Breakwater Reports Mineral Reserve and Mineral
Resource Estimates
Breakwater
Resources Ltd. (TSX: BWR)(TSX: BWR.WT.A) announces its
mineral reserve and mineral resource estimates.
The
proven and probable mineral reserves at December 31, 2010 were estimated to
total 19.7 million tonnes grading 6.3% zinc resulting in a 6% tonnage increase
year-over-year. Specifically, mineral reserve tonnages at
Mochito increased by 24% due to gains from diamond drilling and the discovery
of new deposits. Measured and indicated mineral resource were estimated
to total 22.9 million tonnes grading 7.4% zinc, a 4% tonnage increase over 2010
primarily due to an increase at Mochito. Inferred mineral resources have been
estimated to total 10.0 million tonnes, representing a 13% decrease
year-over-year mainly due to a reduction at Toqui resulting from an upgrade of
certain inferred resources to the measured and indicated category and the
downgrading of certain inferred resources based on additional information from
the 2010 surface and underground exploration program.
Proven Mineral Reserves
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)
(g/t)(g/t) (000's) (%)
(%) (%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito
1,285 5.0 2.9 - 97 - 1,083 5.8
3.4 - 107 -
Toqui
1,229 5.4 0.3 - 13 4.6 807 6.5
0.3 - 8 4.4
Myra
Falls 5,350 4.7
0.4 0.9 43 1.3 5,369 4.9
0.5 0.9 44 1.3
Langlois
1,469 8.7 - 0.5 38 0.1 1,469 8.7
- 0.5 38 0.1
----------------------------------------------------------------------------
Total 9,333 5.5 - - - - 8,728 5.8 - - - -
----------------------------------------------------------------------------
Probable Mineral Reserves
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)
(g/t)(g/t) (000's) (%)
(%) (%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito
3,491 4.2 1.7 - 46 - 2,773 4.7
2.0 - 52 -
Toqui
2,296 7.5 0.4 - 13 1.2 2,517 7.2
0.3 - 9 2.3
Myra
Falls 905 6.0
0.6 1.1 42 1.6 865 6.2
0.6 1.1 42 1.6
Langlois 3,626
10.1 - 0.7 48 0.1 3,626 10.1 - 0.7
48 0.1
----------------------------------------------------------------------------
Total 10,318 7.2 - - - - 9,781 7.5 - - - -
----------------------------------------------------------------------------
Proven and Probable
Mineral Reserves
December 31, 2010 December
31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)
(g/t)(g/t) (000's) (%)
(%) (%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito
4,776 4.4 2.0 - 60 - 3,856 5.0
2.4 - 68 -
Toqui
3,525 6.7 0.4 - 13 2.4 3,324 7.0
0.3 - 9 2.8
Myra
Falls 6,255 4.9
0.5 0.9 43 1.3
6,234 5.1 0.5
0.9 44 1.3
Langlois
5,095 9.7 - 0.6 45 0.1 5,095 9.7
- 0.6 45 0.1
----------------------------------------------------------------------------
Total 19,651 6.3 - - - - 18,509 6.7 - - - -
----------------------------------------------------------------------------
Measured Mineral
Resources(i)
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)(g/t)(g/t)
(000's) (%) (%)
(%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito 1,353 5.7
3.1 - 106 - 1,152 6.8
3.7 - 118 -
Toqui
1,495 6.5 0.3 - 13 4.0 1,004 7.6
0.2 - 7 3.8
Myra Falls
5,591 6.3 0.6
1.1 56 1.6 5,610 6.6
0.6 1.2 57 1.6
Langlois
2,398 9.4 - 0.6 41 0.1 2,398 9.4 - 0.6 41 0.1
----------------------------------------------------------------------------
Total
10,837 6.9 - - - - 10,164 7.4
- - - -
----------------------------------------------------------------------------
Indicated Mineral
Resources(i)
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)(g/t)(g/t)
(000's) (%) (%)
(%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito 3,776 4.9
1.9 - 52 - 3,050 5.5
2.3 - 60 -
Toqui
3,049 8.3 0.6 - 17 1.1 3,644 8.1
0.4 - 11 1.9
Myra Falls
958 7.9 0.8
1.4 56 2.1 911 8.2
0.8 1.4 56 2.1
Langlois
4,261 10.4
- 0.7 51 0.1 4,261 10.4 - 0.7 51 0.1
----------------------------------------------------------------------------
Total
12,044 7.9 - - - - 11,866 8.3
- - - -
----------------------------------------------------------------------------
Measured and Indicated
Mineral Resources(i)
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)(g/t)(g/t)
(000's) (%) (%)
(%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito 5,129 5.1
