AmMex
Gold Reports Scoping Study on their Castle Copper / Molybdenum Project with
28.3% IRR
AmMex Gold Mining Corp.
(OTCBB: AMXG) (FWB: R5E) (WKN: A0KE72) is pleased to announce the results of a
recently completed scoping study by John Hedges. This study examined the
economics of the Castle Copper / Molybdenum deposit located in Yavapai County, Arizona.
The deposit was drilled in the 1960’s through to the early 1990s by
numerous mining companies which outlined a secondary enrichment blanketed about
90 feet thick totalling approximately 40 million tons at depths approaching
2000 feet. Based on several holes drilled outside of this resource area, there
is potential for discovery of additional tonnage with similar grades.
The scoping study, based
on 40 million tons, a head grade of 1.53% copper and 0.036% molybdenum, used an
8,000 and 10,000 ton per day production rate with both floatation and solvent
extraction recovery methods. The prices used for this study are $1.50 per
lb. copper and $12.00 per lb. molybdenum. This scoping study was an update of a
similar economic analysis done by Watts,
Griffis and McQuat in 1992, with up-to-date costs incorporated. No provisions
were made for precious metal credits in this valuation.
The internal rate of
return calculated by John Hedges based on a 330 day per year operating schedule
were:
8,000tpd -Floatation
– 28.3%
10,000tpd -Floatation– 28.7%
Solvent Extraction
–
20.0%
Solvent Extraction – 22.0%
Conclusion by John Hedges
Based upon my review of the project data and the cost structure
developed by WGM and updated in this report the project would appear to have
the potential to become a profitable midsized copper-moly producer. In the
absence of any metallurgical testing, it would appear that concentrating the
ores using a flotation circuit would be the likely option to pursue based
solely on the economics shown here.
The selection of 8,000 and 10,000 tpd production rates seems rather
arbitrary. The life of the mine and the production rate should be
examined with a view to optimizing rate of return when more concrete
information on the reserves and metallurgy is available. I suspect that a
lower production rate would actually have better economics due to lower capital
requirements.
The results achieved at current metal prices are outstanding.
For the full report visit our website at:
http://www.ammexgoldmining.com/_documents/AMMEXCASTLECOPPER_3.pdf
John Hedges has more than
35 years management experience in the mining, engineering/construction and
financial industries. From 1993 to present, Mr. Hedges has been an Independent
Consultant to both small and large banks and corporations, hedge funds and
private investors. He has assisted in mergers and acquisitions, asset
valuations for regulatory agencies bankruptcies, asset appraisals, market
analyses, and investment portfolio analysis. Mr. Hedges had key roles in the
structuring and successful financing of major mining, industrial and
infrastructure projects worldwide with particular emphasis on the Americas. This
included most of the copper mines developed in the 1980’s (Escondida,
Tintaya, Chuquicamata expansion, Cananea expansion, Cerro Verde, Ok Tedi) and
many of the Gold mines of North America in the
early 1990’s.
Mr. Hedges has a B.Sc.,
Geology, Engineering Geology, and Hydrogeology from Concordia University.
He has also completed post graduate studies at McGill University
in Professional Development Mineral Economics.
About
AmMex Gold
AmMex Gold Mining Corp. is a precious metals exploration and development
company. It is management's objective for AmMex Gold to become a gold and
precious metals producer by developing projects in Mexico
and Nevada,
and by acquiring other advanced-stage projects and/or producing mines in proven
precious metal districts throughout the world. The Company trades on the OTC
market under the symbol “AMXG” and on the Frankfurt Exchange under
the symbol “R5E”. For more information, please visit the
Company’s website at www.ammexgoldmining.com (Available in English
and German).
AmMex Gold Mining Corp
Bill Reed, VP of
Exploration
Tel: 520.907.9986
Investor Relations:
613.226.7883