Brisbane, Nov 12, 2008 (ABN Newswire) - The Directors of Republic Gold Limited (ASX:RAU) today announce that the Company has increased the total Mineral Resources at the Amayapampa Gold Project in Bolivia ("Project") from 720,000 ounces to 1,084,000 ounces. This increases the Company's total Mineral Resources base to 1,582,000 ounces from the previous estimate of 1,218,000 ounces.
The Company is upgrading the Mineral Resources base at the Tregoora and Northcote Gold Projects in FNQ and will do a further resource update at Amayapampa upon completion of the current drilling programme. The Company is targeting total Mineral Resources of 2,000,000 ounces from these increases. Details of the new Mineral Resources can be found below.
Republic Gold Limited (ASX:RAU) John Kelly MD on Amayapampa Gold Resource Upgrade To Over One Million Ounces
Link To Audio:
http://abnnewswire.net/alnk/8K584RU9
Key Points
- The Amayapampa Gold Project has an upgraded estimated total Mineral Resources of 1,084,000 ounces of gold, at a cut-off grade of 0.6 g/t Au; an increase of 50%.
- 62% of these new Mineral Resources are in the high quality measured and indicated categories that are used for ore reserve estimations.
- The Company believed when it purchased the Project that the previous Mineral Resources were conservative, given the current gold price environment. The previous Mineral Resources were calculated when the gold price was less than US$350 per ounce and excluded many zones of lower grade mineralisation. The figures on page 9 show the potential for further increases.
- With the many current predictions of a sustained, near-future gold price in the vicinity of US$1,000 per ounce, the value of the Project will be significantly higher at these levels. Preliminary cash flow calculations indicate that the Project is very robust at the current gold price.
- At higher gold prices, the current Mineral Resources cut-off grade of 0.6 g/t Au may be able to be lowered, thus increasing the Mineral Resources.
- Drilling continues at Amayapampa and it is hoped that the results of this drilling will both improve the quality of the Mineral Resources and the quantum.
- The Amayapampa Bankable Feasibility Study is progressing well, with a preliminary design being completed for the new tailings dam location.
- The new Mineral Resources provide ample scope for extending the Project's scale & mine life.
- With the commencement of the surface channel sampling and shallow grade control drilling programme the Project moves into the Pre-Construction Phase.
- Chinese financiers are keen to visit the Project, with a visit being organised for one group in the next few months.
- The Company's total Mineral Resources base is now 1,582,000 ounces of gold plus 8,000 tonnes of antimony.
Republic's Managing Director; John Kelly, said:
"The Company has expended a significant effort on Amayapampa and this increase is the result of a lot of hard work by the Company's Australian and Bolivian employees and consultants. In my recent visits to Bolivia and to the Project there is increasing support for the Project as the reality of employing 280 people from the local communities on a full-time basis is recognised. It is particularly pleasing that the Government of Bolivia is providing very active and hands-on support to the Company. We still have a number of tasks outstanding, but the spectre of a bigger and a longer life project will only strengthen this support. The Company is in the process of organising a trip of potential financiers for the project from China. If this trip is successful then the Feasibility Study progress might be able to be greatly accelerated".
Mineral Resources Upgrade Details
The previous published Mineral Resource for Amayapampa totalled 16.1 million tonnes at a grade of 1.4 g/t Au, for a total of 720,000 ounces of gold, excluding an allowance for historical mining.
The cut-off grade for these Mineral Resources was 0.4 g/t Au. Some time ago the Company remodelled this resource using techniques it believed were appropriate for this style of deposit given the Company's extensive experience with orogenic, sediment-hosted gold deposits. The resultant unpublished Mineral Resources produced a result broadly in line with the published Mineral Resources of 720,000 ounces. This gave the Company confidence that the published Mineral Resources were reasonable estimates.
The new Mineral Resources are 26.2 million tonnes at a grade of 1.23g/t Au, including an allowance for historical mining. The cut-off grade for these Mineral Resources is 0.6 g/t Au, which compares to a cut-off grade of 0.5 g/f Au for the Company's oxide mineralisation in FNQ. The use of this higher cut-off grade is considered conservative until the Bankable Feasibility Study firms up the cost base of the Project. Once this is done the cut-off grade may be lowered with an attendant increase in the Mineral Resource. Much of the increased tonnage lies along the eastern side of the mineralised body and is in the inferred category due to the drillhole spacing being insufficient to move this material into the higher confidence categories. The current drilling programme will provide a greater density of drill coverage, as many holes are being drilled from the western side of the hill, but further drilling will be needed to move a large portion of this material into the higher confidence categories.
The new Mineral Resources estimate has included a number of lower grade intersections that had been previously excluded from the resource estimates. The inferred portion of the resources reflects geologically continuous mineralisation and has a reasonable probability of being economically viable. Inferred resources as defined by the North American consultants in previously published Mineral Resources have been severely restrictive. The Company believes its approach is entirely appropriate and is in line with the resource estimates for the Company's FNQ projects.
The current surface channel sampling and shallow drilling programmes will enable the near surface material to be upgraded in confidence. Given the close spacing of this programme this should mean that the initial 15 to 20 vertical metres of the mineralisation will probably be able to be nearly all categorised as measured. This sample spacing will effectively mean that the first 10 vertical metres of the mineralisation will be grade controlled to allow for immediate mining. This is the first step in the next phase for the Project where it will move into the Pre-Construction Phase.
In remodelling the Mineral Resources, the Company and its Independent Resource Consultant have had to be careful in the treatment of the numerous very high grade underground channel samples.
The best underground channel samples are 5 metres at 127.1 g/t Au and 20 metres at 40.6 g/t Au. These are part of a suite of better than 10 g/t Au, mostly 5 metre intervals, which are spatially well represented over a 400 metre strike length and 150 metre depth. The Company ensures the high grade components of its estimates are low risk through rigorous geostatistical assessment.
The global mean grade of these new Mineral Resource estimates is on par with previous estimates yet a more conservative grade top-cut of 15.5 g/t Au is employed compared to the previous top-cut of 40 g/t Au.
Current Political Situation and Inward Investment into Bolivia
Over recent months, Bolivian politics has seen its normal ups and downs. None of the more problematic incidents have had any adverse impact on the Company's activities or the Project. On a very positive note, the Company's employees at the Project defied a request from their national union to march to La Paz a few weeks ago to support the Government's activities. Their loyalty to the Project that has been engendered by the full-time Training Programme is very evident.
As the Company has previously reported, there is continual and significant inward investment into Bolivia, mainly from North American companies. Coeur d'Alene Mines Corp. has recently commissioned its US$174M San Bartolome Silver Project in Potosi. Apex Silver Mines Limited has been operating its +US$900M San Cristobal Silver Project for approximately 12 months. In 2006, Atlas Precious Metals Inc. signed a joint venture contract with the Bolivian state mining company, COMIBOL, to put into operation the Karachipampa smelting complex with Atlas proposing an investment of US$141M. Eighteen months ago Jindal Steel and Power Ltd. from India announced a +US$2B deal with the Bolivian Government for the El Mutun iron ore project.
The following link provides for interesting reading on mining investments in Bolivia. It is a very recent article written by Christopher Ecclestone who is a strategist at Hallgarten & Company LLC, a New York based macroeconomic and equities research firm specialising in Latin American mining.
http://seekingalpha.com/article/99566-bolivia-a-blizzard-of-misinformation-on-mining-and-everything-else
The Company continues to actively pursue other mineral projects in Bolivia.
Contact
John Kelly
Managing Director
Republic Gold Limited
TEL: +61-418-577-759
Tony Nagy
TEL: +61-413-645-126
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