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SREP (San Rafael/El Placer)
SREP is located adjacent to the Company's La Camorra Mill and the project currently has NI 43-101 compliant gold resources of 399,000 ounces indicated and 523,000 ounces inferred. The current resources are based on 87,000m of drilling and the underground development of 10 shafts totaling 1665m since 2003. There are more than 12 gold zones, each 1 to 2 metres wide and 200 metres long, that have been identified and the Company is currently mining the upper portion of several lenses. All zones are open to depth and the property hosts a number of intriguing exploration drill targets. 14,700m of drilling was completed in 2008 and the results were included in the updated 43-101 report completed in 2008. Underground DevelopmentBased on the highly positive nature of the in-fill drilling program the Company completed the 1.5 kilometre Alverez ramp, which provides access to the main mineralized zones 200 metres below surface. The ramp will provide all of the necessary access for any prospective future mining operations.Detailed underground sampling is being completed on the primary structure as part of the on-going exploration and verification program designed to validate the existing resources and the current block model. Pre-feasibility StudyA positive Pre-Feasibility Study on the San Rafael and El Placer (SREP) Project was received on May 7th, 2010. The report was prepared by Whillans Mine Studies Ltd. and includes the development of a life of mine underground mine model on the currently identified indicated resources.The results of the Pre-Feasibility Study conclude that gold can be recovered economically from the existing indicated resource and that potential exists for further enhancement of the SREP Project. Highlights and Conclusions The following highlights are taken from the summary of the recently completed pre-feasibility study on the SREP Project by Whillans Mine Studies Ltd.; • Completion of a mine plan for the existing indicated resources resulting in a Probable Reserve of 1,157,000 tonnes grading 10.1 g/t Au (375,700 ounces). • The study uses a model where all mined material is processed at the existing Choco 10 Mill. • Gold production from the SREP Deposit includes the recovery of a total of 319,456 ounces over a six year mine life reaching a peak of 76,000 ounces in year 2014 at a LOM cost of production of US$324/oz Au. • Mine capital development is estimated at $US 9.8 million, Capital Infrastructure and Equipment at $17.3 million, Capital Mine Indirect Costs at $14.6 million, and Sustaining Capital at $20.4 million over the life of mine (6 years). • Life-of-mine net income after taxes of $US 51.9 million. • Payback is estimated at three years. • At a gold price of $US 950/oz, the Pre-Feasibility Study estimates the NPV (8% discount) to be $US 28.2 million with an after-tax IRR of 30%. Concession GeologyThe geology of the San Rafael and El Placer concessions is dominated by rocks of the Botanamo Group part of the Guyana Shield . In the property area, this unit comprises intermediate volcanic, volcaniclastic, and sedimentary rocks. The units strike at approximately 110º and dip steeply to the south. Gold mineralization is mainly concentrated in quartz veins, although high grade values may extend into the altered wall rocks. The quartz veins strike parallel to the Camorra Trend and dip steeply south. Of major importance for gold mineralization, a major structure, the Camorra Trend, crosses through the two concessions. This trend strikes at approximately 290º and dips steeply south. The zone is approximately 250 m wide. It hosts most of the mineralization on the San Rafael and El Placer concessions. Gold is typically fine grained and is present as free gold. Individual veins are elongate with the long axis plunging steeply. The larger veins, D and E3, have been traced from the surface to depths in excess of 600 m. At the present time, some 12 veins have been recognized within the San Rafael - El Placer system.
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