2.2 - 66 - 4,202 5.9
2.7 - 76 -
Toqui
4,544 7.7 0.5 - 16 2.1 4,648 8.0
0.4 - 10 2.3
Myra Falls
6,549 6.5 0.6
1.2 56 1.7 6,521 6.8
0.6 1.2 57 1.7
Langlois
6,659 10.0
- 0.7 47 0.1 6,659 10.0 - 0.7
47 0.1
----------------------------------------------------------------------------
Total
22,881 7.4 - - - - 22,030 7.8
- - - -
----------------------------------------------------------------------------
(i) Includes proven and
probable reserves but excludes inferred resources
Inferred Mineral
Resources
December 31, 2010
December 31, 2009
----------------------------------------------------------------------------
Tonnes Zn Pb Cu Ag Au Tonnes Zn Pb Cu Ag Au
(000's)
(%) (%) (%)(g/t)(g/t)
(000's) (%) (%)
(%)(g/t)(g/t)
----------------------------------------------------------------------------
Mochito 3,545 4.4
2.1 - 42 - 3,330 4.5
2.1 - 46 -
Toqui
1,761 6.7 0.7 - 19 0.6 3,545 7.7
0.4 - 15 1.0
Myra Falls
3,181 8.1 0.9
1.1 109 2.3 3,172 8.1
0.9 1.1 110
2.3
Langlois
1,543 8.0 - 0.5 44 0.1 1,543 8.0 - 0.5 44 0.1
----------------------------------------------------------------------------
Total
10,030 6.5 - - - - 11,590 6.9
- - - -
----------------------------------------------------------------------------
NOTES
TO INVESTORS CONCERNING ESTIMATES
The
mineral reserves and mineral resources set forth in this news release were
prepared in accordance with National Instrument 43-101 ("NI 43-101").
Cautionary
note to investors concerning estimates of Measured and Indicated Resources.
This
news release may use the terms "measured resources" and
"indicated resources". Investors are cautioned not to assume that any
part or all of the mineral deposits in these categories will ever be converted
into reserves.
Cautionary
note to investors concerning estimates of Inferred Resources.
This
news release may also use the term "inferred resources".
"Inferred resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral resource will
ever be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or
prefeasibility studies, except in rare cases. Investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.
Metal
Price Assumptions
For
the December 31, 2010 mineral reserve and mineral resource estimates, metal
prices, used to determine economic viability were US$1.10/lb. zinc, C$/US$
exchange rate of 1.09, US$870/oz. gold, US$14.42/oz. silver, US$3.05/lb. copper
and US$0.89/lb. lead. The metal prices used represent the approximate
historical five year average for each metal from 2006 to 2010.
Scientific
and Technical Data
The
Company is reporting mineral resource and reserve estimates in accordance with
the CIM Definition Standards for Mineral Resources and Mineral Reserves (the
"CIM Guidelines") for the estimation, classification and reporting of
resources and reserves. The Canadian Securities Administrators' NI 43-101
requires mining companies to disclose reserves and resources using the
subcategories of "proven" reserves, "probable" reserves,
"measured" resources, "indicated" resources and
"inferred" resources in accordance with the meanings ascribed to
those terms in the CIM Guidelines. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
A
mineral reserve is the economically mineable part of a measured or indicated
resource demonstrated by at least a preliminary feasibility study. This study
must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting,
that economic extraction can be justified. A mineral reserve includes diluting
materials and allowances for losses that may occur when the material is mined.
A proven mineral reserve is the economically mineable part of a measured
mineral resource demonstrated by at least a preliminary feasibility study. This
study must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of
reporting, that economic extraction is justified. A probable mineral reserve is
the economically mineable part of an indicated and, in some circumstances, a
measured mineral resource demonstrated by at least a preliminary feasibility
study. This study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that demonstrate, at the
time of reporting, that economic extraction can be justified.
