Mar 22, 2011, 10:28 ET from Argentex Mining Corporation

VANCOUVER, March 22 /PRNewswire/ - Argentex Mining Corporation ("Argentex" or "the Company") (TSXV: ATX) (OTCBB: AGXM) has received the results of a positive NI 43-101 Preliminary Economic Assessment ("PEA") report on the near-surface silver-gold oxide resource from its Pinguino project located in Santa Cruz province, Patagonia, Argentina.

The portion of the mineralized system assessed in the PEA is limited to the indicated and inferred silver-gold oxide resource previously identified by Moose Mountain Technical Services in its National Instrument (NI) 43-101-compliant August 2009 report titled "Resource Estimate for the Pinguino Silver, Zinc, Indium, Lead, Gold Occurrence (the "2009 Technical Report"), a copy of which has previously been filed on SEDAR.  The company had been focused on drilling the polymetallic sulphide mineralization at Pinguino through until late 2009, at which time Argentex began to focus on the property's near-surface silver-gold oxide horizon.  Argentex intends to use data from silver-gold discoveries made in 2010, as well as results from the current 2011 drill program in progress, to update both the PEA and the 2009 Technical Report later this year.  Additional veins that have been tested since preparation of the 2009 Technical Report contain significant intersections of high-grade silver and remain open along strike and to depth.

The PEA is based upon an update of the 2009 Technical Report (see table below), which used results from only nine of the 51 veins identified to date on the Pinguino property, and is estimated to represent only seven line kilometres of vein strike length out of a combined strike length in excess of 75 line kilometres discovered to date. The update used the 2009 published interpolation parameters but divided the resource into oxide and sulphide zones.  Data from 2010 and 2011 has not yet been incorporated.

Summary of Estimates: Base Case using $US1,036 oz Au and $US16.96 oz Ag:

Internal Rate of Return (IRR)      44%
Mine Life      8 years
Net Cash Flow      US$ 29.7MM
Net Present Value (NPV) 5% Discount Rate      US$ 21.9MM
Payback      23 months
Average Annual Production      ~657,000 oz Ag, ~6,400 oz Au
Capital Costs      US$ 20.7MM

A Summary of Returns using different gold and silver prices is as follows:

Case Gold ($US/oz) Silver ($US/oz) Undiscounted Cash Flow (MM USD) NPV at 5% (MM USD) IRR % Payback (months)
Base Case $1,036 $16.96 $29.7 $21.9 44 23
Base Case + 20% $1,243 $20.35 $61.8 $47.1 76 13
Spot Price $1,430 $36.00 $165.0 $129.7 189 6
  • Net prices used for Cash Flow analysis include offsite costs.
  • These economic results include inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

"The completion of this initial PEA is an important first step for Argentex as we continue to evaluate strategic avenues of building shareholder value within the prospective Pinguino property.  It confirms our belief that the shallow oxidized mineralization at Pinguino is capable of generating attractive rates of return and cash flow in support of continued mine development and resource expansion within the property's very large mineralized system," said Ken Hicks, P.Geo, President of Argentex.  "In addition, we believe that the positive results from the 2010 exploration program, which are not included in the PEA, suggest that Pinguino holds the potential for a significantly larger resource. The focus of our current 2011 exploration program, which commenced on January 24, 2011, is to further evaluate the numerous extensions of known mineralization that remain open along strike and at depth and offer excellent opportunities for resource expansion.  We believe 2011 will be another year of discovery and resource growth and look forward to continuing to build value for our shareholders."

The PEA covers nine of the 51 mineralized veins identified to date at Pinguino.  Additional veins that have been tested since preparation of the 2009 Technical Report contain significant intersections of high-grade silver and remain open along strike and to depth.  The PEA oxide Base Case relies on the Indicated and Inferred Resources shown below:

Oxide Resource:  Summary of Designed Pit*1 Delineated Resource:

Oxide Resource Resource >$7.07 N$R (tonnes) Insitu Grades
N$R ($US/Tonne) g/t Ag g/t Au
Oxide-Indicated 2,860,000 19.05 32.36 0.288
Oxide-Inferred2 5,960,000 17.67 28.55 0.256

1 Designed Pit results include Process Recovery of 70% for Au and Ag, Loss and Dilution of 10%, and Mining and Offsite Costs.

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

The above Resource and Cash Flow results (using gold and silver prices of US$1,036 per oz Au and US$16.96 per oz Ag for the base case, respectively) assume the development of an open pit mine comprised of a 3,000 tonne per day heap leach operation from the oxide portion of the deposit and would produce a silver/gold doré onsite at the Pinguino property. Discovery of additional oxide mineralization proximal to the identified resource, as well as polymetallic sulphide mineralization, represent opportunities to expand the operation and Argentex plans to make these the subject of continuing study.

The Pinguino property is host to two distinct categories of mineralization, distinguished by their differing mineralogical character and depth from surface.  The first category is a thick horizon of oxide material, enriched in silver and gold, located within the first 50 meters from surface.  Below this oxide material, primary unoxidized mineralization forms the second category and occurs from approximately 50 meters to a maximum tested depth of 400 meters below surface. This primary material is composed of both quartz-rich silver-gold and sulphide-rich polymetallic mineralization, as there are two different types of veins within the Pinguino property.

