Bacanora Announces Completion of Pilot Plant Construction and Commencement of Commissioning
CALGARY, ALBERTA -- (Marketwired) -- 06/11/13 -- BACANORA MINERALS LTD. ("Bacanora" or the "Company") (TSX VENTURE: BCN) is pleased to announce that construction of its pilot plant in Hermosillo, Mexico is complete and it is entering the commissioning phase. Commissioning is expected to take approximately two weeks. The pilot plant will initially be supplied with colemanite-bearing material excavated from the Company's El Cajon borate deposit located near the town of Magdalena de Kino, Sonora, Mexico. Bulk sampling of approximately 2,000 tonnes of material from the El Cajon borate deposit has been completed to use as feed for the pilot plant.
The pilot plant has the capacity to process 150 tonnes of material per day. The object of the test work will be to produce colemanite samples for potential consumers, in order to establish a market and pricing for El Cajon colemanite, as well as data needed to move the project forward to the feasibility stage for larger borate mining and production facilities.
In addition, at the pilot plant laboratory, bench tests on low-grade (6% to 10% B2O3) colemanite-bearing material have successfully recovered boric acid. The low-grade material used for these tests is not in the current mineral resource inventory. Addition of a boric acid circuit to the pilot plant is underway as boric acid is a higher margin product than colemanite and production of boric acid from lower grade material would considerably extend the life of mine.
About the Magdalena Borate Project:
The Magdalena Borate Project consists of three main borate zones: El Cajon, Bellota and Pozo Nuevo. Other targets include the recently discovered Represo colemanite prospect and the Escuadra occurrence. The El Cajon deposit is the most advanced of these targets. Concessions constituting the Magdalena Borate Project are 100% owned by Bacanora's wholly-owned subsidiary, Minera Sonora Borax S.A. de C.V., subject to royalties totaling 6% of revenues realized.
Highlights of the technical report entitled "Preliminary Economic Assessment for the El Cajon Borate Deposit, Magdalena Basin Project, Sonora, Mexico" and dated January 4, 2013 (the "PEA"), which has been completed in respect of the El Cajon deposit for a potential colemanite mine, include a production facility with a mining rate of 231,100 tonnes averaging 10.5% B2O3 per annum to yield 50,000 tonnes of 40-42% colemanite concentrate per year over a 25 year mine life and suggest annual revenue of $US25 million for an IRR of 24.8% with a 4 year pay back. Capital costs are estimated at $US7.25 million and average operating costs at $US170/tonne. Net Present Value ("NPV") of the project, discounted at 8%, is $US113 million, assuming an average colemanite concentrate price of $US500/tonne. It should be noted that the economic assessment set forth in the PEA and all figures reproduced therein and herein are based upon indicated mineral resources. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, the PEA includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.
Colemanite is a boron mineral that is used to produce boric acid, a compound used in a number of industrial applications that are in general designed to reduce energy consumption. Colemanite itself has industrial applications in ceramics and agriculture. Current contract prices for colemanite range from $US630 to $US730 per tonne; contract prices for chemical grade boric acid range from $US800 to $US1,250 per tonne, depending on purity.
Carl G. Verley, P.Geo. is the Qualified Person pursuant to National Instrument 43-101 and has reviewed of the technical contents of this news release.
Reader Advisory
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information in this press release includes, but is not limited to, the estimated future value of the El Cajon deposit. Disclosure pertaining to such deposit is derived from the Company's technical report titled "Preliminary Economic Assessment for the El Cajon Borate Deposit, Magdalena Basin Project, Sonora, Mexico" and dated January 4, 2013 (the "PEA"), which has been completed in respect of of the El Cajon deposit in accordance with applicable Canadian securities laws and regulatory policies. The PEA is available under the Company's corporate profile on SEDAR at www.sedar.com and readers are encouraged to review the PEAs in its entirety. It should be noted that in the case of the El Cajon deposit, such economic assessment and all figures reproduced therein and herein are based upon indicated mineral resources. Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, such preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. In order to make the preliminary economic assessment, the Qualified Person in respect of the PEA has used forward looking information including, but not limited to assumptions concerning commodity prices, cash flow forecasts, project capital and operating costs, commodity recoveries, mine life and production rates. Readers are cautioned that actual results, should they be realized, may vary from those presented in the PEA.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in Canada, the United States, Mexico and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com and within the body of the PEA. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
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Contacts:
Shane Shircliff
Chief Executive Officer
(306) 649-0602
(306) 649-0601 (FAX)
www.bacanoraminerals.com