Vena Moves Azulcocha Project to Development Phase
TORONTO, ON - Vena Resources Inc. reported that planning is in progress with a partner to begin a pilot test program and final economic assessment of the Azulcocha tailings deposit in Peru. A NI 43-101 compliant probable reserve estimate for the tailings of 908,400 tons grading 3.27% zinc, 10.04% manganese and 1.13 gpt gold was announced in July 2005 and metallurgical testing showed that a marketable zinc concentrate grading over 55% zinc can be produced at a total recovery of 66% and a manganese dioxide product can be produced at a total recovery of 71.1%. Gold credits were not used as part of the 2005 pre-feasibility study economic assessment.
The pre-feasibility study was based on a plant production rate of 500 tonnes per day generating two saleable products - manganese dioxide and a zinc concentrate. The base case results of the analysis indicated that the project is economic, returning a net present value of US$37,200,000 and an internal rate of return of 157%. The study used a zinc metal price of US$0.50 per pound and manganese dioxide price of US$0.70 per pound, which are well below current and forecasted prices for the next few years. Key components of the capital assets required to achieve these financial results have already been purchased by the Company, including a zinc floatation mill capable of processing up to 1,400 tpd as well as the installation of a 3 MvA electrical substation and additional supporting infrastructure.
The Azulcocha tailings Probable Ore Reserve of 908,400 tonnes contains approximately 30,000 tonnes of zinc metal and 91,000 tonnes of manganese metal. Vena expects that pilot testing using current metallurgical methods should improve the published total recoveries achieved previously.
If pilot testing confirms the economics of the project, the Company plans to move forward with permits to begin the re-processing operation of the tailings deposit. Cash flow from this operation will fund final construction of a much larger tailings deposit capable of containing 3 to 4 million tons of new tailings expected from the eventual underground operation as well as any additional resources found on the mine property and the adjoining Azulcocha West joint venture project with Glencore.
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