Breakwater reserves up 50% at El Toqui (July 02, 2007)

Breakwater Resources’ (BWR-T, BWLRF-O) latest reserve increase for its El Toqui zinc project has given the company the confidence to initiate a prefeasibility study for a 1-million-tonne-per-year mill.

The current mill runs at 1,500 tonnes per day.

Breakwater will start the prefeasibility study right away with hopes of completing it by early 2008.

The property, located 1,350 km south of Santiago, Chile, was discovered in 1970, and includes the Dona Rosa zinc-gold mine, the San Antonio and Mallin-Monica zinc-lead mines, the Estatuas mine and the Concordia deposit.

The company produced 70 million lbs. of zinc-in-concentrate from El Toqui last year.

Breakwater has increased proven and probable reserves by 50%, while the contained zinc reserves have risen 34% since the December 2006 estimate released in February. Reserves as of March were 4.3 million tonnes grading 7.3% zinc and 1.1 grams gold per tonne.

Measured and indicated resources, which include proven and probable reserves, have risen by 37% and the contained zinc resource is up 23%. The combined resource in March was 4.9 million tonnes grading 8% zinc and 1.2 grams gold per tonne.

Breakwater hopes to build a resource of 11 million tonnes by the end of the year.

The company has budgeted $27 million for exploration this year, including $10.7 million at El Toqui.

Breakwater shares were up 4% or 11 at $2.84 on the news on more than 7 million shares traded.