Adex Mining Inc. ("Adex" or the "Company") (TSX VENTURE:ADE) is pleased to
announce the results of a new Preliminary Assessment ("PA") on its wholly-owned
Mount Pleasant Mine Property ("Mount Pleasant" or the "Property") located in
southwestern New Brunswick, Canada. Mount Pleasant is the site of a
past-producing tungsten-molybdenum underground mining operation, which operated
during the 1980s. This PA is a preliminary technical and economic assessment of
the production of tin, indium and zinc products from the North Zone ("NZ") of
the Property.
The results of the PA indicate that there are two viable production options for
the NZ, including the production of tin concentrate, indium sponge and zinc
metal and the production of tin concentrate and zinc-indium concentrate. Based
on a 10-year project life and production rate of 850 tonnes per day ("tpd"), the
PA shows pre-tax internal rates of return ("IRR") for the tin concentrate,
indium sponge and zinc metal production option and the tin concentrate and
zinc-indium concentrate production option of 28.87% and 23.49% respectively as
shown in the table below.
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Option 1 Option 2
Production of Production of
Tin Concentrate, Tin Concentrate
Indium Sponge and Zinc-Indium
and Zinc Metal Concentrate
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Pre-tax IRR 28.87% 23.49%
After-tax IRR 23.94% 19.30%
After-tax Net Present Value
("NPV") (discounted at 8%) $54.2 million $21.5 million
Pre-production capital $71.1 million $41.2 million
Production rate 850 tpd 850 tpd
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"These are exciting times for Adex," said Errol Farr, President and CEO of Adex.
"The PA results reinforce Adex's plans for piloting the concentrate and metals
flowsheets as a next phase leading to definitive feasibility and production. The
NZ development is an integral part of Adex's overall strategy for producing tin,
indium, zinc, tungsten and molybdenum from the resources at the Property."
NZ production is based on the economic assessment of the resource over a 10 year
mine life, and on conceptual mining and metallurgical processing methods as well
as end-user standard revenue agreements. The PA indicates that the in situ
outlined mineable blocks total 2,894,579 tonnes grading 0.76% tin, 191 grams per
tonne ("gpt") indium, and 1.91% zinc. The actual production rate of 850 tpd was
determined by applying a 10% dilution factor with 85% mining extraction.
Results from previously completed metallurgical test programs characterizing the
recovery of tin, indium and zinc from the NZ resource were used to design a
conceptual process flowsheet using flotation and gravity separation. A dynamic
process simulation and economic model was used to assess the economic potential
of the resource by varying tonnage, grade and prospective revenue generation for
value-added products. Value-added products to be produced on site include indium
sponge and zinc metal from chloride hydrometallurgy.
The PA is considered to be accurate within minus 10% to plus 35% on the basis of
the:
- purchase of new and refurbished equipment;
- installation costs defined by factored estimates relative to industry
trends;
- local labour and power rates and budget fuel and reagent costs;
- mining costs based on use of new equipment;
- minimum refurbishment of existing infrastructure, including the mine
access adit, processing buildings and facilities, electrical services,
and process, potable and fire water distribution systems, and:
- product revenue determined from standard smelter off-take agreements
(smelter schedules) and published metal pricing for a three year average
up to the second quarter 2009.
The preliminary NZ technical/economic assessment including site administration,
mining, processing, environmental management and product marketing is summarized
below for the two processing options. Each model includes zinc flotation
followed by tin flotation.
Option 1 - Production of Tin Concentrate, Indium Sponge and Zinc Metal
Tin concentrate is produced using a combination of flotation and gravity
separation. The process is well documented from testwork completed on samples of
mineralized rock from the NZ by Cominco Engineering Services Ltd. ("CESL") and
Lakefield Research (now SGS) during the 1990's.
Optimum process chemistry for the hydrometallurgical processing of zinc
concentrate is being defined by bench scale studies prior to piloting.
High-grade indium sponge and zinc metal are the target products, which rely on a
combination of leaching, solvent extraction and impurity precipitation stages.
Option 2 - Production of Tin Concentrate and Zinc-Indium Concentrate
Tin and zinc concentrate production are commercially proven process
technologies. The economics of the concentrate option are sensitive to the net
smelter return for indium contained in a zinc concentrate, which conceptually
could be 0.49% (4900 gpt) indium. A conservative indium pay factor of 15% yields
the results disclosed in this assessment.
