IMZ: Gaby unfeasible at US$650/oz gold - Ecuador
Published: Monday, February 11, 2008 17:36 (GMT -0400)

Arizona-based International Minerals (TSX: IMZ) released the summary of a prefeasibility study on its Gaby gold project in southern Ecuador which concluded that at the base case gold price of US$650/oz none of the four recovery processes studied are financially viable. The whole ore grinding/carbon-in-leach (CIL) process option, which would yield an average life-of-mine recovery rate of just 89%, is the most technically and economically viable processing alternative for project development assuming sustained gold prices of US$850/oz, IMZ said in a statement.

Assuming a 20,000t/d operation, the prefeasibility study detailed a US$432mn investment for initial capital, total average operating cost of US$12.16/t, average cash costs of US$538/oz and total cost including capital of US$738/oz. Mine life was estimated at 14 years.

At US$850/oz gold, the project's pretax internal rate of return (IRR) is 3.6% and pretax cash flow US$141mn, while at US$650/oz gold and US$750/oz gold, pretax IRR and cash flow would be negative.

According to IMZ's evaluation of the prefeasibility study, a plant capacity significantly above 20,000t/d could improve project economics.

IMZ aims to work on an optimization study for Gaby, evaluating significantly higher throughput rates with the goal of enhancing the project economics and ultimately completing a final feasibility study in mid-2009 if warranted.

NI 43-101 RESOURCE ESTIMATE

Combined measured and indicated resources at Gaby have been estimated at 308Mt grading 0.63g/t gold and 0.1% copper, the company reported.

Using a 0.4g/t gold cutoff grade in situ measured and indicated resources total some 6.24Moz gold and 284,000t copper, of which some 3.8Moz gold and 175,000t copper are attributable to IMZ based on its ownership interest in the property, the statement said.

Additional inferred resources are calculated to be 122Mt grading 0.65g/t gold and 0.08% copper containing roughly 2.57Moz gold and 95,400t copper.

IMZ is eying continued drilling at Gaby in order to expand the resource base and upgrade inferred resources.

Gaby consists of two adjacent gold deposits, the main Gaby deposit and the Papa Grande deposit which are laid out across three main mining concessions. IMZ is negotiating a 100% interest in the project.

By Business News Americas staff reporters