Explorator Resources Inc.
TSX VENTURE : EXO

Explorator Resources Inc.

January 24, 2011 08:55 ET

Explorator Announces Highlights From the 2011 El Espino Updated Preliminary Economic Assessment-NPV of US$529 Million and IRR of 24.4%

(After tax, long-term reverting copper price of $2.40/lb and 8% discount rate)

Average payable production of 120 million lbs copper and 61,000 oz. gold over 13.5 years

TORONTO, ONTARIO--(Marketwire - Jan. 24, 2011) - Explorator Resources Inc. ("Explorator" or the "Company") (TSX VENTURE:EXO) reports highlights from an updated NI 43-101 compliant Preliminary Economic Assessment Technical Report on the El Espino project that has been undertaken on its behalf by AMEC International Ingenieria y Construccion Limitada ("AMEC"), (hereafter, collectively the "2011 AMEC Report"). Explorator holds an indirect interest in the El Espino project (the "Project") through its partially owned subsidiary, Explorator Resources Chile SCM ("Explorator Chile", 51% owned by Sociedad Punta del Cobre S.A. and 49% owned by Explorator).

Background:

The Project is located in Chile, 240 km north of Santiago and 30 km from the town of Illapel, and at modest elevation (+/- 1,000 metres ASL). It has excellent access to infrastructure, including year-round road access, coastal access within 93 km, and the Chilean national power grid transects the Property.

Previously, a NI 43-101 compliant Preliminary Assessment of the Project was prepared by Micon International ("Micon"), based on a Preliminary Scoping Study undertaken by AMEC in 2009 (the "2009 Micon Report" – See Explorator Press Release dated May 11, 2009).

Between July 2009 and October 2010, a further 133 holes totaling 28,948 m were drilled in the Project. Additional metallurgical test work, various capital and operating cost tradeoff studies and other Project technical work was also undertaken by, or on behalf of, Explorator Chile since the completion of the 2009 Micon Report. AMEC has incorporated some of this work into the preparation of the 2011 AMEC Report, which includes an updated Mineral Resource, a preliminary Mine Plan, Operating and Capital Costs and Financial Analysis for the Project (collectively, the "2011 Project Information"). AMEC has reviewed and approved the content of the 2011 Project Information disclosed herein. The complete 2011 AMEC Report will be filed on SEDAR within 45 days of this release. All currencies reported herein are in US$ unless otherwise stated.

Highlights from 2011 AMEC Report (with comparisons with 2009 Micon Report):

