VANCOUVER, August 31, 2011 /PRNewswire/ --
Pan American Goldfields Ltd (OTCQB:"MXOM") (the "Company") is pleased to report a significant increase in gold and silver production at its Cieneguita, Chihuahua, Mexico, joint venture. The Company's partner at the Cieneguita joint venture is Minera Rio Tinto (MRT), a private Chihuahua based company. Under the joint venture agreement the Company receives 20% of the net operating profits after royalties for material processed through the small-scale 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 has a 20% working interest.
A bulk sulfide concentrate is produced at the Cieneguita mill 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 Trafigura Beheer BV, a leading concentrate purchaser. Production had been curtailed during the first part of 2011 due to inadequate water supplies as a consequence of a severe drought, which ended late June. The amount of ore treated in June totaled 5,800 tons, averaging 193 tonnes per day (30 operating days per month), significantly below the design capacity of about 500 tonnes per day for the Cieneguita mill. A total of 222 ounces gold and 10,470 ounces silver (or 416 ounces of gold equivalent (Au Eq = Au ounces + Ag ounces /54) were produced in the bulk concentrate during the month of June.
With the adequate water supplies during the month of July, throughput at the Cieneguita mill increased to an average of 385 tonnes per day with a production of 450 ounces gold and 27,454 ounces silver or 958 ounces of gold equivalent. During the period from August 1st to August 19th a further 6,791 tonnes were processed with production of 273 ounces gold and 19,655 ounces silver to the bulk concentrate (637 ounces of gold equivalent). During the latest week the tonnage processed increased to 428 tons per day. During this same period recoveries averaged 86.7% for gold and 91.5% for silver. Cash costs are currently estimated to be approximately $850 per ounce of gold equivalent which allows for a significant margin using current gold and silver prices. It is anticipated that the cash costs should decrease significantly at the much higher production rates to be examined in the scoping study currently in progress. 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 results are expected to be received in early September.
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 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, across from 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