ELG Mine Complex Reports High Grade

 

TORONTO, ON - Torex Gold Resources Inc. reported updated mineral resource estimate and mineral reserves estimate for its ELG Mine Complex (ELG), located in southwest Mexico. The announcement includes a maiden high grade, mineral reserve and mine plan for the Sub-Sill. The estimates were prepared in accordance with National Instrument 43-101 ("NI 43-101") and CIM Definition Standards.

Fred Stanford, President and CEO said, "This End-Of-Year (EOY) 2017, update of mineral reserves and resources for the ELG Mine Complex is really all about the underground discoveries at the Sub-Sill. (The mineral reserves and resources for the open pits remain largely unchanged except for depletion.) As anticipated, the Sub-Sill provides excellent near-term cash flow, and is open in at least three directions, which provides for the potential to extend that cash flow into the medium/long term. The engineers have done an excellent job in designing a projected low CAPEX operation to manage the complexities of the ore-body geometry. We look forward to continuing the drill program as soon as possible, with the objective of adding and upgrading mineral resources, and ultimately, to profitably extend the mine life."

A post pillar mechanized cut and fill mine plan has been designed using the updated Mineral Resource Estimation and geological model resulting in a high grade, Probable Mineral Reserve, of 0.48 million tonnes at 11.65 g/t Au for 180,000 gold ounces at an average in situ cut-off grade 4.60 g/t Au cut-off grade.

Three Cut-Off Grades were calculated to account for the affect of Cu grades on recoveries and used to guide the design of cut and fill production shapes. There are 6 mining zones in the mine plan which range in size from 40 - 100m length on strike, 40 - 200m on plunge and 3.5 to 25m thick dipping at an average 24°. The mine plan converts 71% of Indicated Mineral Resource Au ounces to Probable Mineral Reserve Au ounces.

Development and infrastructure construction were designed to provide access to the production areas, main ventilation via a second portal and to service the mining operations. The production, development and infrastructure construction were costed and scheduled in a financial model.

The mine plan is expected to deliver 480,000 tonnes of high grade (11.65 gpt Au) ore containing 180,000 Au ounces to the ELG Processing Plant over a 29-month period. The Mine is expected to ramp up over an 8-month period with estimated production of 76,000 tonnes at 15.30 g/t Au while main ventilation and electrical infrastructure are being established. Steady state production is expected to continue for 11 months with estimated production of 283,000 tonnes (850 tpd) at 11.40 g/t Au, the main constraint being backfilling rate. For the remaining 10 months, the mine plan is expected to deliver 120,000 tonnes (400 tpd) at 9.93 g/t Au.

Sub-Sill ore is expected to perform well in the existing Plant with expected Au recoveries ranging from 88.30% when Cu grade is less than 0.1%, 85.8% when Cu grade is between 0.1% and 1% and 80.1% when Cu grade is greater than 1%. The average expected recovery is 84.4% for the mine plan. The expected recoveries for Ag range from 67.3% when Cu grade is less than 0.1%, 37.1% when Cu grade is between 0.1% and 1% and 14.1% when Cu grades are greater than 1%. The average expected Ag recovery is 26.2% for the mine plan.

During steady state production (approximately 850 tpd), expected operating costs average $108.35/tonne, including $79.97/tonne mining cost, $19.33/tonne processing and $9.05/tonne in general administration (G&A). Over the 29-month mine plan, operating costs are expected to average $140.86 /tonne.

Total capital required to execute the mine plan is estimated to be $23M, of which, $22M will be spent in the first year. Of the total capital spend, $9.5M is needed for lateral development.