October 1st, 2010
Vancouver, British Columbia
Dome Mountain Prefeasibility Study Complete
Metal Mountain Resources Inc. and Gavin Mines Inc. (the "Companies") are pleased to announce the results of a positive Prefeasibility Study ("PFS") on the Dome Mountain Gold - Silver Project, 38 kilometres east of Smithers, in northwest British Columbia. The PFS was completed by independent consultants Christine Linden and Steve Cutler of Linden Mining & Consulting, 0863732 BC Ltd. (Linden). The results of the PFS are favorable and indicate that the project development model as presently conceived is technically feasible.
To review the PFS please go to:
Summary of Financial Analysis
The PFS covers all aspects of project development, including underground mining, toll processing by cyanidation, transportation of ore, and all related infrastructure. Linden developed a financial model from capital quotations, estimates from suppliers, manufacturers, contractors and experience based on similar operations in British Columbia. The analysis shows a strongly positive internal rate of return ("IRR") of 208% and a positive net present value ("NPV") of $13.67 million at a discount rate of 5%. The net cash flow is based on a 2 year operating schedule. The CAD$/US$ exchange rate was assumed to be CAD$1.00 = US$0.956. The analysis used a gold price of US $1,054 per troy ounce and a silver price of US $15.72 per troy ounce.
Total project construction capital costs inclusive of a 15% contingency were estimated at CAD $4.3 million. Average operating costs over the 2 year life of the project are estimated to be CAD $260.38 per tonne of ore mined including capital and a 2% NSR. The 2 year mine life is based on a National Instrument 43-101 compliant Probable Mineral Reserve estimate of 135,131 tonnes at an average recovered grade of 11.2 grams per tonne gold using a cut-off grade of 7.9 grams per tonne gold. Cyanidation recoveries used in the analysis were 95% for gold and 30% for silver based on metallurgical test work by PRA Metallurgical Division (PRA) of Inspectorate America Corp. Payment by the toll mill for 95% of recovered gold and silver was assumed.
Christine Linden, P.Eng. and Steve Cutler, PG of Linden Mining & Consulting are Independent Qualified Persons as defined by National Instrument 43-101 and have verified that the technical information in the above section of the news release accurately reflects the technical information in the PFS.
Project Development Model
The project model as analyzed in the PFS consists of underground trackless mining by cut & fill and transportation of the ore by highway truck to a processing facility approximately 500 km from Dome Mountain. The mine will operate at a average capacity of 205 tonnes of ore per day on the basis of two - 10 hour shifts per day on a seven day week. The ore will be crushed and sampled on surface prior to shipment. The workforce will be based in Smithers and will be transported daily to the mine.
Mine effluent water will be piped to a sediment control pond to remove suspended solids and then recycled to the mine. Excess water will be piped to a High Density Sludge (HDS) plant where the effluent will be treated to BC Water Quality Guidelines for Aquatic Life before being discharged to Fedral Creek.
The project was issued a Mines Act permit approving the mine plan and reclamation program from the Ministry of Energy Mines and Petroleum Resources on August 26th, 2010 and an Environmental Management Act permit approving the discharge of treated mine effluent from the Ministry of Environment on August 25, 2010.
In-fill diamond drilling has been completed to define the western extent of the Boulder Vein for mine planning purposes. Eleven HQ holes totalling 1306 metres were drilled. Assay results are pending.
Construction of the sediment control pond and associated water control structures is approximately 60% complete. The work is being conducted by Double B Gravel & Excavating Ltd. and B&A Rentals Ltd. both of Smithers, BC. Engineering design for the cut & fill earthwork structure is by Golder Associates of Vancouver.
The water treatment plant has been designed by SGS-CEMI of Vancouver BC and the building has been ordered from Nucor Steel Buildings of Brigham City, UT. The building is scheduled for delivery on October 10, 2010.
First Nations Participation
The Companies wish to acknowledge the cooperation and input from the Lake Babine Nation ("the Nation") toward the successful permitting of the project. The Nation agreed that the companies' commitment to training, jobs, contracting opportunities, and engagement on the future plans and development of the project adequately addressed their concerns regarding permitting. The Companies look forward to working with the Nation during the development, operation and closure of the project.
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements as set out in National Instrument 43-101. Daryl Hanson, P.Eng. is contracted as a consultant to the company and acted as the company's Qualified Person, as defined by National Instrument 43-101 and has reviewed and approved the full contents of this news release.
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VP of Communications
FORWARD LOOKING STATEMENTS:
The information contained in this website is provided solely for the reader's general knowledge. The information is not intended to be a comprehensive review of all matters and developments concerning Metal Mountain Resources Inc. All information is offered on a "best intentions" basis. No securities commission or other regulatory authority in Canada or any other country or jurisdiction has in any way passed upon this information and no representation or warranty is made by the Company to that effect.
This website includes "forward looking statements". Other than statements of historical fact, all statements included in this document, including without limitation, statements regarding exploration results, future plans and objectives of the Company may be forward looking statements. These statements may reflect management's current beliefs and are based on information currently available to management. Forward looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements, including, but not limited to, general economic conditions, changes arising as drilling results unfold, changes in regulatory environments affecting the Company and the availability and terms of subsequent financings. Although the forward looking statements included in this document are based upon what management believes to be reasonable assumptions, there can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.