VANCOUVER, Dec. 20, 2012 /PRNewswire/ - Pan American Goldfields Ltd. (OTCQB: "MXOM") (the "Company") is pleased to announce new record production results for the month of November, 2012 at its 80% owned Cieneguita project, Chihuahua, Mexico.
The Cieneguita project is currently being operated on a pilot basis under an agreement between the Company and Minera Rio Tinto ("MRT"), a private Mexican company. The following production is as reported to the Company by MRT and is still subject to final reconciliation and some adjustments with particular respect to tonnes and grades produced and shipped from the facility at Choix. As part of the Company's joint venture agreement with MRT, the Company receives 29% of net cash flow until December 31, 2012. The Company's share of net cash flow increases to 35% as of January 1, 2013 and remains at this level through the remainder of the year at which time the 600 tonne per day pilot operation is slated to cease production. The Company maintains an 80% ownership interest in the project for which a Preliminary Economic Assessment ("PEA") is near completion evaluating a possible 6,000 -7000 tonne per day operation. A feasibility study is planned to commence in early 2013 following completion of the PEA.
Gold and silver production levels have increased during November from the previously reported record levels in October with average daily production of ore processed during the month at about 580 tonnes per day. The addition of a conditioner, disc filter and an additional flotation cell and a conventional thickener are expected to be result in a further increase to about 800 tonnes per day. Higher mined gold grades during the month resulted in gold production reporting to the sulfide concentrate increasing to 758 ounces compared to the 506 ounces produced in October. Silver production also increased to 75,330 ounces compared to 68,758 ounces in October. It should be noted that production has steadily increased during 2012 from the low levels reached in March 2012 when production at Cieneguita was only 629 ounces gold and 6,517 ounces silver.
Mining continues in an area of higher silver and gold grades which appear to increase with depth. This area is contiguous with, but located to the northeast of where MRT has been mining in the past. MRT has given guidance that it expects this area currently being mined to be sufficient to supply the pilot operation for the duration of 2013 based on an average processing rate of 20,000 tonnes per month.
The anticipated production capacity of 800 tonnes per day, if maintained for the entire year, would result in approximately 280,000 tonnes being mined from the 20,087,0000 tonne deposit during 2013. The higher silver and gold grades being mined, an increase in metal recoveries over prior months, and the higher daily production levels (currently 580 tonnes per day) have resulted in significantly higher amounts of contained ounces of silver and gold being shipped to Trafigura.
The increased silver and gold production at Cieneguita will result in a significantly higher level of payments to the Company under our agreement with MRT. The terms of the agreement call for the Company to receive its interest in the net cash flow on a quarterly basis when all costs are deducted from revenues are received from sales to Trafigura. The Company does, however, receive an advance payment every month of US $150,000. This amount is then deducted from the money owed to the Company by MRT at the end of the three month period and the reconciled amount then paid.
Specific mine production and processing information for the month of November 2012 is presented below for the operations at Cieneguita.
1 to 30
|Nov-12||WEIGHT||%||g /ton||RECOVERIES||CONTENT GRMS.|
|TOTAL Oz =||757.698||75330|
|TOTAL Eq. Oz Au =||56.667||2,087|
During November 2012, five truckloads of Ag-Au-Pb concentrate totaling 256 tonnes were shipped to Trafigura from the Choix facility.
About Pan American Goldfields
Pan American Goldfields is a precious metals mining and exploration company. Its focus is the production of gold and silver and the development and expansion of its Cieneguita mine in Mexico's booming Sierra Madre gold-silver belt. The Cieneguita deposit contains a NI 43-101 compliant resource of 1.1 million Measured and Indicated gold equivalent ounces. This resource contains 20,087,000 Measured and Indicated tonnes grading 0.74 g/t gold and 51.8 g/t sliver and 453,000 Inferred tonnes grading 0.99 g/t gold and 34.2 g/t silver. M3 Engineering of Tucson is managing a PEA for a larger operation which is expected to be completed Q1, 2013. A feasibility study is planned to commence immediately following the PEA.
Pan American also has a non-core, large porphyry-style copper-gold exploration project in on the Argentine side of the Maricunga gold belt.
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.