Metallurgical and hydrometallurgical test programs designed to verify the
selected process technology, discussion with various zinc smelters regarding
revenue generation from zinc/indium concentrate, and discussion with indium
metal producers are currently ongoing. Adex has also opened dialogues regarding
tin concentrate sales with metal traders and off-shore tin smelters.
The PA includes a review by Trevor Boyd, P. Geo., the Company's Geological
Consultant and a qualified person as defined by National Instrument 43-101 ("NI
43-101"), of the NI 43-101 compliant mineral resource estimate for the NZ
completed by Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists
and Engineers, and SGS-Geostat Limited ("SGS") in May, 2009, a mine plan
provided by Andrew Hara, P. Eng., Senior Mining Engineer of Hara Mining
Enterprises Inc., a qualified person as defined by NI 43-101, and an economic
assessment of process alternatives, market evaluation, and environmental
management technology completed by Dean Thibault, P. Eng., Senior Process
Chemical Engineer of Thibault & Associates Inc., a qualified person as defined
by NI 43-101. Dean Thibault, P. Eng., Senior Process Chemical Engineer of
Thibault & Associates Inc., an independent qualified person and consultant to
Adex, is preparing a NI 43-101 compliant Technical Report with respect to the PA
which Adex will file on SEDAR within 45 days of today's date.
The mineral resource estimate for the NZ is contained in a Technical Report,
entitled "A Technical Review of the Mount Pleasant Property, Including a Mineral
Resource Estimate on the North Zone, Southwestern New Brunswick for Adex Mining
Inc.", dated May 6, 2009 and completed by Paul Dunbar, P.Geo. Senior Associate
Geologist of WGM and Robert de l'Etoile, Eng. Senior Geological Engineer of SGS,
which is available on SEDAR at www.sedar.com. Details of this NI 43-101
compliant mineral resource estimate are as follows:
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Sub-Zones Tonnes % Sn g/t g/t In % Zn % As %WO3 %MoS2 % Cu % Bi
In Capped
----------------------------------------------------------------------------
Indicated
Deep Tin 5,006,000 0.39 101.0 95.2 0.86 1.25 0.08 0.06 0.14 0.08
Endogranitic 4,336,000 0.55 21.8 20.3 0.28 0.85 0.12 0.06 0.10 0.09
Upper Deep
Tin 838,000 0.22 102.8 94.9 1.36 0.76 0.08 0.06 0.07 0.05
#4 Tin Lode 702,000 0.25 74.1 74.1 1.00 0.19 0.01 0.01 0.09 0.00
Total
Indicated 10,882,000 0.43 67.8 64.0 0.67 0.98 0.09 0.06 0.11 0.08
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Inferred
#1-3 Tin
Lode 2,345,000 0.18 76.8 73.5 1.08 0.28 0.02 0.03 0.09 0.01
#5 Tin Lode 1,267,000 0.15 115.4 111.3 1.50 0.70 0.07 0.04 0.08 0.03
North Adit 3,076,000 0.27 62.1 62.1 0.83 1.16 0.09 0.06 0.09 0.07
North W-Mo 915,000 0.26 54.3 49.8 0.58 1.14 0.25 0.12 0.12 0.10
Total
Inferred 7,603,000 0.22 74.6 72.3 0.99 0.80 0.08 0.05 0.09 0.05
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43-101 compliant mineral resource estimate are as follows:
For the purposes of this review, a total of 97 high grade Sn-In-Zn blocks of
mineralization from the surface to 250 metres depth were identified from within
the NZ indicated and inferred resources and compiled on sections and
subsequently modelled into GEMCOM solid models. The total undiluted and diluted
estimates of the blocks are presented in the following chart.
----------------------------------------------------------------------------
Total All Tonnes % Sn g/t In % Zn % Cu % Pb % As % Bi % WO3 % Mo
Blocks
----------------------------------------------------------------------------
Undiluted 2,894,579 0.76 191 1.90 0.23 0.04 1.49 0.07 0.10 BD
10% Dilution
Material 289,458 0.17 96 0.95 0.12 0.02 0.74 0.04 0.05 BD
Diluted 3,184,037 0.71 183 1.82 0.22 0.04 1.42 0.07 0.09 BD
85% Mining
Extraction 2,706,432 0.71 183 1.82 0.22 0.04 1.42 0.07 0.09 BD
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BD - below detection.
