Drilling Significantly Increased Resource and Produces Improved Mine Plan
Site activities continue to be funded with the $28.75 million line of credit provided by Mitsubishi. To date, the Company has drawn approximately 50% of the line of credit to fund long lead equipment items, and support ongoing project activities to maintain the target production schedule for mid 2011. Detailed engineering and site geotechnical excavations for the concentrator are progressing on schedule. The office and warehouse complex is now fully functional with: power, heat, water, telephones, internet, and sewerage. The Company and Merit Consultants International Inc. (Construction Manager) have completed refinements to the development program and have adjusted the construction schedule to take advantage of seasonal activities and the cost benefits of the current economic downturn. Prices for construction materials are currently more favourable than originally anticipated in the Feasibility Study. It is estimated that the project will provide employment for 200 construction workers at its peak and the ongoing operations will create 257 full time positions.
The Company reports that the 2008 drilling has been very successful in increasing the resource of the property to approximately 5 billion pounds of copper based on the updated resource prepared by Gary Giroux of Giroux Consultants Ltd. of Vancouver British Columbia, an independent qualified person as defined by Canada's National Instrument 43-101 and includes all of the Company's drilling up to the end of 2008.
Total tonnes to the mill under the updated production plan have increased by 20% above the feasibility study results and the mine life has been extended by three years. Average head grade in the first 10 years of operation has been increased 7.69% to 0.42% Copper, which resulted in payable copper increasing by 407 million pounds or 37% over the previously reported total in the feasibility study. Likewise, payable gold and silver were also up by 109,461 oz gold and 876,709 oz silver respectively over the life of the mine. This all combined has had a very positive effect on the valuation of the project.
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