NGEx Resources Inc.
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Chile's Biggest New Copper-Gold Camp

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NGEx Announces Initial Mineral Resource Estimate and Metallurgical Testwork Results for Los Helados Project, Chile and Conference Call

Oct 15, 2012 - 09:04 ET


VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 15, 2012) - NGEx Resources Inc. (TSX:NGQ) ("NGEx" or the "Company") is pleased to announce both the initial Mineral Resource estimate and positive results from the initial metallurgical testwork program for its Los Helados copper-gold porphyry deposit located in Region III of Chile.

The Mineral Resource was estimated by Behre Dolbear International Ltd. at a base case 0.30% copper equivalent* cutoff as follows:

  • 1,114 million tonnes at a grade of 0.42% copper and 0.19 g/t gold for a copper equivalent grade of 0.55% (10.34 billion pounds of copper and 6.35 ounces of gold) in the Indicated Resource category; and,
  • 1,015 million tonnes at a grade of 0.38% copper and 0.14 g/t gold for a copper equivalent grade of 0.47% (8.41 billion pounds of copper and 4.70 ounces of gold) in the Inferred Resource category.

Metallurgical testwork was completed by SGS Lakefield Research in Santiago, Chile. The testwork indicates that the Los Helados mineralization is amenable to standard flotation concentration and two locked-cycle tests achieved copper recoveries of 84.2 and 90.2% and gold recoveries of 56.9 and 60.3%, with test concentrate grades of 22.9% copper and 12.2 g/t gold, and 28.5% copper and 15.5 g/t gold. The concentrate samples produced by this work were very clean, with all deleterious elements well below penalty levels and also had silver grades that would provide payment for part of the silver content under current general smelter contract terms.

Wojtek Wodzicki, President and CEO of the Company, commented "The initial resource estimate and encouraging metallurgical results confirm the tremendous potential of the Los Helados Deposit. The resource adds to the already significant copper-gold resource base on the Company's land package which includes the nearby Josemaria deposit. The results for the first stage of metallurgical testwork indicate that production of commercial concentrates from Los Helados mineralization using standard flotation concentration methods should be straightforward. We are very pleased with progress at Los Helados which has gone from a grass roots project to the resource stage in a little more than four years. The deposit is open in several directions, we believe that there is excellent potential to add to the current resource and we plan to test this potential over the next six months with an aggressive exploration drilling program.

We are very excited about today's results and in particular what they mean in terms of the bigger picture which includes the Company's Josemaria and Filo del Sol projects. Taken together we feel that these projects offer our investors exposure to an emerging deposit cluster that continues to deliver outstanding exploration results and has the potential to rank among the most significant in this prolific copper-gold belt. Access and infrastructure near Los Helados is excellent, in part due to the development of the nearby Caserones copper project by Pan Pacific Copper who are the Company's 40% partner in Los Helados and we believe that this enhances the eventual development potential of Los Helados."

The Company views the Mineral Resource estimate and the metallurgical testwork results to be significant enough to warrant the preparation of a Preliminary Economic Assessment in order to begin to design a conceptual development plan for the Los Helados project. This study is scheduled to get underway early in 2013.

CONFERENCE CALL

The Company will hold a conference call today, October 15, 2012 at 12:30 p.m. Toronto time to discuss the results.

Please call in 10 to 15 minutes before the conference starts and stay on the line (an operator will be available to assist you).

Call-in number for the conference call (North America): +1-416-340-2216
Call-in number for the conference call (North America Toll Free): +1-866-226-1792
Call-in number for the conference call (Europe Toll Free): +00-800-9559-6849
 
A replay of the telephone conference will be available approximately one hour after the completion of the conference until November 15, 2012.
 
Replay number in North America: +1-905-694-9451
North America (Toll Free) is: +1-800-408-3053
Europe (Toll Free) is: +00-800-3366-3052
The pass code for the replay is: 8387784

RESOURCE ESTIMATE

The Mineral Resource estimate as of the effective date of October 15, 2012 is shown in the tables below:

LOS HELADOS INDICATED MINERAL RESOURCE  
    Resource Grade   Contained Metal  
Cutoff (CuEq*) Million Tonnes Cu (% ) Au (g/t ) Ag (g/t ) CuEq* (% ) Cu (billion lbs ) Au (million oz ) Ag (million oz )
0.50 571 0.53   0.24   1.77   0.69   6.66   4.37   32.44  
0.45 690 0.50   0.22   1.69   0.65   7.62   4.95   37.57  
0.40 833 0.47   0.21   1.61   0.61   8.68   5.58   43.07  
0.35 973 0.45   0.20   1.53   0.58   9.56   6.14   48.00  
0.30 1,114 0.42   0.19   1.46   0.55   10.34   6.65   52.40  
0.25 1,230 0.40   0.18   1.40   0.52   10.87   7.05   55.53  
0.20 1,320 0.38   0.17   1.36   0.50   11.18   7.33   57.71  
                               
LOS HELADOS INFERRED MINERAL RESOURCE  
    Resource Grade   Contained Metal  
Cutoff (CuEq*) Million Tonnes Cu (% ) Au (g/t ) Ag (g/t ) CuEq* (% ) Cu (billion lbs ) Au (million oz ) Ag (million oz )
0.50 319 0.51   0.21   1.72   0.66   3.61   2.18   17.72  
0.45 469 0.47   0.18   1.60   0.60   4.88   2.78   24.18  
0.40 624 0.44   0.17   1.50   0.56   6.04   3.38   30.17  
0.35 793 0.41   0.16   1.41   0.52   7.15   4.00   35.95  
0.30 1,015 0.38   0.14   1.30   0.47   8.41   4.70   42.45  
0.25 1,222 0.35   0.13   1.21   0.44   9.41   5.25   47.73  
0.20 1,398 0.33   0.13   1.14   0.41   10.09   5.68   51.43  

* CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. Silver is not included in the CuEq. The formula used is CuEq% = Cu% + 0.6806*Au (g/t). Small discrepancies may exist due to rounding errors.

This resource remains open to expansion laterally and at depth and a drill program designed to expand the resource and begin to convert the Inferred resource to the Indicated category is scheduled to begin in late October. Approximately 28,000 meters of drilling is planned for Los Helados. Drilling at the Company's nearby Josemaria and Filo del Sol copper-gold projects will commence late in the fourth quarter.

The Mineral Resource estimate for Los Helados was prepared by Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. in accordance with NI 43-101. Mr. Zandonai is the Qualified Person for the estimate and is independent of the Company. A Technical Report describing the details of the resource estimate will be available under the Company's profile on SEDAR within 45 days.

The Los Helados Mineral Resource was estimated using geological and assay data from 43 diamond drill holes representing 35,873 metres of drilling and 5 reverse circulation holes representing 1,366 metres of drilling. Drill hole assays were composited to 2 m intervals for grade interpolation. Specific gravity data was measured for all samples in 24 of the diamond drill holes (22,048m).

Domains were created based on mineral zones, alteration and lithology. Mineral zones were defined by the relative abundance of chalcopyrite and pyrite and four main zones were modeled: pyrite only, pyrite>chalcopyrite; pyrite<chalcopyrite and chalcopyrite only. The Los Helados deposit consists entirely of primary (hypogene) mineralization and does not have either a leached cap or an oxide mineral zone. The mineral zone domains were used to control the interpolation as they exhibited the most control on copper and gold grades.

Blocks were estimated by ordinary kriging in a single pass. Grades were estimated in the 40m × 40m x 20m block model using ordinary kriging for Au g/t, Ag g/t and Cu%. To assign a grade to a block, composites were sourced within a search ellipsoid of dimensions similar to the anisotropies from the ranges of the directional variograms calculated for each domain.

The minimum number of composites used to estimate a block was set at 2 and the maximum was 20, with a block discretization of 2x2x2. Only blocks that remained unestimated after the first pass were estimated with a search equivalent to one and a half the initial search in all directions, maintaining unchanged the remaining parameters.

As the Los Helados project is an early-stage project, no engineering or infrastructure data or studies are available to evaluate economic development parameters for the Mineral Resource. The base-case cutoff grade of 0.3% CuEq was chosen based on comparison with other similar deposits. The Los Helados project is located in an area of Chile which currently has several copper-gold porphyry deposits in similar geologic and geographic settings which are currently in advanced exploration or development. These other projects provide useful benchmarks and have been used to select the base-case cutoff grade for Los Helados, and to provide reasonable prospects for economic extraction.

It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and does not have demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.