Fire Tower Zone
Mount Pleasant's tungsten/molybdenum sector of the Property, called the Fire
Tower Zone ("FTZ"), was positively identified as a viable production opportunity
in an Aker Solutions 2008 scoping study. Capital expenditures for that study
depended entirely on new equipment purchases rather than the new/used mix which
is proposed for the NZ. The scoping study of the FTZ is summarized in an NI
43-101 compliant Technical Report, entitled "A Technical Review of the Mount
Pleasant Property, Including an updated Mineral Resource Estimate on the Fire
Tower Zone, Southwestern New Brunswick for ADEX Mining Inc." dated December 1,
2008 and completed by Paul Dunbar, M.Sc., P.Geo. Senior Associate Geologist of
WGM, Dorota A. El-Rassi, M.Sc., P.Eng., Geological Engineer of SRK Consulting
and John S. Rogers, P.Eng., of Aker Metals, a division of Aker Solutions Canada
Inc., which is available on SEDAR at www.sedar.com.
"The Fire Tower Zone scoping study plus North Zone PA confirm the potential for
a unique multi-metal production opportunity for Adex," Mr. Farr continued,
"which includes simultaneous commercial production of tungsten and molybdenum
products from the Fire Tower Zone, and tin, indium and zinc products from the
North Zone."
The PA and the economic analyses contained therein are preliminary in nature and
contain inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them that would enable
them to be categorized as mineral reserves and there is no certainty that the
results of the PA will be realized with more detailed work. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
Qualified Persons
Trevor Boyd, P.Geo. the Company's geological consultant, and a qualified person
as defined by NI 43-101, supervised the preparation of the technical information
regarding the mineral resource estimate at the Property contained in this press
release in compliance with NI 43-101. Andrew Hara, P. Eng., of Hara Mining
Enterprises Inc., a consultant to Adex and an independent qualified person as
defined by NI 43-101, supervised the preparation of the technical information
regarding mining contained in this press release in compliance with NI 43-101.
Dean Thibault, P. Eng., Senior Process Chemical Engineer of Thibault &
Associates Inc., a consultant to Adex and an independent qualified person as
defined by NI 43-101, supervised the preparation of the technical information
regarding process design and all associated engineering work leading to mineral
and metal production contained in this press release in compliance with NI
43-101.
ABOUT ADEX
Adex Mining Inc. is a Canadian junior mining company with an experienced
management team. The Company is focused on developing its flagship Mount
Pleasant Mine property, a multi-mineral project that is host to promising
tungsten-molybdenum and tin-indium-zinc-copper mineralization. Located in
Charlotte County, New Brunswick, the Mount Pleasant Mine property is situated
approximately 80 kilometres south of Fredericton, the provincial capital, and is
65 kilometres from the United States border. The common shares of Adex trade on
the TSX Venture Exchange under the stock symbol "ADE." Technical and business
information regarding Adex's Mount Pleasant property is available on SEDAR at
www.sedar.com and the Company's website at www.adexmining.com.
No securities commission or regulatory authority has approved or disapproved the
contents of this press release.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking"
statements which involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements of Adex, its
subsidiary or the industry in which they operate to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. When used in this press release, the words
"estimate", "believe", "anticipate", "intend", "expect", "plan", "may",
"should", "will", the negative thereof or other variations thereon or comparable
terminology are intended to identify forward-looking statements. Such statements
reflect the current expectations of the management of Adex with respect to
future events based on currently available information and are subject to risks
and uncertainties that could cause actual results, performance or achievements
to differ materially from those expressed or implied by those forward-looking
statements. These risks and uncertainties are detailed from time to time,
including, without limitation, under the heading "Risk Factors", in reports
filed by Adex with the Alberta, British Columbia and Ontario Securities
Commissions which are available at www.sedar.com and to which readers of this
press release are referred for additional information concerning Adex, its
prospects and the risks and uncertainties relating to Adex and its prospects.
New risk factors may arise from time to time and it is not possible for
management to predict all of those risk factors or the extent to which any
factor or combination of factors may cause actual results, performance and
achievements of Adex to be materially different from those contained in
forward-looking statements. Although the forward-looking statements contained in
this press release are based upon what management believes to be reasonable
assumptions, Adex cannot assure investors that actual results will be consistent
with these forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a
prediction of actual results.
The forward-looking information contained in this press release is current only
as of the date of the press release. Adex does not undertake or assume any
obligation to release publicly any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events, except as required by law.
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