VANCOUVER, Jan. 18, 2012 /PRNewswire/ - Pan American Goldfields Ltd. (OTCQB: MXOM) (the "Company") is pleased to announce that work on the Cieneguita project NI43-101 compliant Preliminary Economic Assessment ("PEA") is on schedule for its expected completion in the second quarter of 2012. The PEA was started in October 2011 and the primary consultant is M3 Engineering and Technology based in Tucson, Arizona.
Approximately 1,600 kgs of core samples are being used to generate several metallurgical composite samples at Resource Development Inc., lab of Denver, Colorado. These composites will undergo a rigorous metallurgical testing program focusing on the optimization of concentrate flotation characteristics. Initial results should be available by mid-February. Hydrogeological and water supply investigations are currently underway with geotechnical studies related to the siting of various project components starting later this month. Environmental baseline studies are also underway.
Following the definition of the most appropriate metallurgical process option the optimal processing rate will be defined and capital and operating costs estimated. Concurrent with this work an updated mineral resource will be generated as well as a mining schedule. It is anticipated that the results of the PEA will be available in the late second quarter of 2012.
The Cieneguita project hosts a NI43-101 compliant resource estimate above a 0.8 gram per tonne gold equivalent cut-off grade (using prices of $950/oz gold and $14.50/oz silver) of 20.1 million tonnes (measured + indicated) containing 474,900 ounces gold and 33.5 million ounces silver as defined in the company's technical report as filed on SEDAR on October 22, 2010.
Under a restructured joint venture agreement with Minera Rio Tinto (MRT) announced September 29, 2011, the Company is to receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. Following December 31, 2012, the Company retains a 100% interest in the property from which its joint venture partner MRT has the right to earn 20% by contributing on a pro-rata basis to the development of a larger operation, which is the subject of the ongoing PEA. Production for the month of December 2011 averaged 413 tonnes per day with a total of about 609 ounces gold and 24,000 ounces silver reporting to the bulk sulfide concentrate.
The technical information in this release has been prepared by Gary A. Parkison, CPG, a Director of the Company and a Qualified Person as defined by NI43-101.
About Pan American Goldfields
Pan American Goldfields is a precious metal producer and exploration company. It is a specialist in exploration, mine development and production in Mexico's booming Sierra Madre Gold-Silver Belt. The company's most advanced project is its now producing Cieneguita gold-silver mine where a preliminary economic assessment is underway. In addition, it holds the Cerro Delta project in Argentina, where it is exploring for large gold and copper-gold mineralization in the Maricunga Gold Belt in Argentina, across from a number of world-class projects in Chile. The Company continues to assess other high impact opportunities.
On behalf of the Board of Directors,
Neil Maedel, Chairman
Safe Harbor Disclosure
The information in this press release contains forward-looking statements regarding future events or the future financial performance of the Company. Please note that any statements that may be considered forward-looking are based on projections; that any projections involve judgment, and that individual judgments may vary. Moreover, these projections are based only on limited information available to us now, which is subject to change. Although those projections and the factors influencing them will likely change, we are under no obligation to inform you if they do. Actual results may differ substantially from any such forward looking statements as a result of various factors, many of which are beyond our control, including, among others, the timing and outcome of our feasibility study on our Cieneguita Project; the costs and results of our initial production activities on our Cieneguita Project; the future financial and operating performances of our projects; the estimation of mineral resources and the realization of mineral reserves, if any, on our existing and any future projects; the timing of exploration, development, and production activities and estimated future production, if any; estimates related to costs of production, capital, operating and exploration expenditures; requirements for additional capital and our ability to raise additional capital on a timely basis and on acceptable terms; government regulation of mining operations, environmental risks, reclamation and rehabilitation expenses; title disputes or claims against our existing and any future projects; and the future price of gold, silver, or other minerals. These and other factors can be found in our filings with the SEC. The Company undertakes no obligation to release publicly the results of any revision to these forward-looking statements to reflect events or circumstances following the date of this release.
SOURCE Pan American Goldfields Ltd.