Press Release Source: Apogee Minerals Ltd.
Apogee Aims to Triple Metal Production at Its 100% Owned La Solucion Zinc-Lead-Silver Mining Operation, Bolivia
Wednesday October 10, 7:30 am ET
TORONTO, ONTARIO--(MARKET WIRE)--Oct 10, 2007 -- Apogee Minerals Limited ("Apogee") (CDNX:APE.V - News) has started the expansion project at its La Solucion zinc-lead-silver mine located approximately 40 kilometers north of La Paz in Bolivia.
According to David Gower, P.Geo., Chief Executive Officer of Apogee, "The objective is to triple the metal output within the next 15 months, with initial gains to be made by January, 2008 to take full advantage of the current very high prices for zinc and lead. Expanding production capacity at this time provides Apogee a great opportunity to participate in this exceptional base metal market."
The Company plans to invest US$3.9 million over the next four years of which US$2.8 million is to be invested during the next nine months. The balance relates to future tailings expansions, which will be done as the new capacity is required in 2010 and 2011.
The production gains are expected to be accomplished by completing improvements and expanding capacity in the mill and are supported by a revised mine plan that includes production through to the end of 2011. The key initiatives with respect to expanding mill throughput are:
1. Installation of additional flotation cells in the zinc circuit which will improve retention time and is expected to increase zinc recoveries from less than 70% presently to 85% in 2008 and to 90% by 2009. The additional flotation cells have been ordered and are expected to be installed by the end of 2007. This expansion will allow for reprocessing of historical tailings that contain more than 3% zinc at a rate of approximately 400 tonnes per day.
2. Install a new ball mill to increase the grinding capacity in the mill from 120 tonnes per day to 200 tonnes per day. This is expected to be completed by the end of the second quarter of 2008.
3. Construction of a new fully lined and engineered tailings facility that will allow for recycling of process water and allow access to historical tailings for reprocessing.
Helio Diniz, President of Apogee, stated "There are significant opportunities to improve this operation, the purchase of which was finalized by Apogee earlier this year, as it had been undercapitalized when metal prices were very low in the recent past. An almost immediate 20% improvement in zinc recoveries for relatively little cost is a very good example of the opportunities to extract greater value from this asset. With a modest capital commitment we will see a significant improvement in the operation and expect to realize a good return on the investment."
The expanded mine plan will be supported by ore remaining in the existing mines, the development of the recently discovered Hampaturi South Deposit, which occurs immediately adjacent to the current underground workings in the Hampaturi Mine, and from reprocessing approximately 183,000 tonnes of historical tailings that are grading an average of 3.0% zinc, 0.47% lead and 17.0 g/t silver. The grade in the tailings reflects the poor historical recoveries caused by inadequate flotation capacity and the tailings are located at two sites within 100 meters of the mill. A very important factor for the increased production is that the throughput for tailings will be approximately double that of ore as it will require limited additional grinding and operating costs will be minimal as there is no mining cost. While tailings are being processed, ore will be stockpiled, which ensures that mine production will keep pace with the expanded mill. Processing of the tailings will begin after the first phase of the new tailings facility is completed in approximately twelve months.
The new mine plan supports operating at the increased rate until the end of 2011. Management feels there is reasonable probability that operations will continue beyond that time as there is good potential to increase resources in the Hampaturi South area and in the newly discovered Rafaela Vein, both of which will be drilled starting in the coming weeks. Management forecasts production from the mine to ramp up to 6.0 million zinc equivalent pounds in 2008 and range from 7.5 million to 8.1 million zinc equivalent pounds per year from 2009 through 2011 (zinc equivalent is based on 70% contribution from zinc, 15% contribution from lead, and 15% contribution from silver which reflects the composition of the expected feed). For reference, management expects that production in 2007 will be approximately 2.7 million zinc equivalent pounds.
Mine management and employees at La Solucion are working to continuously upgrade safety and environmental practices at the site. The new tailings facility will provide a long term environmental benefit. The water treatment facilities have already been improved and initiatives are ongoing to increase safety awareness.
David Gower, P.Geo., CEO of Apogee who is a qualified person as defined by NI 43-101 has reviewed this release. With respect to the resource base supporting the mine plan, the resource estimate for the tailings is based on a combination of auger and reverse circulation drill holes. Grades were verified by completing a series of pits that were sampled and correlated well with the drill data. Machinery could not safely access the entire tailings area, however only approximately 183,000 tonnes of the estimated 365,000 tonnes of available tailings are included in the mine plan at this time.
About Apogee Minerals Limited
Apogee Minerals Ltd. is a Canadian producer of silver-zinc-lead and also carries out exploration and development activities. The company is listed on the TSX Venture Exchange under the symbol APE. Apogee is focused on advanced Silver-Zinc-Lead projects in South America that demonstrate the potential to be rapidly developed to production. Currently all of its projects are located in the historic silver producing regions of central and southwest Bolivia.
The 100%-owned La Solucion Mine has a 14 year production history and has a 120 tonne per day flotation mill. The Pulacayo-Paca project is a Joint Venture with Apex Silver Mines Ltd. The project occupies the Property that includes the second-largest silver mine in the history of Bolivia with over 600 million ounces of past production.
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