San Luis is a 100% owned project, located in the Ancash Department, central Peru. The Company acquired the remaining interest in the Project, held by joint venture partner Esperanza Resources Corp., in the third quarter of 2011. The San Luis Project is centered on a high-grade, gold-silver vein, the Ayelén Vein, which was discovered in 2005. The Project is approximately 25 kilometers northwest of Barrick Gold Corporation's Pierina gold mine.
A feasibility study on the San Luis Project was completed in the second quarter of 2010. Highlights of the Project include the following:
- Mineral reserves: Proven Mineral Reserves of 1.1 million ounces of silver at a grade of 604.5 g/t and 0.1 million ounces of gold at an average grade of 28.3 g/t. Probable Mineral Reserves of 6.1 million ounces of silver at an average grade of 426.2 g/t and 0.24 million ounces of gold at a grade of 16.7 g/t.
- Mine life: The underground mine planned to exploit the Ayelén Vein has an estimated life of 3.5 years.
- Robust project economics: A net present value of $39.2 million (5% discount rate) at base case metal prices and an internal rate of return of 26.5% at base case metal prices1.
- Capital expenditures: $90.4 million (+/- 15%) for a 400 tonne/day underground mine.
- Permitting: The Project's Environmental Impact Assessment was approved in the third quarter of 2012.
- Community relations: In the fourth quarter of 2011 the Company completed an exploitation agreement with one of the two communities that control surface lands covering the Project.
Andrew W. Sharp, B.Eng, FAusIMM, an employee of the company, is the Qualified Person who has approved the foregoing disclosure on the San Luis Project. Please refer to the technical report entitled "Technical Report for the San Luis Project Feasibility Study, Ancash Department, Peru" dated June 4, 2010, a link to which is provided above.
This page contains forward-looking statements. Please see the following link: Legal.
1 Base case gold price is $800 per ounce, and base case silver price is $12.50 per ounce.