12 million ounces gold equivalent drilled

A mine in the making

Message: Cerro Resources a mine in the making.

Project Summary

  • Cerro Resources through its majority controlled subsidiary SAM has defined a large copper-gold-silver resource at Cerro del Gallo. The copper resource contains 1.4 billion lbs of copper. Cerro has chosen to first develop the gold-silver portion of the deposit that is easily treatable by convention heap leaching. As un-oxide ore is exposed by the open pit operation a carbon-in-leach process plant will be added to the circuit to treat the fresh or un-oxidised material and fully capitalise on this gold resource.

  • Cerro del Gallo contains an in-pit resource of 69.9Mt at a grade of 0.66g/t Au (1.5Moz) and 13.6g/t Ag (30.5Moz).
  • Pit optimisation studies indicate a low strip ratio of 0.74:1 with a mine life of 14 years.
  • The resource is defined by 354 drill holes totaling 95,979m.
  • The base case metal price evaluation (US$900/oz gold, US$15/oz silver) generates a pre-tax operating cash flow of US$259 million, with a payback period of 2.13 years for the initial heap leach development, a 37.1% IRR, and a net present value of US$118 million at a project discount rate of 8%, over the 14 year mine life. Project direct cash operating cost after by-product credits average is US$422/oz Au.
  • The project is located in a pro-mining area of Mexico with no environmental issues.
  • A full feasibility study is currently underway due March 2011 .

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