Aquiline Resources (AQI-T) has released an updated resource estimate for its huge Navidad silver-lead project, 335 km west of Puerto Madryn in Chubut province, Argentina. The estimate expands the silver resource, while the lead resource has not changed much.
Measured and indicated resources (of which the vast majority are in the indicated category) are 155 million tonnes grading 127 grams silver per tonne and 0.85% lead, equivalent to 632 million oz. silver and 2.9 billion lbs. lead. Inferred resources stand at 46 million tonnes of 81 grams silver per tonne and 0.57% lead, for 119 million oz. silver and 580 million lbs. lead. The resources were calculated at a cutoff grade of 50 grams silver equivalent (silver plus lead) per tonne.
(The previous resource estimate, released in 2007, had measured and indicated resources of 453 million oz. silver and 3 billion lbs. lead, while inferred resources were 153 million oz. silver and 546 million lbs. lead.)
Navidad consists of eight deposits, of which six comprise the 5-6 km-long Navidad trend: Calcite Northwest, Calcite Hill, Navidad Hill, Connector Zone, Galena Hill and Barite Hill. A seventh deposit, Valle Esperanza, is a new discovery which borders Galena Hill. The eighth deposit, Loma de La Plata, is 2.5 km away (T.N.M. Mar. 2-8/09).
The new resource estimate, which is based on 810 drill holes, has two salient features.
The first one is the new discovery at Valle Esperanza. Indicated resources here are 12 million tonnes of 172 grams silver per tonne, for 68 million oz. silver. Inferred resources are 11 million tonnes of 123 grams silver, for 43 million oz. silver.
The second feature is the firming-up of resources at Loma de La Plata, where a large part of the previous resource estimate was in the inferred category. The latest resource estimate for Loma de La Plata has indicated resources of 29 million tonnes grading 169 grams silver per tonne and 0.09% lead, for 158 million oz. silver and 58 million lbs. lead. Inferred resources at Loma are 3 million oz. silver and 6 million lbs. lead.
The firming-up of resources at Loma de La Plata is significant because Aquiline has released a preliminary economic assessment for Loma, and the firmed-up resource lends more credibility to the preliminary assessment.
The preliminary economic assessment calculated start-up capital costs of US$273 million for a 10,000 tonne-per-day operation, producing 15 million oz silver per year for 6.5 years at an average total cash cost of US$8.61 per oz. silver, including capital costs. These figures yield an internal rate of return (IRR) of 22%.
Previous metallurgical tests on material from Loma de La Plata showed silver recoveries between 80-85%.
In early April Aquiline released results from metallurgical tests on Valle Esperanza material. Material grading above 100 grams silver per tonne showed silver recoveries of about 90%, while material grading less than 100 grams silver per tonne showed silver recoveries between 70-80%.
Aquiline has also tested material from Barite Hill, which showed silver recoveries between 65-85%.
Chubut province has bans on open-pit mining and cyanide use. In a release, Aquiline said that it would aim to show Chubut that Navidad can be developed responsibly and economically.
On the news, Aquiline shares added one penny to $2.70. The shares have been trading in a $0.72-$8.89 range over the last 12 months.
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