A
mineral resource is a concentration or occurrence of diamonds, natural solid
inorganic material, or natural solid fossilized organic material including base
and precious metals, coal, and industrial minerals in or on the Earth's crust
in such form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge. A measured mineral
resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape, and physical characteristics are so well established
that they can be estimated with confidence sufficient to allow the appropriate
application of technical and economic parameters, to support production
planning and evaluation of the economic viability of the deposit. The estimate
is based on detailed and reliable exploration, sampling and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity. An indicated mineral resource is
that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably assumed. An
inferred mineral resource is that part of a mineral resource for which quantity
and grade or quality can be estimated on the basis of geological evidence and
limited sampling and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and sampling gathered
through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes.
Investors
are cautioned not to assume that part or all of an inferred resource exists, or
is economically or legally mineable.
The
effective date of the Company's mineral reserve and mineral resource estimates
is December 31, 2010. The 2010 estimated measured and indicated mineral
resource and the estimated inferred mineral resource were prepared under the
supervision of Torben Jensen, P.Eng., who is employed by the Company as Vice
President, Engineering and who is a Qualified Person under NI 43-101.
Mochito
The
qualified person responsible for the Mochito mineral reserve and mineral
resource estimates is Daniel Goffaux, P.Eng., Vice President, Latin America.
The
mineral resource and mineral reserve estimates for the Mochito mine are
developed using Gemcom modeling software utilizing a 4% zinc equivalent cut-off
grade.
Block
models have been created for the various zones using an inverse distance
squared interpolation with block dimensions of three metres wide by three
metres long by 3.7 metres high (except for the Palmar Dyke that has three metre
high blocks). Ellipsoid sizes and shapes are determined by the style of
mineralization (i.e. manto or chimney style mineralization).
The
block model is constrained by geological solids of the various deposits that
limit the reserve category (i.e. one rock code is used for areas interpreted to
be predominantly measured and indicated whereas other rock codes are used to
limit the resource category to inferred where the degree of confidence in the
geological interpretation is lower). Geological solids identified as being
predominantly measured and indicated are categorized according to the search
ellipse parameters outlined in the table below. Geological solids defined as
Inferred can only host inferred resources.
----------------------------------------------------------------------------
East-West North-South
Elevation
Mineralization Type
Category
(radius)
(radius)
(radius)
----------------------------------------------------------------------------
Manto
Measured 7.6
metres 7.6 metres 4.5 metres
Indicated 22.9
metres 22.9 metres 9.1 metres
Inferred 45.7
metres 45.7 metres 18.2 metres
----------------------------------------------------------------------------
Chimney
Measured 7.6 metres 7.6 metres 7.6 metres
Indicated 22.9
metres 22.9 metres 22.9 metres
Inferred 45.7
metres 45.7 metres 45.7 metres
----------------------------------------------------------------------------
The
block model is constructed on the basis of the original in-situ shape of the
deposit. Other solids are created of the mined part of the deposit.
Unrecoverable pillars are considered to have been mined and are included in the
solid of the mined part of the deposit. Sill pillars beneath existing workings
are taken as two metres thick since part of the sill pillar will be taken on
retreat as a sawtooth back.
The
geological solid is trimmed against the solid of the mined area to produce the
final solid which represents the geological resource. All material within the
resource solid is taken as part of the mineral resource regardless of the grade
of individual blocks (blocks below cut-off grade are accepted as internal
dilution).
All
grade estimates are based upon diamond drill hole intersections. Geological
solids are created by snapping to the exact point of the drill hole
representing the contact interpreted by the geologist. Solids are assigned rock
codes representing the mineralization type (chimney or manto) as well as the
maximum resource category allowed by the geologist (measured and indicated or
inferred). Rock codes from the solids are applied to the drill hole database and
that part of the drill hole within the solid is composited into three metre
lengths. Missing sample intervals are assigned a grade of zero except in the
case of the Barbasco, Imperial, Port Royal, and McKenney Chimneys where
unsampled intervals are not represented in the composites due to challenges
associated with the geological interpretation of these highly complex and
irregular deposits.