Polymetallic sulphide mineralization has been found within multiple veins in the core of the property, with vein thicknesses of up to 10 meters in width and extensive strike lengths.  Argentex believes that these veins are open in all directions with excellent potential for expansion. This type of mineralization is considered a significant opportunity to expand the operation and will be the subject of ongoing exploration.

The mine plan envisaged would be a contract operation with initial mining within surface-exposed mineralization. Sequential mining of the separate veins in the deposit will give an opportunity for short hauls and backfilling of mined-out pits.

Moose Mountain Technical Services (MMTS), a qualified independent consultant to Argentex, prepared the NI 43-101-compliant PEA.  Key recommendations from the MMTS report, with respect to the next phases of mine and metallurgical engineering, are under review and plans for implementation are being developed.

Qualified Persons

This NI 43-101-compliant Technical Report on the Pinguino property has been prepared by Moose Mountain Technical Services (MMTS), Giroux Consulting Ltd., and G&T Metallurgical Services Ltd., all of which are qualified independent consultants for Argentex Mining Corporation. MMTS is responsible for coordinating the study and is responsible for general compilation of the work.

Exploration on the Pinguino property is being conducted under the supervision of Mr. Kenneth Hicks, P.Geo., Argentex's President and a "Qualified Person" (QP) as defined by Canada's National Instrument 43-101.

Mr. Jim Gray, P.Eng., of MMTS visited the Pinguino property on June 11, 2010 and is the QP for matters relating to mining, mining capital, and mine operating costs.

Mr. Bob Morris, P.Geo., of MMTS conducted site visits on May 18-20, 2004, January 22, 2008 and April 25-27, 2008 and is the QP in matters relating to geology and the resource estimate.

All dollar figures presented in this news release are stated in US dollars, unless otherwise specified.

About Argentex:

Argentex Mining Corporation is an exploration company focused on the discovery of silver, gold and polymetallic deposits on its advanced late-stage exploration projects in the Patagonia region of southern Argentina.

In 2011, through an extensive targeted exploration program, Argentex is currently advancing its highly prospective projects, specifically its 100%-controlled Pinguino project, located in Santa Cruz province.  An early 2011 drill program of approximately 17,000 meters is underway at Pinguino, where Argentex plans to drill test the extents of previously identified high-grade silver targets discovered in 2010.  More than 6,300 meters of the proposed 17,000-meter program have been completed to date.  The new discoveries being drill tested include the Tranquilo and Luna veins at Pinguino, which returned high-grade results in previous drill programs, including 6.0 meters of over 2,400 g/t silver and 0.22 g/t gold and 6.4 meters of 486.6 g/t silver and 1.91 g/t gold. More than 51 individual veins have so far been discovered at Pinguino, with a combined strike length in excess of 75 line kilometers.  Only a small percentage of veins and potential targets have been drill tested in the 42,300 meters of drilling completed at Pinguino to date.

Argentex's 10,000-hectare Pinguino property is located in Argentina's Patagonia region, within the Deseado Massif of Santa Cruz province. Pinguino is easily accessible, situated approximately 400 meters above sea level in low-relief topography.  An existing system of all-weather roads provides year-round access to the property.

In total, Argentex owns 100% of the mineral rights to more than 35 projects located within approximately 307,981 acres (124,636 hectares) of highly prospective land located in the Santa Cruz and Rio Negro provinces of Argentina. Shares of Argentex common stock trade under the symbol ATX on the TSX Venture Exchange and on the OTCBB under the symbol AGXM.

On behalf of Argentex Mining Corporation:

"Ken E. Hicks" President

Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties.  Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements in this news release include statements about Argentex's plans to use data from discoveries in 2010 and the current 2011 drill program to update the PEA and the 2009 Technical Report, its belief that mineralization at Pinquino is capable of generating attractive rates of return and cash flow in support of continued mine development and resource expansion, its belief that the Pinguino property holds a significantly larger resource and its hopes to add to the 2010 exploration results with the 2011 exploration program. Actual results may differ materially from those currently anticipated due to a number of factors beyond the Company's control.  These risks and uncertainties include, among other things, competition for qualified personnel and risks that are inherent in Argentex's operations including the risk that the Company may not find any minerals in commercially feasible quantity or raise funds sufficient to prosecute its exploration plans.  These and other risks are described in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

Cautionary note to U.S. investors: The terms "indicated mineral resource", and "inferred mineral resource" used in this news release have been adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves.  Use of these terms in disclosure is recognized and at times required by the Canadian Securities Administrator's National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"), but the Securities and Exchange Commission does not recognize them.  U.S. investors are cautioned that mineral resources that are not mineral "reserves" do not have demonstrated economic viability and there can be no assurance that any part of a mineral deposit included in the measured and indicated categories will ever be converted into a reserve.  "Inferred mineral resources" in particular have a great amount of uncertainty as to their economic feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.  NI 43-101 provides that estimates of "inferred mineral resources" cannot form the basis of feasibility or other economic studies.  U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.


SOURCE Argentex Mining Corporation