NGEx Resources Inc.
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NGEx Announces Significant Increase in Resource at Josemaria

Oct 1, 2013 - 08:30 ET
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VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 1, 2013) - NGEx Resources Inc. (TSX:NGQ) ("NGEx" or the "Company") is pleased to announce an updated Mineral Resource estimate for its Josemaria copper-gold porphyry deposit located in San Juan province, Argentina.

Following a drilling program totaling 8,242 meters (18 holes) completed earlier this year an updated Mineral Resource was estimated by Behre Dolbear International Ltd. as follows:

Sulphide Resource (0.3% CuEq* cutoff):

  • 789 million tonnes at a grade of 0.35% copper and 0.24 g/t gold for a copper equivalent grade of 0.53% (6.1 billion pounds of copper and 6.1 million ounces of gold) in the Indicated Resource category; and,
  • 315 million tonnes at a grade of 0.28% copper and 0.17 g/t gold for a copper equivalent grade of 0.41% (1.9 billion pounds of copper and 1.7 million ounces of gold) in the Inferred Resource category.

Plus: Oxide Resource (0.2 g/t Au cutoff):

  • 45 million tonnes at a grade of 0.14% copper and 0.32 g/t gold (463 thousand ounces of gold) in the Indicated Resource category; and,

The drilling completed during 2013 has resulted in a significant increase to the resource base at Josemaria as compared to the January 2013 Mineral Resource update.

  • Copper contained in Indicated Resources has increased by 17% to 6.1 billion pounds (January: 5.2 billion pounds)
  • Gold contained in Indicated Resources has increased by 18% to 6.6 million ounces (January: 5.6 million ounces)
  • Indicated Resources have increased by 20% to 789 million tonnes (January: 656 million tonnes).

The Company has defined a program for the 2013 / 2014 drill season to explore for additional resources at Josemaria and to define an initial resource at the Filo del Sol deposit. This program is expected to commence later this year.

Wojtek Wodzicki, President and CEO of the Company, commented, "The NGEx team are very pleased with the results of this year's program at Josemaria. We have more than doubled the resource over the last two years and the deposit remains open to the northwest. Josemaria has a robust high grade core of more than 450 million tonnes at a copper equivalent grade of 0.63%, which is very close to surface. With the Josemaria mineralization outcropping along a ridge, the deposit is an ideal configuration for open pit mining. In addition, the upper part of the deposit is oxide mineralization which preliminary metallurgical test work suggests is amenable to heap leaching of gold.

Together, Josemaria and its sister Los Helados deposit located 12 km to the northwest host a combined Indicated resource at a 0.3% CuEq cutoff of 21.4 billion pounds of copper, 15.5 million ounces of gold, and 107 million ounces of silver with additional mineralization in the Inferred category.

We believe that there is excellent potential to continue to add to our resource base both at Josemaria and elsewhere in the district through additional exploration. We are eager to start work this season to test possible extensions of the high grade zone at Josemaria and to define an initial resource at the nearby Filo del Sol deposit."

RESOURCE ESTIMATE

The Mineral Resource estimate as of the effective date of September 27, 2013 is shown in the tables below:

JOSEMARIA INDICATED MINERAL RESOURCE (SULPHIDE)
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)
0.50 355 0.44 0.33 1.27 0.68 3.44 3.77 14.50
0.45 456 0.41 0.30 1.22 0.63 4.12 4.40 17.89
0.40 571 0.39 0.28 1.17 0.59 4.91 5.14 21.48
0.35 679 0.37 0.26 1.12 0.56 5.54 5.68 24.45
0.30 789 0.35 0.24 1.08 0.53 6.09 6.09 27.40
0.25 894 0.33 0.23 1.04 0.50 6.50 6.61 29.89
0.20 986 0.31 0.22 1.01 0.47 6.74 6.97 32.02
JOSEMARIA INFERRED MINERAL RESOURCE (SULPHIDE)
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 46 0.37 0.25 1.16 0.55 0.38 0.37 1.72
0.45 87 0.35 0.24 1.07 0.52 0.67 0.67 2.99
0.40 151 0.32 0.21 1.02 0.48 1.07 1.02 4.95
0.35 229 0.30 0.19 0.96 0.45 1.51 1.40 7.07
0.30 315 0.28 0.17 0.92 0.41 1.94 1.72 9.32
0.25 430 0.26 0.15 0.88 0.38 2.46 2.07 12.17
0.20 554 0.24 0.14 0.82 0.34 2.93 2.49 14.61
JOSEMARIA INDICATED MINERAL RESOURCE (OXIDE)
Resource Grade Contained Metal
Cutoff (Au g/t) Million Tonnes Cu (%) Au (g/t) Ag (g/t) Au (thousand oz) Ag (thousand oz)
0.40 10 0.18 0.47 1.39 150 450
0.35 16 0.17 0.44 1.38 230 710
0.30 23 0.16 0.40 1.34 300 990
0.25 31 0.15 0.37 1.28 370 1,280
0.20 45 0.14 0.32 1.19 460 1,720
0.15 69 0.13 0.27 1.10 600 2,440
0.10 97 0.12 0.23 1.01 720 3,150
JOSEMARIA INFERRED MINERAL RESOURCE (OXIDE)
Resource Grade Contained Metal
Cutoff (Au g/t) Million Tonnes Cu (%) Au (g/t) Ag (g/t) Au (thousand oz) Ag (thousand oz)
0.40 0.4 0.11 0.44 1.15 6 15
0.35 1 0.05 0.39 1.01 13 32
0.30 2 0.04 0.37 0.99 24 64
0.25 3 0.04 0.35 0.98 34 95
0.20 3 0.05 0.33 0.97 32 94
0.15 5 0.05 0.28 0.87 45 140
0.10 11 0.09 0.19 0.79 67 280
  • CuEq - Copper Equivalent is calculated using US$3.00/lb copper, US$ 1,400/oz gold and US$23/oz Ag, with no provision for metallurgical recoveries. The formula used is CuEq% = Cu% + 0.6806*Au (g/t) + 0.011*Ag (g/t);
  • Small discrepancies may exist due to rounding errors;
  • Mineral Resources are reported within a Whittle pit shell based on: 42 degree pit slope; $2.20/tonne mine cost; $7.40/tonne process cost;
  • Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

