0.55 393 158 2 1,913 2,591
Inferred 1,265 61.17 26.57 0.37 0.36 0.38 2,488 1,081 15 10,049 10,667
Notes:
* Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability. There is no certainty that all or any part of the Mineral Resources
estimated will be converted into Mineral Reserves.
[1] Open pit resources stated as contained within a potentially economically
minable pit shell;
[2] Pit optimization is based on assumed silver, gold, lead, and zinc prices of
CDN$31/oz, CDN$1650/oz, CDN$0.96/lb, and CDN$0.89/lb respectively, mill recoveries
of 74%, 70%, 81% and 88% respectively, a 1.5% NSR, Estimated mining costs of
CDN$1.20/t, and estimated processing and G&A cost of CDN$12.00/t; and an estimated
POX cost of CDN$2/tonne (CDN$30/tonne of pyrite concentrate)
[3] Break-even cut-off grades used were 20 gpt AgEq for open pit mill material and 45
gpt AgEq for underground material;
[4] Silver equivalency is based on unit values calculated from the above metal prices,
and assumes 100% recovery of all metals; and
[5] Mineral resource tonnage and contained metal have been rounded to reflect the
accuracy of the estimate, and numbers may not add due to rounding.
The following material changes incorporated into the updated
resource estimation contributed to the significant increase in the
mineral resource:
- Additional metallurgical test work has allowed for the
inclusion of Au in the mineral resources, which has a significant
impact on the AgEq grades and relative ounces.
- The estimated Measured and Indicated gold resources contained
within the mineralized diatreme system total 508,000 ounces with an
additional 155,000 ounces Inferred.
States Kootenay President and CEO James McDonald: "This is an exciting day for
Kootenay and its shareholders. The Company is extremely pleased
with the findings of the resource estimate and proud to be
approaching the 100 Million ounces, silver equivalent milestone.
Two key factors contributed to the success of the updated resource
estimate. First, the important addition of the gold content to the
resource has added significantly to the resource value. Secondly,
resulting from the addition of gold, the resource is now contained
in a single larger optimized Whittle Pit, as opposed to two
individual smaller pits reported in the August 21, 2012 resource estimate. We look
forward to providing a further resource update at the conclusion of
our current drill and resource expansion program."
This mineral resource estimate has been completed by Matthew
Hastings MSc, P.Geo and reviewed by Frank
Daviess, MAusIMM, RM-SME, Associate Principal Resource
Geologist with SRK. A site visit was conducted by Allan Moran, of SRK, R.G., C.P.G, who has
reviewed pertinent geological information in sufficient detail to
support the data incorporated in the mineral resource estimate. Mr.
Daviess is an Independent Qualified Person as defined under
National Instrument 43-101 ("NI 43-101") and is responsible for the
mineral resource estimate presented in this release. Eric Olin, of SRK, MSc, MBA, RM-SME reviewed the
metallurgical information contained in this release.
Drilling data includes a total of 45,118 samples from 65,092
meters of drilling. Of the 45,118 samples in the database, 22,658
lie within the wireframes and were used in the resource estimation.
Wireframes are three-dimensional closed solids constructed in
Vulcan™ and based on a combination of logged geology and assay
information. These wireframes limit the estimation.
Three-dimensional wireframes were constructed for the modeled
domains using Leapfrog 3D™ modeling software as well as Vulcan™.
SRK modeled both the Pit and NE zones independently, and corrected
inconsistencies with the Leapfrog solids using Vulcan.
The average sample length for all samples is 1.44 meters.
Samples were composited to 3 m lengths within the breccia,
stockwork, and PC zones. For the estimation, SRK used Ordinary
Kriging in the densely-drilled areas and Inverse Distance Weighting
for the areas with more widely-spaced drilling. SRK applied
appropriate block model validation techniques for a resource
estimation at this stage of project development.
Pit optimization was conducted using Whittle™ software and
evaluating the block model which was constructed in Vulcan™.
The purpose of the pit-optimization exercise is to satisfy the
conditions of "reasonable prospects for economic extraction" as
defined in the CIM Guidelines using pit shells based on a very
simple "break-even" cash flow model. These pits are not
representative of detailed mine plans or even the "best" pit design
for the Project. A cut-off for the mineral resource of 20 gpt and
45 gpt AgEq for open pit and underground potential was used
respectively.
Measured, Indicated and Inferred Mineral Resources are
categorized as Measured being where at least 3 drill holes occur
within a 25 meters ellipsoid, Indicated being where at least 3
drill holes occur within a 50 meters ellipsoid and Inferred being
where at least 2 drill holes occur within a 75 meters ellipsoid.
Blocks estimated using Inverse Distance Weighting in the
widely-spaced drilling intermediate to the two primary zones are
categorized as Inferred.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that
all or any part of the Mineral Resources estimated will be
converted into Mineral Reserves.
Mineral Processing and Metallurgical
Test Work
G&T Metallurgical Services Ltd, Kamloops, BC, Canada completed preliminary metallurgical
programs on drill core composites from the Promontorio property for
Kootenay in 2009, 2012 and 2013.
