American Bullion Minerals: Positive Red Chris Pre-Feasibility Study Received.VANCOUVER, British Columbia--(BUSINESS WIRE)--July 8, 1998-- American Bullion BULLION. In its usual acceptation, is uncoined gold or silver, in bars, plates, or other masses. 1 East, P. C. 188. 2. In the acts of Congress, the term is also applied to copper properly manufactured for the purpose of being coined into money. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :ABP 1. (networking) ABP - Alternating bit protocol. 2. ABP - Microsoft Address Book Provider. .) The Board of Directors of American Bullion Minerals Ltd. ("ABP") is pleased to announce that it has received the results of a new pre-feasibility study for its Red Chris copper/gold project. The comprehensive study was carried out by a team of consulting professionals (with overall project management by the Company) and comprises: a reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of the project resource estimate and block model; design of a large open pit; design of underground development for ore and waste handling; design of a concentrator facility; design of a waste management area; infrastructure and other mine related facilities. The study has focused on the unique characteristics of the project, including: - a structurally controlled "Higher Grade Core" that is essentially oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. vertically and "daylights" at surface; and - a topographic topographic describing or pertaining to special regions. advantage and a mine plan that incorporates the use of underground workings to efficiently move ore and waste from an open pit (much of the mined material does not need to be lifted during transport to the concentrator). When combined in the overall mine plan, these characteristics deliver important improvements in project economics over typical mining practices. For example, the use of ore and waste passes (vertically driven connections from the open pit to the underground conveyor Conveyor A horizontal, inclined, declined, or vertical machine for moving or transporting bulk materials, packages, or objects in a path predetermined by the design of the device and having points of loading and discharge fixed or selective. system) enables the open pit to be developed more quickly in the vertical dimension, maximizing grade in the schedule, improving cash flow and allowing development of steeper walls than operations in typical settings. Two cases were evaluated for the financial analysis of the pre- feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. , including: I) Design Case and II) Enhanced Comminution comminution (k  ˈ·m (crushing crushingdeaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. and grinding grinding, process by which surface material is removed from an object, usually metal, by the abrasive action of a rotating wheel or a moving belt that contains abrasive grains. ) Case. Both cases assume the same mine schedules, development requirements and similar mining styles. For the Enhanced Comminution Case, an estimated decrease in the grinding requirement for the mill is included in the analysis. This is intended to reflect the anticipated results of additional breakage of the ore in the mine plan as a result of the following: - high degree of drilling and blasting Before the advent of tunnel boring machines, drilling and blasting was the only economical way of excavating long tunnels through hard rock, where digging is not possible. Even today, the method is still used in the construction of particularly long tunnels, where a TBM is effort; - impact of the prime mover prime mover: see energy, sources of. Prime mover The component of a power plant that transforms energy from the thermal or the pressure form to the mechanical form. (large dozers) in moving material; and - grinding that naturally occurs in the ore passes which is demonstrated at operating mines. The following table summarizes the financial analysis for the study: -0-
Financial Analyses Design Case Enhanced Comminution
Summary Case
Pre-production Capital Cost Estimate
(including Contingency,
EPCM(1), and Indirects) C$263 M C$ 252 M
(US$ 181 M)(2) (US $174 M)(2)
Operating Cost
- life of mine C$5.26 (US$3.63)(2) C$4.94 (US$3.41)(2)
IRR (pre-tax) at US$0.85/lb Cu,
US$310/oz Au 13.6 percent 16.0 percent
Net Present Value
at 8 percent Discount C$ 106 M C$ 148 M
(US$ 73 M)(2) (US$ 102 M)(2)
at 10 percent Discount C$ 59 M C$ 97 M
(US$ 41 M)(2) (US$ 67 M)(2)
Cash Cost of Production Estimate
(assumes gold price of
US$310/oz)(2) Year 1-5 Year 1-5
US$ 0.43 /lb. US$ 0.41 /lb.
Life of Mine Life of Mine
US$ 0.48 /lb. US$ 0.45 /lb.
Note: 1. EPCM = Engineering, Procurement and Construction
Management
2. Exchange Rate Assumed: C$ 1.00 = US$ 0.69
The study's estimates of cash operating cost for the project (using a gold price of US$310/oz) are well below current operating costs operating costs npl → gastos mpl operacionales for much of the world's copper production. Further, the cash costs are roughly equivalent to those of many SX/EW (copper leaching leaching, method of extraction in which a solvent is passed through a mixture to remove some desired substance from it. A simple example is the passage of boiling water through ground coffee to dissolve and carry out the chemicals necessary for producing the beverage. ) operators (generally recognized as some of the lowest cost producers) and, importantly, well below current commodity prices. The Design Case comprises the following Project Specifications: Total Ore Milled 224.5 million tonnes Year 1-5 Copper Grade 0.512 percent Cu Life-of-mine Copper Grade 0.419 percent Cu Year 1-5 Gold Grade 0.355 g/t Au Life-of-mine Gold Grade 0.330 g/t Au Stripping Ratio (W:O) 1.40:1 Throughput rate 30,000 tonnes/day Copper recovery/Gold recovery 88 percent/63 percent Copper Production (in conc.) 90 million lbs./year Gold Production (in conc.) 72,000 oz/year Mine Life 20.5 years The results of the study are very encouraging and are based on the assumption that the project bears all the capital cost of infrastructure development in the area. For example, the development of a power line accessible along Highway 37 North is estimated to cost C$35 million. The operating cost estimate also uses current industry power rates although the province is contemplating a reduction in that rate for other industrial power users. Reductions to either of these costs will significantly improve the project economics. The pre-feasibility study indicates that the project will require up to 238 full-time employees for the life of the operation. Many other indirect jobs associated with trucking, shipping and local supply and services will also be generated over the 20.5 year mine life. Construction of the project is anticipated to require 420 person-years of employment during the estimated 27 month construction schedule. During the course of the study, the Company's Senior Review Board has been involved in the review of the design aspects of the project and of the study document. Their suggestions have been incorporated into the final document. The study also identifies a number of project opportunities. These include further opportunities to reduce capital costs and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of mill capacity and recoveries. These potential improvements will be evaluated by the Company over the next several months. ABP has also been active in marketing the project to prospective operating partners - the focus of a partnership or joint venture will be to advance the project to final feasibility and, ultimately, production. Currently, a total of nine senior mining companies are reviewing the results of the study. The Company is also preparing to market the results of the study to other strategic partners and operating partner candidates. For more information about American Bullion Minerals Ltd. and the Red Chris Project please visit our website at http://www.abpminerals.com The foregoing news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others those described in the Company's annual report on Form 20-F, including among others, the following: uncertainties related to early stage of development, technology and product development; dependence on future corporate collaborations; dependence uncertainty of patent protection; management of growth; future capital needs and uncertainty of additional funding; intense competition; manufacturing and market uncertainties; government regulation; product liability exposure and insurability in·sure v. in·sured, in·sur·ing, in·sures v.tr. 1. a. To provide or arrange insurance for: a company that insures homeowners and businesses. b. . The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
CONTACT: American Bullion Minerals Ltd.
Charles H. Wills, 604/622-4406
604/622-4444 (FAX)
or
American Bullion Minerals Ltd.
Investor Relations, 800/403-2940
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