METALLURGICAL TESTWORK

The results of the two locked cycle tests are shown in the table below:

Test Cu Head Grade (% ) Cu Recovery (% ) Cu Concentrate Grade (% ) Au Head Grade (gpt ) Au Recovery (% ) Au Concentrate Grade (gpt )
LCT 1 0.39   90.2   22.9   0.32   60.3   12.2  
LCT 2 0.36   84.2   28.5   0.29   56.9   15.5  

Flotation testwork was carried out by SGS Lakefield Research at its facilities in Santiago, Chile on a composite sample constructed from 6 individual samples of drill core representing 600 meters of mineralization (totaling 1,200kg) from three different depths in two drill holes. SGS Lakefield completed a comprehensive initial testwork program consisting of sample preparation, grind time estimation, grinding testwork, rougher flotation kinetics, cleaner flotation tests and locked cycle flotation tests.

Grinding testwork was done on three composite samples, each representing a different depth interval from three holes. Testing included Bond Ball Work Index (BWI), Bond Abrasion Index and Bond Rod Work Index (RWI) and results are shown below:

Sample BWI (kWh/mt ) Abrasion Index   RWI (kWh/mt )
MC-1 14.8   0.182   Na  
MC-2 15.5   0.209   17.5  
MC-3 15.8   0.210   17.2  

Rougher and cleaner flotation tests were done in order to establish the optimum grind size, pH and reagent use to produce a commercial grade concentrate. All flotation tests were done on a composite sample comprised of MC-2 and MC-3.

Locked cycle flotation tests were then carried out using the following parameters:

- Grind Size (p80) 160 microns
- Regrind Size (p80) 35 microns
- Rougher pH 9.5
- Cleaner pH 12.2
- Collector 20 g/t AP 3477
- Flotation Time Rougher 8 minutes
- Flotation Times cleaner 5,5,4,3 minutes (1st,Scav,2nd and 3rd)

Results from the locked cycle tests are shown in the table above. As expected, reducing the flotation times in the cleaner stages resulted in higher concentrate grade at lower recovery. Additional testwork will be performed on a much larger suite of samples to obtain more extensive metallurgical response data across the mineralization. This work will focus on further optimizing the balance between recovery and concentrate grade and continuing to refine the optimum flotation conditions for the Los Helados mineralization.

Los Helados is one of several large copper-gold systems including the Company's Josemaria and Filo del Sol projects, located on a contiguous land package that the Company holds in Chile's Region III and adjacent San Juan Province, Argentina. Los Helados and Filo del Sol are part of a joint venture in which the Company holds 60% and Pan Pacific Copper Corporation holds 40%. Josemaria is part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation (JOGMEC) owns 40%.

On behalf of the board

Wojtek Wodzicki, President and CEO

Qualified Person and Assay Methods

Mr. Bob Carmichael, B.A.Sc, P.Eng., is the Qualified Person as defined by National Instrument 43-101. Mr. Carmichael is Vice President, Exploration for the Company and has reviewed and approved the technical information contained in this news release. The Quality Control/Quality Assurance (QA/QC) program on Los Helados Project is under the management of Diego Charchaflie MSc., P.Geo (BC), a Qualified Person pursuant to NI 43-101. Mr. Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. is the Qualified Person who carried out and is responsible for the Mineral Resource estimate disclosed herein. Mr. Zandonai has reviewed and approved the technical information in this news release which pertains to that estimate.

Cautionary Note Regarding Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of NGEx Resources Inc. Forward-looking statements include, but are not limited to, statements with respect to the estimation of commodity prices, mineral reserves and resources, the realization of mineral reserve estimates, capital expenditures, costs and timing of the development of new deposits, the success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining activities, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotations thereof. All such forward-looking statements are based on the opinions and estimates of the relevant management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond the Company's ability to control or predict.

Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks and uncertainties relating to, among other things, changes in commodity prices, currency fluctuation, financing, unanticipated reserve and resource grades, infrastructure, results of exploration activities, cost overruns, availability of materials and equipment, timeliness of government approvals, taxation, political risk and related economic risk and unanticipated environmental impact on operations as well as other risks and uncertainties described under "Risks Factors" in the Company's Annual Information Form available under the Company's profile at www.sedar.com and the Company's website.

Although the Company has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward-looking statements contained in this document are qualified by these cautionary statements. Readers should not place undue reliance on forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and other to get a better understanding of the Company's operating environment. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.

 

FOR FURTHER INFORMATION PLEASE CONTACT:

NGEx Resources Inc.
Sophia Shane
Corporate Development
(604) 689-7842
 


 

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