- Published: 15 September 2008
- Written by Editor
Zaruma Resources Starts Drilling at Carrizo Ridge and Reports on Luz del Cobre (San Antonio, Mexico)
Zaruma Resources Inc., (TSX-ZMR), reports that a 2,000 metre drilling programme has started in the Sapo-Carrizo area located 7 kilometres west of the Luz del Cobre copper project, in the Company's 11,300 hectare San Antonio property (Sonora, Mexico).
As previously reported, a number of targets with oxide copper mineralization have been identified in the Sapo-Carrizo area. The first drill holes will test the Carrizo Ridge target which is located central to the district along the mineralized trend and has been interpreted as a centre with coincident intersecting structures, strong hydrothermal brecciation and alteration, and associated strong magnetic anomalies. The drilling is expected to be completed by the end of October and is being financed by a subsidiary of Glencore International AG ("Glencore") on an earn-in phase on the 1000 hectare Sapo-Carrizo area.
At Luz del Cobre, open pit mining has started with the oxide ore being stockpiled adjacent to the crusher platform. The jaw crusher is in the process of being installed and progress on the lining of the valley leach pad suggests that first stacking of ore should begin by the end of November.
Construction of the Solvent Extraction-Electrowinning (SX-EW) Plant is proceeding well, with first production of copper cathodes expected by the end of January, 2009. Field activity started in November 2007, and currently all major capital cost items have been contracted or committed. The project was initially expected to take 12 to 15 months to put into production, so remains on schedule. Capital costs are expected to approximate $36 million, which is 40% over the November 2006 feasibility study estimate. The economic viability of the project is not particularly sensitive to capital cost increases, with the cash flow before interest and income taxes expected to exceed the capital cost within the first two years of production. The 2006, NI 43-101 ore reserves provide for a five and a half year mine life, producing 73 million pounds of copper. At a cash cost of $1.55 per pound and an assumed copper price of $3.36, the net cash flow before interest and taxes would be $138 million.
Glencore is currently providing US$22 million toward the capital cost under the financing agreement. As previously reported, Glencore has to right to purchase all of the copper production at the London Metal Exchange price at the time of delivery. Discussions are continuing with Glencore and other interested parties regarding the funding of the increased capital cost and working capital requirements of the project.
Zaruma Resources Inc. is a pre-production, mineral exploration company listed on The Toronto and Frankfurt Stock Exchanges (symbol: ZMR). Common shares currently outstanding: 117,608,747.
This News Release contains forward-looking statements which are typically preceded by, followed by or including the words "believes", "expects", "anticipates", "estimates", "intends", "plans" or similar expressions. Forward-looking statements are not guarantees of future performance as they involve risks, uncertainties and assumptions, including, but not limited to securing funding to continue its development programmes.
SOURCE: Zaruma Resources Inc.