PGM Ventures Corporation

PGM Ventures Corporation

June 06, 2006 10:13 ET

PGM Commissions Study for New Decline Shaft at Aguas Tenidas

TORONTO, ONTARIO--(CCNMatthews - June 6, 2006) - PGM Ventures Corporation ("PGM") (TSX VENTURE:PPG) is pleased to announce that it has appointed Adam Wheeler of Cornwall, UK, to provide a detailed study on the costs and benefits to be derived from sinking a second decline shaft to a final vertical depth of approximately 585 metres in the deeper western part of its wholly owned Aguas Tenidas project in SW Spain.

It is anticipated the study will be completed in July of this year and, if implemented, would lead to a change in the mining plan currently proposed by SRK Consulting of Cardiff UK in its January 18th Feasibility Study on the Aguas Tenidas project.

Included in the potential benefits of sinking a new decline shaft are the following:

a) According to the SRK Feasibility Study, the higher grade areas of the primary copper and the footwall polymetallic (zinc) mineralisation are located in the deeper, western parts of the Aguas Tenidas Main Deposit

b) Accessing these higher grade areas early in the mine's life should result in improved economics that could allow an accelerated repayment schedule of the Company's currently proposed US$100 million bank debt facility

c) Improved ventilation

d) Improved mining flexibility

e) The proposed new decline shaft would have greater dimensions than the existing 5.0 x 4.5m decline and therefore would be able to either accommodate trucks with a greater than 50 tonne haulage capacity or the installation of an ore conveyor system.

Assuming the Wheeler report demonstrates improved economics, then the additional capital costs for the proposed new decline shaft would be partially offset by the following savings:

a) Eliminate the need to construct passing bays in the existing decline shaft

b) Enable the use of larger and therefore more efficient trucks, reducing the per tonne cost of hauling material to surface

c) Eliminate the need to rehabilitate the existing electric assist Kiruna trucks and power line

d) The site for the proposed portal for the decline shaft would be adjacent to the ore processing plant, thus eliminating the need for double handling and trucking the ore two kilometres along public roads, which in turn would result in reduced noise and dust

e) Eliminates the need for a new ventilation shaft and emergency escape way.

Investec Bank (UK) Ltd has, subject to receipt of favourable findings by the Wheeler report and the support of its own independent experts, indicated its willingness to provide additional debt funding for the decline shaft, as well as capital cost overrun facilities for the overall Aguas Tenidas project.

The above mentioned study will be undertaken with technical assistance provided by the executive management of MATSA, PGM's wholly owned Spanish subsidiary. Mike Newbury, P.Eng., is the Qualified Person who has reviewed the technical information in this news release on behalf of the company.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are in Canadian dollars unless otherwise noted.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • PGM Ventures Corporation
    Peter Miller or Norm Brewster
    1 (416) 815-8666