Overview
- Pre-production capital
requirements $261 million
- Mill throughput of 2 million
tonnes of ore per annum- 6,000
tonnes per day
- Life of Mine 9.5 years
- Life of Mine Production: 239,000
tonnes of copper concentrate,
122,000 tonnes of lead concentrate
and 770,000 tonnes of zinc
concentrate
- Total Net Smelter Return Revenue
$1,246 million
- Further metallurgical studies
planned
- Excellent exploration upside
with additional drilling plans on
adjacent Camel Back Claims
June 5, 2013. Vancouver, BC; El
Nino Ventures Inc. ("ELN"and the
Company") (TSX.V: ELN; OTCQX: ELNOF
Frankfurt: E7Q) is pleased to announce
the results of an NI 43-101
Preliminary Economic Assessment ("PEA")
for the Murray Brook polymetallic
massive sulfide deposit, New Brunswick
(the "Project"). The results of the PEA
demonstrate the potential technical and
economic viability of establishing a new
mine and mill complex on the Murray
Brook property. The projected cash flows
indicate an after-tax NPV at a 5%
discount rate of $96.4 million, an IRR
of 11.4%, and a payback period of 5.4
years (see table 1). An NI 43-101
Technical Report will be filed on SEDAR
within 45 days of the date of this press
release.
Harry Barr, ELN's Chairman & CEO
commented, "The results of the PEA
clearly indicate that there is an
indicative basis for a mining project at
Murray Brook. There is excellent
potential to further enhance the
projected economics of the project,
through continued refinements in metal
recoveries as well as the potential to
augment existing resources by achieving
an exploration success on the adjacent
Camel Back claims. With forecasts of
increased metal demand and dwindling
supply, the positive PEA results for the
Murray Brook project provide ELN
shareholders with the potential to
benefit from the predicted upward trend
in zinc prices over the next few years".
Unless otherwise noted, all amounts in
this press release are expressed in
Canadian currency. The PEA is prepared
for 100% ownership of the project
revenues and expenditures. As noted
below, ELN holds a 35% interest in the
project. The PEA includes 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 PEA will be realized.
Table 1- Summary of 2013 Murray Brook
PEA Results
*Life of Mine
The PEA was prepared by P&E Mining
Consultants Inc. and the full results of
the study will be disclosed in a NI
43-101 Technical Report within 45 days
of the date of this press release. The
PEA was prepared under the supervision
of Eugene Puritch, P. Eng. of P&E Mining
Consultants Inc. Mr. Puritch is an
independent QP in accordance with NI
43-101 and has reviewed and approved the
technical information in this release.
The main conclusions from the PEA follow
below.
Mining and Mineral Processing
Life of Mine production on a diluted and
extracted basis for the Murray Brook
potentially economic portion of the
resource estimate is planned to be as
follows:
Table 2 - Murray Brook Potentially
Economic Portion of the Resource
Estimate
(1) Potentially economic portion of
the mineral resource estimate which
are not mineral reserves do not have
demonstrated economic viability.
This estimate of mineral resources
may be materially affected by
environmental, permitting, legal,
title, taxation, sociopolitical,
marketing, or other relevant issues.
(2) The quantity and grade of
reported potentially economic
Inferred resources in this
estimation are uncertain in nature
and there has been insufficient
exploration to define them as an
Indicated or Measured potentially
mineable mineral resource and it is
uncertain if further exploration
will result in upgrading them to an
Indicated or Measured potentially
economic mineral resource category.
(3) The potentially economic portion
of the mineral resource in this
press release was estimated using
the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and
Reserves, Definitions and Guidelines
prepared by the CIM Standing
Committee on Reserve Definitions and
adopted by CIM Council.
The PEA assumes the start of the open
pit mining operations at an average
annual process plant production rate of
2,000,000 tonnes per annum over a mine
life of approximately 9.5 years. The
envisaged mining operation is a
conventional open pit. Mining operations
will reach a sustained total annual
material movement of 11.6 million tonnes
using 11.5 m3 diesel hydraulic
excavators, 90 tonne haulage trucks, and
track mounted diesel powered drill rigs
with up to 100 mm diameter blastholes
drilled on 6 metre high benches.