The
composites are converted into three dimensional ("3D") points that
are used for the grade estimate of individual blocks according to the
interpolation parameters and search ellipses discussed above. Each 3D point has
an associated rock code. The rock code of the block and the 3D point must be
the same for the grade to be calculated (i.e. only chimney intersections can be
used to calculate the grade of chimney deposits and only manto intersections
are used to calculate the grade of manto deposits). Blocks identified as
inferred resources are allowed to draw upon points defined as having a higher
degree of confidence.
The
geological solids of the measured and indicated resources are reviewed by the
engineering group to determine which can be economically extracted. Those
solids that are identified as profitable are converted to mineral reserves by
diluting the block grades to account for sandfill and wall rock dilution.
Sandfill dilution has been historically accepted as 8%. Wall rock dilution is
assigned on the basis of the surface area to volume relationship as well as
historical factors. Mining losses are applied to account for planned pillars.
Geological losses are applied where there is concern that part of the resource
will not be recovered. The diluted grade for the solid must be greater than 4%
zinc equivalent based upon the long-term metal prices used for mineral resource
and mineral reserve calculations. Blocks within the solid that are below the
cut-off grade are considered to be internal dilution.
Toqui
The
qualified person responsible for the Toqui mineral reserve and mineral resource
estimates is Daniel Goffaux, P.Eng., Vice President, Latin America.
The
mineral resource and mineral reserve estimates for Toqui are developed in a
two-stage process using Gemcom modeling software. First, all mineral resources
are estimated for the main manto unit at a minimum height and cut-off grade
based upon metal prices, costs, recoveries and other considerations. Second,
mineral reserves are estimated by applying a series of recovery factors and
dilution to the mineral resources.
Initially,
geological solids are constructed from the drill hole information. A minimum
four metre height is applied to the solid with the side limits not exceeding 50
metres from each economic drill hole. The floor and back dimensions are limited
by the zinc equivalent cut-off grade. Block models are then created for the
various zones using an inverse distance squared interpolation. The block models
are constrained by the geological solids of the various deposits.
The
geological solids of the measured and indicated resources are reviewed by the
engineering group to determine which can be economically extracted. Those
solids that are identified as profitable are converted to mineral reserves by
applying dilution factors based on operational and geological factors as well
as recovery factors which vary depending on the mining method planned to
extract a particular portion of the deposit.
Depending
on the deposit, dilution is added at a variable rate of between 6% and 19%. In
areas where room and pillar mining is carried out, a general recovery factor of
80% is used before dilution and pillar recovery. A 50% recovery factor is used
for the pillars. Specific areas are designed differently if rock quality is low
or other issues exist. Geo-mechanical studies are in process to improve
recoveries further. In the case of the drift and fill method, a recovery factor
of 98% is used.
Myra
Falls
The
qualified person responsible for the Myra Falls mineral reserve and mineral
resource estimates is Rick Sawyer, P.Geo. (BC), Chief Geologist, NVI Mining
Ltd.
The
mineral resource and mineral reserve estimates for the Myra Falls mine are
developed using Gemcom modeling software. Separate block models are maintained
for the HW, Battle-Gap, Extension, Lynx Level 6, Ridge, Price and Marshall
Zones. An historic model created with the Mine Sight modeling software is
available for Lynx below level 6. The drill hole databases, from which these
models were built, are constantly being updated, and intermediate resource
models are calculated periodically.
The
block model mineral resources are classified into measured, indicated and
inferred categories based on the distance of a block from its nearest
composite. Areas with lower levels of confidence in the geological
interpretation are clearly identified as inferred resources by assigning a
unique rock code to these areas.
Mineral
resources comprise mineralized areas which:
i. have been drilled and/or otherwise
sampled to the knowledge level of
measured or indicated
mineral resources;
ii. are considered
accessible and extractable from currently active mine
workings and are included in
the current mining plan; and
iii.have an NSR value
equal to or exceeding a predetermined cut-off value.
A
separate extraction factor and dilution rate is applied to each mining area to
estimate mineral reserve tonnages and grades. The result is regarded as a
mineral reserve with proven and probable status.
Langlois
The
qualified person responsible for the Langlois mineral reserve and mineral
resource estimates is Torben Jensen, P.Eng., Vice President, Engineering.