The Mineral Resource estimate for Josemaria 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 Josemaria Mineral Resource was estimated using geological and assay data from 69 diamond drill holes representing 32,934 metres of drilling and 34 reverse circulation holes representing 13,164 metres of drilling. All drill holes were completed by NGEx and a comprehensive, industry-standard QA/QC program consisting of blanks, standards and duplicates was followed for all holes. Specific gravity data was measured for all samples in 58 of the diamond drill holes.

Geological interpretation was completed by Company geologists on vertical cross sections oriented east-west and spaced 100 metres apart across the deposit. North-south vertical cross sections and plan sections were also used in order to refine the interpretation and to ensure 3 dimensional consistency. Separate interpretations were completed for each of lithology, alteration and mineral zones (defined by the relative abundance of chalcopyrite, pyrite, and bornite). The 2 dimensional interpretations were then used as the basis for a 3 dimensional model which was created using Leapfrog© geological modeling software.

Josemaria is a porphyry deposit, with most of the mineralization occurring within and surrounding an elongated porphyry intrusion which cuts the local rhyolite and tonalite country rock. Analysis of assay data within the geology models indicated that the mineral zone model exhibited the greatest control over the grade distribution and so the mineral zone solids were used as the primary control for the interpolation. A block model was constructed with block dimensions of 25m × 25m x 15m high and grades were interpolated into the blocks by ordinary kriging in a single pass.

Blocks were classified as Indicated or Inferred initially based on a combination of factors including the number of holes used for each block, distance to the nearest composite and kriging efficiency and finally on wireframes constructed to contain areas of primarily Indicated or Inferred blocks. This final step was taken to remove the "spotted dog" effect of having Inferred blocks scattered throughout an area primarily classified as Indicated and vice versa and to provide visual confirmation of the extent and continuity of the classified blocks. Only Indicated and Inferred blocks falling within a Whittle pit shell, with defined technical and economic parameters to demonstrate reasonable prospects for economic extraction, were included in the resource estimate. Of the total classified blocks contained within the block model, 99% of those which meet the criteria to be classified as Indicated fall within the pit shell, and 88% of those which meet the criteria to be classified as Inferred fall within the pit shell.

As the Josemaria project is an early-stage project, the base-case cutoff grades of 0.3% CuEq for sulphide mineralization and 0.2 g/t Au for oxide mineralization were chosen based on comparison with other similar deposits. Josemaria is located in an area of the Andes 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 for establishing the cutoff grade.

The mineral resources are reported in accordance with Canadian Securities Administrators' National Instrument 43-101 and have been estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines. 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.

Josemaria is one of several large copper-gold systems, including the Company's Los Helados 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. These deposits, and other prospective targets, comprise what the company refers to as the NGEx District. Los Helados and Filo del Sol are part of a joint venture in which the Company holds 60% and Pan Pacific Copper Co., Ltd. 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

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 the Josemaria 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 information" within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of NGEx Resources Inc. Forward-looking information includes, but is 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, this forward-looking information 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 information is 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 information is 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 information, 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 information, 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 information contained in this document is qualified by these cautionary statements. Readers should not place undue reliance on forward-looking information.

Forward-looking information is 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. These factors are not, and should not be construed as being, exhaustive. Statements relating to "mineral reserves" or "mineral resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future. The forward-looking information contained in this press release is expressly qualified by this cautionary statement. The Company expressly disclaims any intention or obligation to update or revise any forward-looking information 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
(604) 689-4250 (FAX)
ngexresources@namdo.com
www.ngexresources.com



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