The mined material will be processed
at a new 6,000 tonnes per day flotation
plant located on the Project site.
Three concentrates will be produced: 1)
copper-silver; 2) lead-silver; and 3)
zinc-silver. It is anticipated that the
concentrates could be processed at the
nearby Belledune Smelter or other
suitable facilities.
Site Infrastructure
The Project will benefit from
infrastructure, services and skilled
labour available in the Bathurst Mining
Camp. The Murray Brook Project site is
located 60 km west of the city of
Bathurst and is accessible year-round
from paved Provincial Highway 180 and a
6.5 km gravel access road. Project site
infrastructure is anticipated to
include:
-
Plant site and haul roads;
-
Administration buildings and assay
lab;
- Mine
maintenance garage, warehouse and
fuel storage facilities;
-
Fresh water supply and sewage
treatment; and
-
Lined tailings storage area
The proposed Murray Brook Project
mill and mine site is ideally located on
the access road to the open pit area.
The proposed processing plant site
is located on a ridge overlooking a
valley about 100 metres below. Several
lateral ridges form natural containment
dykes for at least two sides of a
tailings management facility. Power to
the site will be supplied by a 12 km
long transmission line connecting to the
Caribou Mine site and provincial grid.
The labour force for the construction
and operation of this project is
anticipated to be drawn from the
Bathurst area. The labour pool in this
area is highly skilled and experienced
in construction projects and mining
operations.
Financial Assumptions and Results
Total operating costs during the Life of
Mine is illustrated in Table 3:
Table 3-Projection of total operating
costs during the Life of Mine, Murray
Brook Project
Capital
costs are categorized as Initial Project
Capital and Sustaining Capital. Initial
Project Capital consists primarily of
mining equipment, process plant and
ancillary plant construction, initial
tailing storage, facility construction,
an allowance for water treatment, and
local infrastructure. Sustaining capital
consists of further additions to mining
equipment during production and
environmental and closure costs.
Table
4-Initial Project and Sustaining Capital
of Murray Brook Project
Metal prices
used in the PEA are based on the April
30, 2013 three year trailing prices
which are listed in Table 5 below.
Table 5-
Metal prices used in this study
Exchange Rate: $US:$CAD = 1
Project
and Exploration Upside
Further technical studies on the Murray
Brook Project will focus on additional
metallurgical studies designed to
evaluate potential techniques of
improving metal recoveries. The first
step is a small pilot plant project
proposal to test three to five tonnes of
drill core material.
The largest impact on the potential
value of the Murray Brook Project is
likely to be achieved by increasing the
mineral resource base available for
mining, thereby increasing the mine life
and (or) annual mill throughput.
Excellent potential exists for
additional discoveries along and
adjacent to the favourable geological
horizon which extends from the former
Restigouche Mine to the west of the
Murray Brook deposit deposit to
Trevali's productive stratigraphy could
significantly increase the scale of the
Murray Brook Project prior to
development. A 2,000 metre exploration
program is proposed to drill test five
priority geophysical and geochemical
anomalies this summer.
Qualified Persons Statement
The PEA was prepared under the
supervision of Eugene Puritch, P. Eng.
of P&E Mining Consultants Inc. Mr.
Puritch is an independent QP in
accordance with NI 43-101 and has
reviewed and approved the technical
information in this release. The
information in this release was reviewed
by Dr. William Stone, Executive Vice
President of Exploration of ELN and a
Qualified Person as defined by NI43-101.
About El Niño Ventures Inc. Bathurst
Projects
El Niño Ventures Inc. has two active
projects in the Bathurst Mining Camp;
1. Murray Brook Project
Murray Brook property is located 60 km
west of Bathurst and a portion of the
property is underlain by the Murray
Brook polymetallic massive sulfide
deposit. The property is supported by
excellent nearby infrastructure,
including paved roads, grid electricity
and communities to provide goods,
services and skilled labour (Figure
1).
Figure 1- Murray Brook and Camel Back
Location map in the Bathurst Mining Camp
ELN and
Votorantim Metals Canada Inc. "VMC" (who
is the operator of the joint venture
project) currently own 70% of the
project, of which 35% is held by each of
the two parties. Under a purchase
agreement signed by VMC on August 28,
2012 with Murray Brook Minerals and
Murray Brook Resources Inc.
