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Andean American Advances Invicta to Production
By James West
MidasLetter.com
Tuesday, June 23, 2009
Andean American Mining Corp. (TSX.V:AAG) took another step towards production at its 100%-owned Invicta Gold-Silver-Copper-Lead-Zinc with the completion of an audited Feasibility Study yesterday. The Invicta project has been under exploration and development by Andean American since its acquisition in 2005, and yesterday's announcement marks the culmination of a comprehensively planned and meticulously executed exploration program.
The feasibility study stipulates a 5 year mine life based on current resources in the Measured and Indicated category of 7.9 million tonnes grading 2.11 grams per tonne gold, 19.1 grams per tonne silver, 0.52% copper, 0.38% lead, and 0.35% zinc.
In the Inferred Resources category, an additional 11.7 million tonnes grading 1.22 grams per tonne gold, 10.1 grams per tonne silver, 0.27% copper, 0.24% lead and 0.23% zinc is estimated.
The capital investment required to acquire and install the required equipment is estimated at US$65.3 million which will yield gross revenue before taxes of US$600.1 million, or which $185.3 million can be expected as profit if gold remains above $900 an ounce and copper above $2.00 a pound.
The Invicta project comprises 41 claims covering an area of 37,800 hectares filed by Andean American and five claims covering an area of 3,700 hectares optioned from Barrick Gold Corp (NYSE, TSX:ABX) for a total of 41,500 hectares or 102,549 acres. Over 26,000 metres of diamond drilling have been completed to date, concentrated on the Atenea structure, one of at least five gold-copper structures known on the property.
Some of the permanent equipment has been purchased, including the grinding bay, the vacuum pumps and disc filters, the overhead crane, crane rail and rail support, and main mill building steel. The purchases will protect the schedule and create price stability.
"This study involved an extensive analysis of all the aspects of our project and the end result is a financially robust model with strong cash flow generation at conservative metals prices," states chairman John Huguet. "The Invicta gold property is now in the finance stage with many expressions of interest received. We expect the next 60 to 90 days will see sufficient progress to allow us to implement the project."
On September 3, 2008 the Environmental Impact Assessment ("EIA") was filed with the Peruvian Government which also included the community agreements for the three communities with interest in the project. The EIA had previously been previewed by the Government. Under Peruvian law the government has 90 days in which to communicate observations on the submission. Cesel Engineers prepared most of the submissions. The initial submission is for a 5,100 tpd mining and milling facility.
Andean American drilled a total of 23,000 metres of core during 2008 on Invicta and its second advanced stage project of which it controls a 61% interest through its 58% ownership stake in Sinchao Metals Corp, (TSX.V:SMZ).
The Sinchao Project, which has an inferred resource of 237 million containing 3.73 million ounces of gold and 2.45 billion pounds of copper, along with 92 million ounces of silver, and an additional 4 billion pounds of copper equivalent. This project is located in Cajamarca province in Northern Peru, 30 kilometres from Yanacocha, the largest gold mine in South America.
Less than 15% to 30% of the geological targets on the Sinchao Property have been drill tested. An additional diamond drill program of approximately 5,000 metres has been proposed which will confirm the extensions of the Breccia Zone to the northwest and the Skarn Zone to the southeast.
Mining is one of Peru's largest sources of revenue and a significant employer of the country's 28 million people. There are over 200 sites that are being developed for mineral resources presently and an additional 30 exploration and expansion projects.Peru is the world's top producer of silver, No. 2 in copper and zinc, and ranks sixth in gold output. It is expected that investment exceeding US$20 billion will flow into Peru from foreign mining companies over the coming year.
Canada has committed to supporting Peru in advancing corporate social responsibility within the context of the Asia-Pacific Economic Cooperation (APEC) meetings, which Peru hosted in 2008.
Andean American's Chairman, John Huget has over 40 years in natural resource development, including North, Central and South America and South East Asia. Many joint ventures and unique financing structures highlighted his career with the Atkinson Companies. He started his career in 1963 with Atkinson and left Atkinson in April 1997 where he had served 8 years as President and 4 years as Managing Director of Atkinson Holdings and Commonwealth Construction. During its 33 years, this Company constructed and placed into operation 86 major mining projects. Mr. Huguet joined Andean American as Chairman in April 1997 and took operational control in September 1998.
The company's president, Andrew Gourlay s a mineral exploration geologist with extensive exploration and management experience throughout Asia, North America and South America and has successfully advanced projects from the grassroots to definition drilling and the resource calculation stage. These include the Bonaparte Gold Property in British Columbia and managing Kennecott Canada's first two years of successful diamond exploration in the Lac de Gras area. Mr. Gourlay has also been the Exploration Manager for Chase Resource Corp. in the Philippines, Essex Resource Corp. in Bolivia and for Asia Gold Corp., a subsidiary of Ivanhoe Mines Ltd., in Mongolia.
The company currently has 78.2 million shares outstanding. Learn more by visiting the company's web site at www.AndeanAmerican.com.
SOURCE: http://www.midasletter.com/news/09062306_Andean-american-advances-invicta-project-to-production.php
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