European Minerals Corporation: Bankable Feasibility Study at Varvarinskoye Complete Significant Reduction in Capital Costs 26% Increase in NPV.LONDON -- European Minerals European Minerals Corporation, formerly Kazakhstan Minerals Corporation, is involved in natural resource exploration and development. The company's primary project is the development of a (2.34 million oz gold, 269 million pounds of copper) mine in Kazakhstan named Varvarinskoye. Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :EPM EPM equine protozoal myeloencephalitis. .U) (LSE LSE - Language Sensitive Editor :EUM EUM Estados Unidos Mexicanos (Mexican United States) EUM End Use Monitoring EUM Essential Unit Messing EUM End User Modem EUM Emotionally Unavailable Man EUM End User Market EUM End User's Manual EUM European Motorcycle Union ) ("EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. ") is pleased to announce completion of the optimisation of its Bankable bank·a·ble adj. 1. Acceptable to or at a bank: bankable funds. 2. Guaranteed to bring profit: a bankable movie star. 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. ("Study") on its Varvarinskoye gold-copper project in Northern Kazakhstan. EMC owns 86% of the Varvarinskoye project. The optimised Study re-examined all aspects of the 1998 Bateman Feasibility Study, resulting in a very commercially robust project with proven and probable mineral reserves containing 2.345 million ounces of gold and 269 million pounds of copper. Highlights from the Study, using a gold price of US$375 per ounce and a copper price of US$1.00 per pound, are as follows: Financials --------------------------------------------------------------------- All equity case, Project Base Case: US$400 per ounce gold, before taxes US$375 per ounce gold, US$1.10 per pound and royalties US$1 per pound copper copper --------------------------------------------------------------------- NPV (0% discount) US$301 million US$371 million --------------------------------------------------------------------- NPV (10% discount) US$114 million US$147 million --------------------------------------------------------------------- IRR 35% 41% --------------------------------------------------------------------- Payback 26 months 22 months --------------------------------------------------------------------- Base Case Operating Costs operating costs npl → gastos mpl operacionales (using copper revenue as a credit) --US$108 per ounce of gold cash operating cost years 1-6 --US$170 per ounce of gold cash operating cost life of mine (15 years) --US$219 per ounce of gold total operating cost (including capital cost) Proven and Probable Reserves The proven and probable mineral reserves have increased to 2.345 million ounces of gold and 269 million pounds of copper. Capital Costs --Reduced to US$94 million (from US$123 million, as disclosed in EMC's News Release of March 4, 2004), comprising : --US$80 million for process plant/mine infrastructure --US$14 million for pre strip and stockpiling Consultants Metallurgical Design Management ("MDM (Modular Digital Multitrack) An audio recorder that mixes and records multiple tracks of digital audio. The two major MDM technologies are ADAT and DTRS. See ADAT and DTRS. ") of Johannesburg, South Africa has finalised the Study with input from Mintec Inc. of Tucson, Arizona ("Mintec") on reserves, resources, mining costs and open pit mine design. UK based Water Management Consultants reported on the hydrogeology hy·dro·ge·ol·o·gy n. The branch of geology that deals with the occurrence, distribution, and effect of ground water. hy and hydrology hydrology, study of water and its properties, including its distribution and movement in and through the land areas of the earth. The hydrologic cycle consists of the passage of water from the oceans into the atmosphere by evaporation and transpiration (or of the project. The Study will be filed at www.sedar.com under National Instrument 43-101 of the Canadian Securities Administrators Canadian Securities Administrators(CSA) is a forum for the 13 securities regulators of Canada's provinces and territories to coordinate and harmonize regulation of the Canadian capital markets. within 30 days. Based on the Study EMC and its financial adviser (for debt finance), Barclays Capital (the investment banking division of Barclays Bank PLC), are currently advancing project finance discussions with a group of potential lending banks. Proven and Probable Reserves As calculated by Mintec effective October 20, 2004 the Varvarinskoye project contains a diluted measured and indicated mineral resource of 117.6 million tonnes containing 3.8 million ounces of gold and 431 million pounds of copper. From within this resource Mintec has calculated the proven and probable mineral reserves to be 2.345 million ounces of gold at a gold price of US$375/oz and 269 million pounds of copper at a copper price of US$1.00/lb.
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Ore Million g/t % Total Metal Content
type tonnes gold copper (proven and probable mineral reserves)
reserves Gold Copper
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CIL
ore 45.3 1.06 0.06 1,544,145 oz _
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Float
ore 15.0 1.66 0.81 800,512 oz 269 million lbs
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The Varvarinskoye resources and reserves have been calculated from a data base of 1,058 bore holes with 168,570 metres of core. The database has been validated by Mintec. Mining EMC plans to develop Varvarinskoye by conventional open pit mining using hydraulic shovels and dump trucks at a rate of 4.2 million tonnes of ore per annum Per annum Yearly. . Open pit mining using 13 cubic metre hydraulic shovels matched with 91 tonne capacity trucks will enable the movement of 22 million tonnes of ore and waste per year (4.2 million tonnes of ore and 17.8 million tonnes of waste including low grade resource material) at a stripping ratio of 4.2:1. Estimated mine operating cost is US$1 per tonne of material mined, including G&A costs. Process Route Processing of ore at Varvarinskoye will be via two separate ore streams: 1. Conventional carbon-in-leach ('CIL') to produce dore. 2. Standard froth flotation to produce a copper-gold concentrate (with a concentrate grade of 17% copper and 20 g/t gold). Flotation tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. will be directed to the CIL (Common Intermediate Language) The ECMA version of the Microsoft Intermediate Language (MSIL). See CLI. 1. (project) CIL - Component Integration Laboratories. 2. (language) CIL - Common Intermediate Language. plant to recover additional gold.
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Gold recovery from CIL 87% (life-of-mine operating cost per
tonne milled US$3.14)
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Copper recovery flotation 84% (life-of-mine operating cost per
tonne milled US$3.60)
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Gold recovery from
concentrate and flotation 76%
tailings
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Total gold recovered 1.934 million ounces (after smelting &
refining)
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Total copper recovered 216 million pounds (after smelting &
refining)
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81% of the gold at Varvarinskoye will be produced as dore on site.
Average Annual output, years 1-10: 145,000 ounces gold
18.4 million pounds copper
Average Annual output, years 11-14.5: 107,000 ounces gold
7 million pounds copper
Project finance arrangements for Varvarinskoye are now actively underway. EMC has received strong interest from several parties for the debt portion of the mine financing. Management's goal is to begin construction in the second quarter of 2005 with the aim of the first gold pour in the third quarter 2006. Verification of the data described in this press release was provided by Bert Kennedy MSc. C.Eng FIMMM FIMMM Fellow of the Institute of Materials, Minerals and Mining (President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of EMC) and Howard Nicholson BSc. C.Eng MIMMM (Technical Manager of EMC), both designated, qualified persons. Investor Information: www.eurominerals.com European Minerals Corporation Trading Symbols: EPM.U - TSX EUM - London AIM Shares Issued: 57 million Fully Diluted: 70 million Cash US$9 million No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. |
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