Grenville to verify extraction costs of Silveria rock
2007-09-27 12:02 ET - News Release
Mr. Tom Thomsen reports
GRENVILLE OUTLINES SILVERIA MINE DEVELOPMENT STRATEGY
Grenville Gold Corp. is currently in the process of stockpiling rock from several mineralized veins at the Silveria project. To date, 2,800 metric tonnes of mineralized rock have been stockpiled, secured and are ready for transportation. President and chief executive officer, A. Paul Gill, was recently interviewed by Dow Jones Inc. and discussed the company's development strategy.
The company has identified an additional 86,100 metric tonnes of mineralized rock which are accessible in the short term. Grenville's goal is to process the material as a bulk sample to test if the costs of extraction estimated in the Silveria NI 43-101 at $20 per metric tonne are accurate and if the processing the material is profitable. The next goal, in the short term, is to find a mill in the local area that will be able to take the mineralized rock from Silveria for a price per tonne that would allow Grenville to establish a profitable operation on a continuing basis. If a profitable operation is established, management will determine if and when further capital investments from equity or debt financings will be required to expand operations to build, buy and refurbish or rent a mill to increase the productivity of the operation. Grenville notes that no feasibility study has been performed and there is no certainty that the cost projections will be met, nor that the proposed operations will be economically viable. It is important to read the information contained in this release in the context of the Silveria 43-101 states that the reserve information referred to has not been independently confirmed and cannot be relied upon. However, Grenville management is aware that profitable production from high-grade mineralization at the Pacococha mine likely occurred over the 30 years the operation existed. Also the 43-101 notes that there were various factors that halted production including low metal prices, disconnection from the Peru electrical power grid due to political upheaval and lack of capital reinvestment to retool the mill. Grenville management is confident that these problems will not prevent current operations from succeeding.
In the midterm, NI 43-101-non-compliant reserves reported in the Silveria 43-101 for the Pacacocha mine in 1991 indicate 449,019 metric tonnes of mineralized rock grading 4.49 ounces per ton silver, 1.75 per cent copper, 1.47 per cent lead and 4.13 per cent zinc as described in tables 8.6 and 8.7 in the Silveria 43-101 are accessible. The above statistics were not independently confirmed by the authors and are therefore not 43-101 compliant and cannot be relied upon. It is important to take note of the authors' comments on the method of mining to fully understand why the previous mining operations established the term "reserves.";
"In common with many steeply dipping, narrow vein mining operations, the basis for the definition of the stated mineral reserves appears to have been in vein drifting and sampling:
- "Individual veins were accessed via drifts that extended from surface.
- "Vein drifts were developed in both directions (northeast and southwest), from the associated access drifts to surface.
- "Intersected vein lengths were measured (to define an average width), sampled and assayed.
The results were used as the basis for reserve estimation from which minable/economically viable stopes were defined." (Stephen J. Godden and David M. Stone, Silveria technical report, page 40.)
If a profitable operation is derived from shipping mineralized rock to mills in the surrounding area, Grenville estimate the life of the project considering metal prices and other risk factors to determine whether the building, purchasing or renting a mill to increase the profit potential from such an operation is warranted.
