Tournigan Gold improves economics at Kremnica

Vancouver — Tournigan Gold (TVC-V) has tabled an independent scoping study that focused exclusively on the Sturec zone at the Kremnica gold deposit in the Slovak Republic.

Kremnica is located 190 km northeast of Vienna, at the geographic centre of Europe. Tournigan owns 100% of the property through its Slovak subsidiary, Kremnica Gold. The region hosts a series of deposits have been mined intermittently over the past 600 years, ending in 1992. They have collectively yielded 1.5 million ounces of gold and 9 million ounces of silver.

The currently known gold-silver occurrences at Kremnica represent Tertiary-aged low sulphidation quartz vein stockwork deposits that are hosted hydrothermally altered andesite and rhyolite volcanics. The principal vein system has a strike length of 7 km. The veins are typically banded and brecciated and gold mineralization is finely disseminated and occurs freely as well as with sulphides.

Numerous targets have been identified in addition to the Sturec deposit, including the Vratislav and Wolf prospects. They lie 1 and 2 km north of Sturec, respectively, along the continuation of the Kremnica vein structure. Previous work performed by Argosy Mining defined small resources at both locations. These have yet to be upgraded to NI 43-101 regulation standards.

The recently updated scoping study was performed by Beacon Hill Consultants. The same company completed the initial study in 1998. According to the new date average annual production from Sturec is pegged at 89,324 ounces of gold equivalent at a 4,500 tonne-per-day production rate over a 10 year mine life. Operating costs are estimated to be US$189 per ounce. The after-tax, Net Present Value of the deposit, using a 5% discount rate, was calculated to be $62 million. The study also indicates operating costs of $11 per tonne of ore, or US$194 per ounce of gold (including a silver credit).

Indicated and inferred resources were sourced from an independent technical report that was authored by Bruce Alexander Smith and Garth Kirkham. According to that report, the indicated resource at Sturec weighs in at 9.8 million tonnes averaging 1.49 grams gold and 11.46 grams silver using a 0.5 gram gold cut-off grade. When a 1.0 gram cut-off grade is utilized, the resource drops to 5.6 million tonnes averaging 2.11 grams gold and 15.43 grams silver. The inferred portion of the resource, using a 0.5 gram gold per tonne cut-off grade, works out to 16.1 million tonnes averaging 1.35 grams gold and 11.32 grams silver. When a 1.0 gram cut-off grade is used the inferred resource drops top 8.3 million tonnes averaging 2.01 grams gold and 16.06 grams silver. These numbers were based on metal prices of US$385 per ounce gold and US$5.50 per ounce silver.

The proposed plant facility is situated within the existing Kremnica Mining License, and is wholly-owned by Tournigan. The estimated capital cost to bring the mine into production is US$48.9 million and includes contingencies of 10 to 30%. Capital expenditures can be paid back in 2.6 years on an after-tax basis. The base-case Internal Rate of Return is slated at 26%. Beacon Hill utilized metal recovery estimates of 92% for gold and 72% for silver, based on two metallurgical studies conducted by Hazen Research in 1997 and 1998.

Tournigan intends to implement Beacon Hill’s recommended work program to further develop the project. This will include 5,600 metres of drilling in 2004. This program will further upgrade resources at Sturec as well as focus on expanding the historical resources at the Wolf and Vratislav zones that lie on-strike to the north. In addition other large-scale exploration targets will be tested at Kremnica South.

Tournigan also intends to initiate environmental permitting, metallurgy, socio-economic and tailings studies.