VANCOUVER, November 19, 2012 /PRNewswire/ --
Pan American Goldfields Ltd.(OTCQB: "MXOM") ("The company") is pleased to announce the production results for the last two months of operation 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 terms of the agreement were recently re-negotiated as discussed in The Company's release on September 12th 2012. The Cieneguita project as operated by MRT produces a bulk sulfide flotation concentrate or pre-concentrate at the Cieneguita plant. This concentrate is then shipped to Choix where it is treated to produce a lead concentrate that contains the majority of the valuable metals gold and silver. This lead concentrate is then sold under contract to Trafigura who then ships the concentrate to various smelters for final metal recovery.
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. Production levels have increased to record levels in October with an average daily production of ore processed at about 600 tonnes per day. A conditioner, disc filter and an additional flotation cell has been installed at the Cieneguita while a conventional thickener is expected to be installed by the beginning of December after which production is planned to be increased to 800 tonnes per day.
Mining is currently underway in an area of higher silver grades and somewhat lower gold grades that is contiguous with, but located to the northeast of where MRT has been mining in the past. These higher silver grades, a significant increase in metal recoveries over prior months, and the higher daily production levels have resulted in a significant increase in the contained ounces of silver being shipped to Trafigura since March 1st 2012, the beginning of the Company's 2012 financial year. Silver production increased from the 36,517 ounces Ag for the month of March 2012, to 68,758 ounces in October. Gold production has averaged 524 ounces per month during the eight month period, though it decreased to 506 ounces in October. The increased silver production will result in a significantly higher level of payments to the Company under our agreement with MRT. In September and October eight truckloads containing a total of 280 tonnes of Pb-Au-Ag concentrate were shipped to Trafigura. It is expected that in response to the increased October production, shipments will be increased to eight truckloads in November.
In the Company's first eight months of its 2012 financial year which began March 1st, the Cieneguita pilot operation generated net cash flow of approximately US$5,952,000, of which US$1,727,000 is attributable to Pan American under the joint venture agreement. Pan American's percentage interest in the cash flow from the pilot operation, which was financed entirely by MRT, increased from 20% to 29% retroactive to March 1, 2012 through December 31, 2012, as per the Second Amended and Restated Development Agreement with MRT. The Company's percentage interest in the cash flow from the pilot operation is to increase to 35% beginning January 1st 2013 according to the same agreement.
Specific mine production and processing information for the months of September and October is presented below for the operations at Cieneguita and Choix.
September October Cieneguita Ore Tonnes Mined & Processed 14,218 18,137 Grades Processed (Au g/t; Ag g/t; Pb %) 0.74; 124; 0.62 0.92; 124; 0.72 Recoveries to Bulk Concentrate (Au %; Ag %; Pb %) 92.1; 91.9; 84.1 94.0; 95.2; 93.1 Grade of Bulk Concentrate (Au g/t; Ag g/t; Pb %) 6.71; 975; 4.67 7.38; 1,002; 5.24 Bulk Concentrate Dry Tonnes Shipped to Choix 1,132 1,708 Contained Ounces in Bulk Concentrate (Au; Ag) 243; 35,318 403; 54,765 Choix Bulk Concentrate Tonnes Processed 945 1,508 Grade of Bulk Concentrate Processed (Au g/t; Ag g/t; Pb %) 6.71; 975; 4.67 7.38; 1,002; 5.24 Recoveries to Pb concentrate (Au %: Ag %, Pb %) 77; 87; 83 77; 87; 84 Grade of Pb concentrate (Au, g/t; Ag g/t; Pb, %) 37.0; 5,686; 24.0 37.0; 5,686; 24.0 Tonnes of Pb concentrate produced 163 260 Contained Ounces in Pb concentrate (Au; Ag) 187; 30,276 310; 47,646
Production during the eight month period averaged 540 tonnes per day with gold and silver recoveries during the same period for the bulk concentrate at Cieneguita averaging 89.8% and 90.6%, respectively. Recoveries rose in October for gold and silver to 94% and 95%, respectively. Gold equivalent production using a US$1600 per ounce gold price and US$30 per ounce silver price for the month of October was 1,795 ounces compared to an average of 1,287 for the preceding seven months. Assuming October's production rate is maintained throughout 2013 the company estimates that it would impact less than 2% of the current resource.
Cieneguita Mineral Production and Revenue (calendar) 2012
CIENEGUITA BULK PRIMARY Year FLOTATION Jan. Feb. March April May June July August Sept. Oct. to 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 Date Tons milled 14,255 14,766 15,452 12,175 14,804 16,245 16,750 18,300 14,218 18,137 155,102 Days operated 28 28 29 28 29 28 29 29 29 30 287 TPD 509 527 533 435 510 580 578 631 490 605 540 Head Grades (Au) 1.64 1.53 1.42 1.48 1.38 1.3 1.28 0.85 0.74 0.92 1.24 Head Grades (Ag) 84 91 82 76 93 112 71 93 124 124 95.63 Recovery % (Au) 89.5 89.6 89 89.2 90.4 89.4 86.5 87.8 92.1 94 89.75 Recovery % (Ag) 89.8 90.2 90.4 91 88.8 92.3 88.3 87.2 91.9 95.2 90.51 Ounces Gold Produced 673 651 629 517 593 608 598.17 437.51 311 506 5,524 Ounces Silver Produced 35,071 37,819 36,517 28,497 36,633 54,162 34,557 45,068 48,215 68,758 425,297 Ounces Gold Equivalent Produced 1,331 1,360 1,313 1,051 1,280 1,624 1,246 1,283 1,215 1,795 13,498
Preliminary Economic Assessment Update
Good progress is continuing towards the completion of the Preliminary Economic Assessment ("PEA") for the Cieneguita project, however, the results of metallurgical tests are not expected to be completed prior to the month's end as is an updated geologic model of the deposit and associated mineralization. Preliminary site layout work has been completed and is awaiting the results of ongoing geotechnical work related to mine waste rock dumps and sulfide flotation tailings.
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.
About Pan American Goldfields
Pan American Goldfields is a precious metals mining and exploration company with projects in Mexico's booming Sierra Madre gold-silver belt and the Maricunga Gold Belt straddling the border between Argentina and Chile. The Company's most advanced development is its now producing Cieneguita gold-silver mine, where a preliminary economic assessment for the expansion of the operation is underway. In addition, the Company holds the Cerro Delta project in Argentina, where it is preparing to drill test a series of large porphyry-style copper-gold occurrences - which are on structure and 12 miles east of Barrick's 23.2 million oz/Au Cerro Casale in the Maricunga gold belt. The Company continues to assess other high-impact acquisitions in Colombia, Argentina and Mongolia.
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.