Atacama Minerals Corp.
TSX VENTURE : AAM

Atacama Minerals Corp.

October 20, 2005 09:30 ET

Atacama Mine Expansion Progress Report

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 20, 2005) - Atacama Minerals Corp. (TSX VENTURE:AAM) ("Atacama" or "the Company") is pleased to report that expansion plans for the Aguas Blancas mine in Chile are well underway and making good progress. The US$12 million program is aimed at increasing the current level of iodine production from 750 tonnes per annum to 1440 tonnes per annum. In addition, construction of evaporation ponds for production of sodium sulphate and potassium nitrate is underway.

The current iodine production of the Aguas Blancas Mine is in the process of being expanded by the addition of capacity to the plant in the form of a third blow-out tower and sulphur plant, a new pregnant brine pond, new evaporation ponds covering 1.2 million square meters and construction of additional heap leach pads. Construction is currently underway with completion expected by January 2006. In addition, a small-scale agitated leach plant is under construction and expected to be in operation the first quarter of 2006 to be used for refining parameters for a full-scale agitated leach operation, ultimately replacing the current heap-leach operations. By January, 2006 iodine production capability will have been expanded by at least 50% to 1080 tonnes per annum (90 tonnes per month).

To facilitate analyses of drill results and product quality, a modern analytical lab is also being constructed on site and expected to be operational before year end.

In order to improve mine production, a new mining contractor started October 1, 2005. One of the largest mining contractors in Chile - Incopesa, has been contracted to deliver a minimum of 200,000 tonnes of ore per month initially using conventional truck and loader equipment. The mining operation will convert to the use of a new continuous mining machine in January 2006. This machine will have a capacity of providing in excess of 300,000 tonnes per month. The use of the continuous mining machine will improve grade control, minimize mining dilution and provide for direct production of minus six inch material to be supplied to the heap-leach piles as well as to the grinding circuit for the agitated leach plant, thus eliminating the need for crushing.

The goal of the Company is to reach iodine production of 120 tonnes per month by early 2007 using the full agitated leach process. Management is encouraged by the recent very robust nature of the iodine market noting that prices have risen from a level of US$13,000 per tonne in late 2004 to the current level in excess of US$19,000 per tonne.

In the meantime, preliminary design work for the first phase of sodium sulphate production is rapidly progressing along with development plans for potassium nitrate production. Sodium sulphate production is aiming at first phase production capacity of 100,000 tonnes per year while potassium nitrate production is tentatively aimed at 60,000 tonnes per year. The company expects to announce appropriate production decisions within the next few months.

Edward F. Posey, President of the Company stated, "We are very pleased with the rapid progress being made at the Aguas Blancas operation since taking over 100% control in May of this year. We have a hard-working professional team and look forward to building Atacama Minerals into one of the most progressive and lucrative industrial mining operations in Chile."

The programs currently underway are being undertaken with the assistance of AMEC International Chile S.A. (AMEC), an independent international engineering consulting firm based in Santiago, Chile. Mr. Ron F. Hochstein, P.Eng., MBA., Atacama's Qualified Person pursuant to NI 43-101, has reviewed the technical contents of this release. Mr. Hochstein is a Director of the Company.

Atacama Minerals Corp. is an industrial minerals company with producing assets in Chile. The Company holds a 100% interest in the Aguas Blancas iodine/sulphate/nitrate mine located near Antofagasta in northern Chile.

ON BEHALF OF THE BOARD

Edward F. Posey, President


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

Contact Information

  • Atacama Minerals Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)
    www.atacama.com