  • After-tax NPV (8%) and IRR: Base Case NPV8 of $529 million and 24.4% IRR, using long-term prices reverting to $2.40/lb copper and $1,000/oz. gold ($2.61/lb Cu or $2.62/lb including copper cathode premium and$1,059/oz Au average prices over the life of mine); $341 million NPV8 and 18.2% IRR at a flat prices of $2.40/lb Cu and $1,000/oz Au.
  • Mine Plan: Total payable LOM production increases to 1,621 million lbs Cu and 828,000 oz Au, from 1,467 million lbs and 755,000 oz. Au. Average annual payable production increases to 120 million lbs Cu and 61,000 oz Au over 13.5 years; from 79 million lbs and 40,000 oz over 19 years. Average annual production in Years 1-3 of 134 million lbs Cu and 71,000 oz. Au.
  • LOM Cash Costs: Base Case of $1.02/lb Cu from $1.06/lb, net of Au credit at an average of $1,059/oz. and $680/oz. respectively. Average Cash Cost for Years 1-3 of $0.66/lb, net of gold credit.
  • Measured and Indicated Mineral Resources: Increase to 144.8 million tonnes at 0.55% Cu, 0.22 g/t Au from 123.0 million tonnes at 0.66% Cu, 0.24 Au. Inferred Mineral Resources: increase to 85.4 million tonnes at 0.27% Cu, 0.15 g/t Au from 32.2 million tonnes at 0.60% Cu, and 0.19 g/t Au (2011 AMEC Report cut-off grades of 0.207% and 0.125% copper equivalent for oxides and sulphides respectively; 2009 Micon Report cut-off grades of 0.20% Cu for oxides and sulphides respectively).
  • Mineral Resources contained in the preliminary mine plan: Increases to 148 million tonnes at 0.57% Cu, 0.22 g/t Au, from 114 million tonnes at 0.69 Cu, 0.28 g/t Au. Life-of-mine (LOM) waste/ore strip ratio reduces to 4.7:1 from 5.6:1.
  • Process Flow Sheet: Differential flotation of oxides and sulphides followed by leaching of the oxide concentrate and SX-EW of copper oxide material; similar to 2009 Micon Report. Plant processing capacity increased to 30,000 tpd, from 17,500 tpd. Gold in the sulphides is recovered in a copper-gold concentrate. Gold in the oxides and in a separate high-grade gold mineralization is recovered by gravity concentration and cyanide leaching of the oxide concentrate.
  • Recoveries: Cu recoveries of 93% for sulphides and 79% for oxides; Au recoveries of 80% for sulphides and oxides and 95% for high grade gold material; compares to Cu recoveries of 95% for sulphides and 45% for oxides and Au recoveries of 46% for sulphides, 68% for oxides and 83% for high grade gold material in the 2009 Micon Report.
  • Capital costs: increase from $434 million to $712 million, including direct costs, indirect costs, owners costs, contingency and pre-production working capital.

David Prins, President and CEO of Explorator commented: "The recent drill program has confirmed and increased the previously identified resource whilst providing a higher degree of confidence in the continuity of the mineralized mantos system. It has also added to mine plan tonnage and contained copper and gold, at a moderately reduced strip ratio. The decrease in the mined overall copper and gold grades result primarily from the decrease in cut-off grades, due to higher assumed copper and gold prices and the use of copper equivalent grades rather than copper only grades. This has inevitably led to some increase in operating costs, which has been offset by higher copper oxide recoveries and higher overall gold recoveries, and an increased process plant throughput. Capital costs have increased significantly, due principally to the increased plant throughput, and additional flotation capacity required for the differential flotation process and plant modifications.

We believe that the 2011 AMEC Report has demonstrated that El Espino is a very robust project, particularly in light of the current high metal price environment. Unlike many development stage projects, it is also located in Chile, one of the world's best mining jurisdictions and is in close proximity to infrastructure. The deposit also remains open laterally and at depth which leaves open the potential for further increases in deposit scale in due course. Drilling of the peripheral deposit zones is continuing."

2011 AMEC Report Discussion:

I.  Updated Mineral Resources:

The updated Mineral Resources incorporates the results of an additional 26,652 meters of RC drilling that was completed during 2009 and up to the end of August 2010 within the "2009 Micon Report "pit footprint, which has increased the drilling density over the core of the ore body to 85 metre centers. The updated Mineral Resource was developed by AMEC from geological and drilling databases provided by Explorator Chile. The updated Measured, Indicated and Inferred Mineral Resources are set out in Table 1 below. The previous resource estimate undertaken by Micon in the 2009 Micon Report has been modified and updated by AMEC using additional drilling information and a copper price of $2.42/lb and a gold price of $1,047/oz. The long-term prices used in the financial evaluation were revised in the course of the project to reflect the current market trends and consequently are higher than those used in the resource evaluation.

