The company said that while it has not yet received official notification of the ruling, it was posted on the courthouse bulletin board, which Metallica says is the standard method of announcing verdicts prior to publishing complete rulings.
Metallica says it expects to receive an official notification from the court within the next two weeks, at which time it will issue a more detailed discussion of any conditions, stipulations or provisions included in the ruling.
The latest verdict overturns an August 2004 ruling in which another Mexican court nullified the project’s mining permit issued by the Mexico’s environmental agency.
In June, the Federal Mining Bureau issued Metallica a temporary occupancy agreement that the company says secures land tenure, thereby allowing it access to its mineral rights for the life of the mine.
Meanwhile, the company continues to negotiate with various state and federal agencies to secure a blasting permit for 2005; the permit is needed before construction can begin. The company originally launched a 9-month, US$28.2-million construction campaign in February 2004. It was suspended in June 2004 owing to various permitting and legal issues.
“We are still waiting to review the court’s ruling, but based on the information that has been publicly posted this is an important step forward for our operation at Cerro San Pedro,” says Metallica CEO Richard Hall.
Earlier this year, Metallica updated the project’s proven and probable reserves to 63 million tonnes grading 0.58 gram gold and 23.9 grams silver per tonne, for 1.17 million contained ounces gold and 48.4 million contained ounces silver. The reserves are included in a measured and indicated resource totalling 116.2 million tonnes running 0.54 gram gold and 20.3 grams silver. The new estimates are based on a more current gold price of US$375 per oz. and US$5.77 per oz. of silver.
The proposed heap-leach mine is expected to produce an average of 90,500 oz. gold and 2.1 million oz. silver per year over its estimated life of 8.3 years. Cash operating costs, net of silver credits, are pegged at US$177 per oz.
Meanwhile, in north-central Chile,
The latest payment follows US$11.3 million worth of payments, private placement subscriptions, and work expenditures made by Falconbridge (and its predecessor
Looking ahead, the major must now complete a feasibility study by September 2007, and at the junior’s request cover 70% of Metallica’s share of any future mine development costs.
In 2002, Noranda estimated that La Fortuna contained an inferred resource of 465 million tonnes grading 0.61% copper and 0.5 gram gold per tonne at a cutoff of 0.4% copper. Included in that resource were 103 million tonnes of supergene mineralization grading 0.71% copper and 0.35 gram gold.
In May, drilling on La Fortuna encountered a zone of secondary enrichment followed by primary mineralization, including a 68-metre interval grading 2.05% copper and 0.94 gram gold per tonne followed by 302 metres running 0.78% copper and 1.23 grams gold (T.N.M., May 23-29/05).
The holes were drilled to an average depth of 410 metres. Hole no. 39, the deepest so far at La Fortuna, sank to around 970 metres and extended known mineralization some 325 metres below the inferred resource limit encountering average grades of 0.55% copper and 0.46 gram gold.
So far, the upper 400 metres of the La Fortuna resource has been tested on 100-metre centres, with the lower 300 metres drilled on 200-metre centres. The La Fortuna resource is contained in a 700-metre-by-1-km area centered on a mineralized porphyry stock.
An updated resource estimate incorporating the latest drill results is due in the third quarter.
The project is also home to the El Morro deposit, about 5 km to the northwest. Inferred resources there are pegged at 45 million tonnes grading 0.5% copper and 0.18 gram gold per tonne.
The El Morro deposit differs from the La Fortuna deposit in that the copper-gold mineralization is hosted by volcaniclastic and sedimentary rocks, whereas La Fortuna occurs within intrusive rocks.
The El Morro deposit remains open to the west, northwest and northeast.
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