Several significant factors were noticed in SRK's review of the
metallurgical process work conducted to date. The metallurgical
program investigated a standard polymetallic sequential flotation
flowsheet that includes:
- Crushing;
- Grinding;
- Lead Flotation;
- Zinc Flotation; and
- Pyrite/Arsenopyrite Flotation
Pressure oxidation (POX) of the pyrite/arsenopyrite concentrate
is required to extract the contained gold by cyanidation.
SRK estimates metal recoveries shown in Table 2 are based on the
average results from the preliminary metallurgical test programs
conducted in 2009, 2012 and 2013. Overall gold recovery is
estimated at 70% and is based on 65% gold recovery into the pyrite
flotation concentrate followed by 94% cyanidation gold extraction
from the pyrite concentrate after pressure oxidation, plus an
average 9% gold recovery into the lead flotation concentrate.
Table 2: Metallurgical Recovery
Assumptions
Metal Product Recovery (%)
Silver Lead Concentrate 74
Lead Lead Concentrate 81
Zinc Zinc Concentrate 88
Gold Pyrite Concentrate 65
Gold Lead Concentrate 9
Gold Overall * 70
* Includes 94% cyanidation extraction from pyrite concentrate + gold contained in
lead concentrate
QA/QC
The majority of holes were drilled with HQ sized diamond drill
core with some sections reduced down to NQ sized core. Core samples
were cut using a core saw with 1 to 2 meter long sample intervals.
A select few holes drilled using reverse circulation methods were
included in the resource estimation, but generally in the areas of
more widely-spaced drilling between the two primary zones. Further
Quality Assurance and Control procedures and details on assays are
disclosed on the Kootenay Silver Inc. website.
SRK, with inputs from Kootenay on specific sections, will be the
author of an NI 43-101 Technical Report on the Mineral Resource
Estimate for the Promontorio Project, to be filed within 45 days of
this release.
The foregoing geological disclosure has also been reviewed and
verified by Kootenay's CEO, James
McDonald, P.Geo (a qualified person for the purpose of NI
43-101, Standards of Disclosure for Mineral Projects). Mr. McDonald
is a director of Kootenay.
ABOUT KOOTENAY
Kootenay Silver Inc. is actively developing mineral projects in
the Sierra Madre Region of Mexico
and in British Columbia, Canada.
Its flagship property is the former producing Promontorio Silver
mine in Sonora State, Mexico.
Kootenay's objective is to develop near term discoveries and
long-term sustainable growth. Its management and technical team are
proven professionals with extensive international experience in all
aspects of mineral exploration, operations and venture capital
markets. Multiple, ongoing J/V partnerships in Mexico and Canada maximize potential for additional, new
discoveries while maintaining minimal share dilution.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this release.
Cautionary Note to US Investors: This news release may
contain information about adjacent properties on which we have no
right to explore or mine. We advise U.S. investors that the SEC's
mining guidelines strictly prohibit information of this type in
documents filed with the SEC. U.S. investors are cautioned that
mineral deposits on adjacent properties are not indicative of
mineral deposits on our properties. This news release may contain
forward-looking statements including but not limited to comments
regarding the timing and content of upcoming work programs,
geological interpretations, receipt of property titles, potential
mineral recovery processes, etc. Forward-looking statements address
future events and conditions and therefore involve inherent risks
and uncertainties. Actual results may differ materially from those
currently anticipated in such statements.
This press release uses the terms "Measured", "Indicated", and
"Inferred" resources. United
States investors are advised that while such terms are
recognized and required by Canadian regulations, the United States
Securities and Exchange Commission does not recognize them.
"Inferred Mineral Resources" have a great amount of uncertainty as
to their existence, and as to their economic and legal feasibility.
It cannot be assumed that all or any part of an Inferred Mineral
Resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred Mineral Resources may not form the
basis of feasibility or other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral
Resources will ever be converted into Mineral Reserves.
United States investors are also
cautioned not to assume that all or any part of a Mineral Resource
is economically or legally mineable.
Forward-Looking Statements: The information in this news
release has been prepared as at May
13 2013. Certain statements in this news release, referred
to herein as "forward-looking statements", constitute
"forward-looking statements" under the provisions of Canadian
provincial securities laws. These statements can be identified by
the use of words such as "expected", "approaches", "approaching",
"may", "will", "look forward" or similar terms.
Forward-looking statements are necessarily based upon a number
of factors and assumptions that, while considered reasonable by
Kootenay as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Many factors, known and unknown, could cause actual
results to be materially different from those expressed or implied
by such forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date made. Except as otherwise required by
law, Kootenay expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any such statements to
reflect any change in Kootenay's expectations or any change in
events, conditions or circumstances on which any such statement is
based.
For further information:
James McDonald, CEO and
President at +1-403-238-6986
Investor Relations at +1-604-601-5652; 1-888-601-5650
or visit: http://www.kootenaysilver.com
