Pan American Goldfields Announces Completion of Definitive Agreement for Restructure of Cieneguita Joint Venture and Additional Production Increase at Cieneguita Silver and Gold Project
VANCOUVER, September 29, 2011 /PRNewswire/ --
Pan American Goldfields Ltd (OTCQB:"MXOM") (the "Company") is pleased to report that is has executed the definitive agreement with Minero Rio Tinto (MRT), a private Mexican company, for the restructure of its Cieneguita joint venture, as well as another significant increase in gold and silver production at the Cieneguita project. Under the restructured joint venture agreement the Company receives 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 31st 2012. For all other material processed from the property, the Company's interest is 80% and MRT is reduced to a 20% working interest, subject to certain dilution provisions.
A bulk sulfide concentrate is currently produced at the pilot operation at the Cieneguita project which is shipped for further processing to MRT's mill at Choix, Mexico, where a lead concentrate containing the gold and silver is produced. This concentrate is shipped to the port of Manzanillo, Mexico where it is sold under contract to TrafiguraBeheer BV, a leading concentrate purchaser. Production highlights for August and the first part of September include the following:
- production reached design capacity of 500 tons per day in August and has remained stable at that level;
- August production totaled 544.2 oz gold and 36,304 oz silver
- 11,915 metric tonnes were processed in the first 24 days of September;
- average recoveries were 86 - 89% for gold and 90-91% for silver (from flotation - bulk concentrate);
- 514.65 oz gold and 29,151 oz silver were produced in the first 24 days of September.
These production numbers represent an increase over the July production of 450 oz gold and 27,454 oz silver. It is anticipated that the previously estimated cash costs of $850 per ounce of gold equivalent should decrease at these higher production rates. MRT is preparing an account of the revenue and costs arising from the increased concentrate sales to Trafigura, in addition to estimates of production and sales for the fourth quarter.
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 October 8, 2010.
The Company has entered into an agreement with M3 Engineering and Technology Corporation for the execution and completion of a NI43-101 compliant Preliminary Economic Assessment (PEA) for a commercial scale milling operation at the project. The overall scope of the work for the PEA is to consist of metallurgical investigations, an updated resource estimate and mine schedule, process plant design, site facilities, power supply and distribution, project execution plan, capital and operating cost estimates, an economic model, and preparation of the overall report.
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/MexoroMinerals
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, adjacent to a number of world class projects in Chile.
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.
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SOURCE Pan American Goldfields Ltd