Resource Estimate
An independent resource estimate for the Crypto project was completed in late 2009 by Mine Development Associates (“MDA”) of Reno, Nevada. Their estimate can be summarized as follows:
a large global resource of zinc, copper and indium at a cutoff of 3% Zn equivalent (ZnEq):
|
Category |
Tonnes |
% ZnEq |
% Zn |
% Cu |
g/t In |
Lbs Zn |
Lbs Cu |
Kg In |
|
Indicated |
6,298,000 |
6.87 |
4.75 |
0.322 |
46.2 |
659,482,000 |
44,752,000 |
291,000 |
|
Inferred |
15,832,000 |
6.95 |
5.08 |
0.359 |
34.9 |
1,774,360,000 |
125,446,000 |
551,900 |
which includes a significant volume with higher grades at a cutoff of 6% ZnEq:
|
Category |
Tonnes |
% ZnEq |
% Zn |
% Cu |
g/t In |
Lbs Zn |
Lbs Cu |
Kg In |
|
Indicated |
2,659,000 |
10.48 |
8.01 |
0.369 |
54.5 |
469,349,000 |
21,621,000 |
144,900 |
|
Inferred |
7,184,000 |
10.22 |
8.04 |
0.441 |
38.4 |
1,273,108,000 |
61,497,000 |
262,300 |
Resource figures reported on a zone by zone basis can be summarized as follows:
|
Zone/ |
Cutoff ZnEq% |
Tonnes |
ZnEq% |
% Zn |
% Cu |
g/t In |
Lb Zn |
Lb Cu |
Kg In |
|
Sulphide |
|||||||||
|
Indicated |
3.00 |
5,800,000 |
6.60 |
4.44 |
0.309 |
48.8 |
568,151,000 |
39,446,000 |
283,100 |
|
Inferred |
3.00 |
13,805,000 |
6.83 |
4.84 |
0.372 |
37.4 |
1,472,057,000 |
113,191,000 |
516,400 |
|
Indicated |
6.00 |
2,411,000 |
9.91 |
7.43 |
0.329 |
58.3 |
394,929,000 |
17,491,000 |
140,700 |
|
Inferred |
6.00 |
6,297,000 |
9.91 |
7.62 |
0.443 |
41.7 |
1,057,338,000 |
61,497,000 |
262,300 |
|
Oxide |
|||||||||
|
Indicated |
1.00 |
1,114,000 |
5.48 |
4.54 |
0.263 |
10.31 |
111,413,000 |
6,449,000 |
11,500 |
|
Inferred |
1.00 |
4,644,000 |
4.45 |
3.73 |
0.165 |
12.55 |
382,312,000 |
16,932,000 |
58,300 |
Note: base case in bold
The lower cut-off used for the oxide material (1.00% ZnEq) reflects the potential for open-pit mining scenarios for this near-surface material. Pit cones developed using the stated metal prices, recoveries, and costs indicate that the great majority of oxide material at the 1.00% ZnEq cut-off can be mined using open-pit methods. Indium was not included in the zinc-equivalent cutoff grade calculation for oxide mineralization.
MDA noted that a significant proportion of the resources classified as Inferred would have been categorized as Indicated if only zinc and copper values were considered. However, because indium was not assayed in historical work, the lower overall density of samples with indium assays resulted in an Inferred designation for a significant proportion of mineralization that otherwise would have been classified as Indicated. They stated that there is excellent potential to upgrade a significant portion of the Inferred resource to a higher classification simply by adding indium sample assays, the net effect of which would also likely increase its indium grade. In addition, mineralization is open for expansion in three directions and there is very good potential to discover additional zones away from existing resources.
MDA’s report recommends that a Preliminary Economic Assessment (PEA) be completed together with a US$7 million Phase One program of drilling, metallurgical optimization studies and other work aimed at resource expansion and definition. Included in this program would be exploration drilling to follow up on numerous drill intercepts of significant molybdenum and high-grade silver-zinc-lead elsewhere on the property.
Contingent on positive results from Phase One, a Phase Two work program could include underground bulk sampling, drilling, metallurgical optimization and advanced engineering studies as well as baseline environmental work at an approximate cost of US$20 million and which would form the basis of at least a pre-feasibility study.