(collectively the "Owners"), VMC acquired
the right to purchase the additional 30%
of the Murray Brook Project from the
Owners. The purchase agreement between
VMC and the Owners provides for a series
of staged payments totaling $6 million
over a five year period and provides for
a 0.25% NSR payable to the Owners after
one year of commercial production.
VMC provided ELN the option to purchase
an additional 15% in the project as
required by an underlying Amending
Agreement dated September 30, 2010
between Xstrata Zinc (now Glencore
Xstrata PLC), VMC and ELN (see reference
to the Tri-Party Agreement immediately
below). ELN did not elect to exercise
the option and consequently at this time
the Joint Venture remains at VMC 65%:
ELN 35%.
To date, more than 28,000 metres of
drilling has been completed with
encouraging results. In February 2012,
NI 43-101 resource estimation was
announced (see
news release). The Technical Report
is filed on
SEDAR.com and also available on
ELN's website. The new Preliminary
Economic Assessment Report, PEA, will be
filed on SEDAR within 45 days of the
date of this press release.
2. Bathurst Mining Camp Project (
Tri-Party Agreement):
Consists of an initial 4,712 claims in
the Tri‐Party Agreement with Xstrata
Zinc (now Glencore Xstrata) and VM
Canada, whereby VM Canada may incur
exploration expenditures of $10 million
over a period of 5 years to earn a 50%
interest. VM Canada may further increase
its interest to 70% by spending an
additional $10 million over two years.
Drilling and further exploration
activities have been planned for 2013.
Votorantim Metals Canada Inc.
Statement
Technical details in this news release
were provided by VMC whose professional
geologists conduct operations consistent
with mineral industry best practices.
VMC accepts no responsibility for this
news release or any inferences made from
the technical details provided herein.
About Votorantim Metals Canada Inc.
VMC is a subsidiary of Votorantim Metais
is a company that is part of the
Votorantim Group that was founded in
Brazil in 1918. The Votorantim Group
operates in twenty countries and has
over 40,000 employees. Votorantim Metais
is the largest electrolytic nickel
producer in Latin America and one of the
world's leaders in the production of
zinc, aluminum and nickel. Votorantim
Canada Metals Inc. in conjunction with
Glencore Xstrata PLC and El Nino
Ventures is operator of the Bathurst
Option and Joint Venture which is
actively exploring for base metal
deposits within the Bathurst Mining
Camp.
About El Nino Ventures Inc.
El Niño Ventures Inc. is an
international exploration company,
focused on exploring for zinc, silver,
copper, gold and lead in New Brunswick,
Canada and copper in the Democratic
Republic of Congo ("DRC").
On Behalf of the Board of Directors
"Harry Barr"
Harry Barr
Chairman & CEO
El Nino Ventures Inc.
Further Information: Tel: +1 604 685
1870 Fax: +1 604 685 8045
Email: info@elninoventures.com or visit www.elninoventures.com
650-555 West 12th Avenue, City Square, West Tower, Vancouver, B.C.,
Canada, V5Z 3X7
Neither the TSX Venture Exchange
nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Statements. Note: This
release contains forward-looking statements that involve risks and
uncertainties. These statements may differ materially from actual
future events or results and are based on current expectations or
beliefs. For this purpose, statements of historical fact may be
deemed to be forward-looking statements. In addition,
forward-looking statements include statements in which the Company
uses words such as "continue", "efforts", "expect", "believe",
"anticipate", "confident", "intend", "strategy", "plan", "will",
"estimate", "project", "goal", "target", "prospects", "optimistic"
or similar expressions. These statements by their nature involve
risks and uncertainties, and actual results may differ materially
depending on a variety of important factors, including, among
others, the Company's ability and continuation of efforts to timely
and completely make available adequate current public information,
additional or different regulatory and legal requirements and
restrictions that may be imposed, and other factors as may be
discussed in the documents filed by the Company on SEDAR (www.sedar.com),
including the most recent reports that identify important risk
factors that could cause actual results to differ from those
contained in the forward-looking statements. The Company does not
undertake any obligation to review or confirm analysts' expectations
or estimates or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events. Investors should not place undue reliance on forward-looking
statements. |
