Alexis looks past Lac Herbin study

If David Rigg, president and CEO of Alexis Minerals (AMC-V) could see into the future, the Lac Herbin mine would be producing gold for much longer than the 18 months a feasibility study released today projected.

Alexis shares were down 12% today, or 14, to $1.03 on a trading volume of 2.2 million shares.

According to the study, Lac Herbin, a past-producing gold mine in Quebecs Val dOr camp, is economical and could to produce up to 40,000 oz. gold per year with an estimated cash cost of US$389 per oz. and an internal rate of return of 48%.

If I could look in to my crystal ball over the long-term of this deposit Ill be looking to prove over a million oz., Rigg said in a conference call today.

A 4-year production model was also done to demonstrate the upside potential from ongoing delineation of inferred resources. Under the 4-year model, the annual production would stay at 40,000 oz. per year at a cash cost of US$394 per oz. with a net cash flow of $20 million and an IRR of 78%.

The numbers used in the study did not include a series of impressive drill results from the 2007 drill program that doubled the companys share price earlier this year Only figures up to the end of 2006 were used.

Rigg says the company wanted to get some updated information out to the market so it could start production while expanding resources.

Alexis needs $6.5 million for capital costs and would generate a net cash flow of $5.8 million with a payback period of 15 months.

The company plans to start production next January at a rate of 640 tonnes per day 5 days a week at the 1,400 tonne-per day Aurbel mill.

Current measured resources are 34,600 tonnes grading 8.02 grams gold per tonne and indicated are 460,000 tonnes grading 7.81 grams per tonne for a total of 125,000 oz. gold. The inferred resource is 678,000 tonnes grading 7.69 grams gold per tonne totaling 167,000 oz. gold.

Alexis will mine using a main ramp to access the levels and local smaller secondary ram pos to access sub-levels.

The company has three diamond drills in action with plans to do another bulk sample by the end of the year to gain knowledge of the deposit. So far, it shows similarities to other vein type deposits in the Val dOr area. It contains multiple mineralized zones showing strong vertical and horizontal extensions.

Rigg describes the Lac Herbin deposit as not 43-101-able because building resources has been a challenge due to the complexity of the deposit. The feasibility study points out that low resources and a long mine life has been a standard for many mines in the area.