Explorator Resources Inc. is a Canadian-based mining exploration company focused on building a strong portfolio of copper-gold Projects in South America.

Message: Completes Preliminary Assessment on Its El Espino Copper-Gold Project in Chile

Completes Preliminary Assessment on Its El Espino Copper-Gold Project in Chile

posted on May 11, 2009 03:41PM
May 11, 2009
Explorator Resources Completes Preliminary Assessment on Its El Espino Copper-Gold Project in Chile


TORONTO, ONTARIO--(Marketwire - May 11, 2009) - Explorator Resources Inc. ("Explorator" or the "Company") (TSX VENTURE:EXO) is pleased to announce that it has received the preliminary assessment ('scoping study') on the El Espino Project in Chile. The study was completed by AMEC, an international engineering consulting firm with extensive experience in geology, resource evaluation, mining, mineral processing, infrastructure, environment, cost estimation and financial analysis of mining projects worldwide. The study utilized reports by other specialized consultants including the resource estimate prepared by Micon International Limited ("Micon") and announced in November 2008 and metallurgical testwork completed by SGS Lakefield.

Highlights of the Scoping Study include:

- A pre-tax Net Present Value ("NPV") at an 8% discount rate of US$35 million at a base case life of mine copper price of US$1.80/lb and a gold price of US$680/oz.

- At a copper price of $2.00/lb, the pre-tax NPV rises to US$169 million.

- Average annual production of 77 million pounds of copper and 40,000 ounces of gold over a mine life of 19 years, including 165,000 ounces of gold scheduled for the first year.

- Significant potential to increase resource tonnage and grade.

- Average direct costs, inclusive of gold by-product credits, of US$18/t processed or US$1.40/ pound of copper.

- An estimated capital expenditure of US$434 million including a contingency of US$87 million.

David O'Connor, President and CEO, said "The main objectives of the scoping study were to: (1) provide a preliminary evaluation of the financial merits of the El Espino project; (2) determine the work required to advance the project to feasibility stage; and (3) to identify opportunities to enhance the economic value of the project. All objectives were met and we plan to take advantage of the opportunities identified to improve the value of the project. We are particularly excited about the potential to increase the copper-gold grade of the resources as the study indicates that a 10% increase in overall grade will increase the NPV by over US$100 million. Several of the higher grade zones within the identified resources are open along strike and at depth and have excellent potential to be expanded. Future exploration will focus on these higher grade, nearsurface zones which could have a dramatic positive impact on project economics."

The study envisages that the resources at El Espino will be mined by open-pit at a rate of 17,500 t.p.d. (6.4 Mt/a), with total production of 1.467 billion recoverable pounds of copper and 755,000 recoverable ounces of gold over a 19 year mine life. A significant amount of gold (165,000 ounces) is scheduled for production in the first year of operations, relying on very high grades found close to the surface. However, these resources have a marked nugget effect and continuity of the high grade zones is uncertain. Whereas the resource estimate has taken this into account by reducing the search ellipse parameters used and by capping the high grade gold values to 30 g/t, Explorator will increase the confidence in the location and grade of this material with more detailed drilling.

AMEC has developed an ultimate pit using Whittle software and a scoping level production plan that separates sulphide, oxide and high grade gold production and achieves a stripping ratio of 5.6:1 (W/O). Under these assumptions, the extracted portion of the Indicated and Inferred Mineral Resource estimated by Micon and announced in November, 2008, is approximately 17.4 Mt at 0.65% TCu and 0.22 g/t Au, and 96.4 Mt at 0.69% TCu and 0.29 g/t Au, respectively.

Metallurgical testing carried out by Lakefield and CIMM Laboratories has shown that the most profitable mineral processing procedure will be to recover the oxide mineralization in the flotation circuit. This will allow substantial recovery of the significant gold associated with the copper as well as reducing capital costs considerably by eliminating the need for a separate SXEW circuit.

                            DESIGN RECOVERIES


SULPHIDE                                        94.9         50 to 92
OXIDE                                             46               68
HIGH GRADE GOLD                                   46               83
For gold in the sulphides, AMEC used the following recovery function as the metallurgical data showed that the gold recoveries increase with grade:

Gold recovery from sulphide mineralization equals 115.31 x Au + 46.464 (maximum 96%).

Based on iron analyses completed by ALS Laboratories and logging of iron oxide minerals, AMEC state that there is also an opportunity to recover iron from the property. Magnetite and hematite could be recovered from the tailings, and this warrants additional metallurgical studies.

Explorator contracted Gestion Ambiental Consultores (GAC) who completed an environmental baseline study on the El Espino property which was used by AMEC to develop preliminary environmental and social mitigation costs associated with the development of a mine at El Espino.

AMEC has developed a preliminary development schedule in which project study and construction will take three and a half years and the first concentrate would be shipped in the second half of 2012.

The results of the scoping study, summarised in the form required by NI 43-101, will be posted on SEDAR.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured minerals resource category. The preliminary assessment is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is not certainty that the preliminary assessment will be realized.

The mineral resource estimate was completed using the Kriging estimation methodology. The resource estimate was based on block modeling with a search ellipse for the indicated resource of 75 metres by 55 metres by 20 metres and the search ellipse for the inferred resource of 180 metres by 90 metres by 36 metres for the copper resources. For high grade gold a third search ellipse of 35 metres by 25 metres by 10 metres was used to limit the extent of the higher grade mineralization in the indicated resource category. The resource estimate was based on using the grade from 6969 - 2 metre composites in 268 drill holes.

The Preliminary Assessment was prepared under the supervision of Mr. Emmanuel Henry (MAusIMM (CP)) of AMEC, who is a qualified person (QP) within the meaning of NI 43- 101. Mr. Henry has reviewed and approved the contents of this press release.

About Explorator Resources

Explorator Resources is a Canadian-based mining exploration company focused on advancing its El Espino Copper-Gold Project in Chile. The Company is currently completing a scoping study on the Project. The Project lies within the prolific coppergold mineral area of the Cordillera de la Costa and is central to an important cluster of "Candelaria-style" copper-gold deposits. It is located 3.5 hours drive north of Santiago. The El Espino project block covers 75 square kilometres and is host to major gold and copper mineralized structures on which nine small operating mines have been developed.
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