The
mineral resources and mineral reserves at Langlois and Grevet B mines are
estimated using 3D block models with information derived from diamond drilling
and underground chip sampling across development faces. For each drill hole
intersection and underground face sample, intersects were generated and
identified with their own vein number. Based on mining method and design, a
variable minimum mining width was considered to define each intersect used in
the resource estimate. A 3D wire frame model was constructed for each sulphide
zone and then a block model was constructed based on this interpretation. Block
model dimensions are five metres high by five metres long by one metre wide
which reflects the elongated narrow lenses.
Limits
of each zone are determined visually on plan views and vertical sections based
on geology, underground openings, sulphide abundance and mineralogy. An
arbitrary lower zinc cut-off was not used for determining the limits of the
zones. Assay data for zinc, copper, silver, gold and lead are density-weighted
and composited in one metre increments over the true thickness intersect of
each zone. Variography analysis and 3D block model interpolation was performed
on the one metre composites for all elements.
Langlois
and Grevet B contain nine different lenses and each one has been statistically
treated as a specific geological domain. Grades for individual blocks in the
model have been defined by inverse distance square interpolation using a
minimum of two samples and maximum of 12. Variography analysis was carried out
and search ellipses were defined for each lens. According to a statistical
review of all tagged assays, capping of the zinc, copper, silver, gold and lead
has been applied on assays and then extrapolated to one metre composites. Each
lens has a specific cut off for drill hole and chip assays. Drill holes or
underground samples that did not intersect the entire width of the mineralized
zone were discarded from the calculation.
The
Langlois and Grevet B mineralization contains significant values for three
elements: zinc, copper and silver. An NSR value is determined for each metal
unit. These metal units are then used to calculate the NSR value of each
interpreted block while determining the resource estimates. Zinc, copper and
silver grades of each block have been converted into dollar values based on the
smelter parameter.
The
minimum mining width used for interpretation of the lenses at Grevet B is two
metres. For Langlois, the minimum mining width used was three metres in Zones 3
and 4 and 2.2 metres in Zones 97 Main, North and South. All lenses were
interpreted from drill holes, chip samples and underground development
projected on various level plans from surface to 800 metres below and
transversal sections were developed every 10 or 15 metres over a strike length
of about 2,000 metres.
The
mineral reserves are estimated by applying mining recovery and dilution to the
measured and indicated resources. Minimum mining widths are applied including
three metres for Zones 3 and 4, 2.2 metres for Zone 97 and two metres for
Grevet B. The mineral reserves consist of contiguous zones of mineralization
delineated in the geological model, while isolated areas were not included.
Anticipated dilution and recovery for the planned mining method and stope
dimensions for Zones 3 and 4 is according to the historic mining information.
The dilution and recovery for Zone 97, excluding pillars is comparable to the
historical rates realized in Zones 3 and 4.
Forward-looking
Statements
The
information in this news release has been prepared as at December 31, 2010.
Certain information included in this news release constitutes "forward-looking
statements". The words "expect", "will",
"intend", "estimate" and similar expressions identify
forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies. The Company cautions the reader
that such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from the Company's
estimated future results, performance or achievements expressed or implied by
those forward-looking statements and the forward-looking statements are not
guarantees of future performance. These risks, uncertainties and other factors
include, but are not limited to, risks associated with the mining industry such
as government regulation, environmental and reclamation risks, title disputes
or claims, success of mining activities, future commodity prices, costs of
production, possible variation in mineral reserves, mineral resources, grade or
recovery rates, failure of plant, equipment or processes to operate as
anticipated, accidents, labour disputes, the timing of estimated future
production, capital expenditures, financial market fluctuations, requirements
for additional capital, conclusions of economic evaluations, limitations on
insurance coverage, risks associated with using third-party contractors,
inflation as well as those factors discussed in the Company's most recent
Annual Information Form on file with Canadian provincial securities regulatory
authorities.
The
Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future
events or otherwise, except as required by applicable law.
Contacts:
Breakwater Resources
Ltd.
Torben Jensen, P.Eng.
Vice President,
Engineering
(416) 363-4798 Ext. 232
TJensen@breakwater.ca
Breakwater Resources
Ltd.
Ann Wilkinson
Vice President, Investor
Relations
(416) 363-4798 Ext. 277
AWilkinson@breakwater.ca