Table 1
 
Category Material Tonnage (Mt) CuT (%) Au (g/t) CuEq (%)
Measured Oxides 11.5 0.54 0.22 0.70
Sulphides 15.8 0.61 0.24 0.76
Total 27.3 0.58 0.23 0.73
Indicated Oxides 22.0 0.48 0.20 0.61
Sulphides 95.6 0.56 0.21 0.69
Total 117.5 0.55 0.21 0.68
Measured + Indicated Oxides 33.5 0.50 0.21 0.64
Sulphides 111.4 0.57 0.22 0.70
Total 144.8 0.55 0.22 0.69
Inferred Oxides 12.7 0.30 0.19 0.42
Sulphides 72.7 0.26 0.14 0.35
Total 85.4 0.27 0.15 0.36
 
Notes to Accompany Open-pit Mineral Resource Table: 
     
1.   Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability;
2.   Mineral Resources are defined with a Lerchs-Grossmann pit shell, and reported at a 0.125 % CuEq cut-off grade for sulphides and 0.207% CuEq cut-off grade for oxides;
3.   Mineral Resources are reported using commodity prices of US$1,047/oz Au, and US$2.42/lb Cu; variable process recoveries based on redox state of the mineralization; a mining cost of US$1.52/t; a process cost of US$5.58/t for sulphide and US$8.28/t for oxide, with a treatment charge/refining charge of US$0.17/lb for sulphide; copper marketing cost of US$0.408/lb and gold marketing cost of US$6.5/oz;
4.   Tonnages are rounded to the nearest 1,000 t; grades are rounded to two decimal places;
5.   Rounding as required by reporting guidelines may result in apparent summation differences between tonnage, grade and contained metal;
6.   Tonnage and grade measurements are in metric units.
7.   Copper equivalent was calculated assuming recoveries of 90% and 82% for copper and gold.

Measured and Indicated Mineral Resources have increased by 21.8 million tonnes compared to the 2009 Micon Report, while the total copper grade has declined by 0.11% Cu, resulting in a 37 million lb. decrease in In-Situ copper. The gold grade has declined by 0.02 g/t, resulting in a 78,000 ounce increase in In-Situ gold after reflecting the higher tonnage.

Inferred Resources has increased by 53.2 million tonnes compared to the 2009 Micon Report, while the total inferred resource copper grade has declined by 0.33% CuT, resulting in an 83 million lb increase in In-Situ copper. The total gold grade has declined by 0.04 g/t, resulting in a 216,000 oz increase in In-Situ gold after reflecting the higher tonnage.

II. Updated Mine Plan:

AMEC developed a mine plan as a large scale open pit mine utilizing conventional truck and shovel mining. The mine plan calls for the extraction of 148 million tonnes of mineralized material and 695 million tonnes of waste over the projected 13.5 year mine life. Included in the above is pre-production stripping of 57 million tonnes of waste and 4 million tonnes of ore which are stockpiled for processing post start-up. Average life-of-mine head grades to the process plant are 0.57% Cu and 0.22 g/t Au. Importantly, the mine grades during the first three years of production will be higher, with average feed grades of 0.65% copper and 0.25 g/t gold.

Total life-of-mine payable production is 1,621 million lbs of copper and 828,000 ounces of gold, with annual average production of 120 million lbs of copper and 61,000 ounces of gold. Average payable production for years 1-3 is 134 million lbs of copper and 71,000 ounces of gold. The payable production is based on typical smelter deductions, copper recoveries of 93% for sulphides and 79% for oxide and mixed oxide–sulphide mineralization and gold recoveries of 80% for both sulphides and oxides and 95% for high grade gold.

Overall mineral contained in the updated mine plan has increased by 34.3 million tonnes or by 30% from the 2009 Micon Report, while the average copper grade has declined from 0.69% to 0.57% and the overall gold grade has declined from 0.28 g/t to 0.22 g/t, mostly due to lower cut-off grades. Life-of-mine payable copper production has increased by 154 million lbs, or 11% (from 1,467 million lbs) and payable gold has increased by 53,000 ounces, or 7% (from 775,000 ounces).

The overall LOM strip ratio has decreased from 5.6:1 to 4.7:1. The 2009-10 infill drill program was conducted almost completely within the footprint of the previously identified resource. While the drilling converted a portion of the previously defined waste into mineralization, it also added additional resource tonnage at depth and by further definition of the mineralized mantos system. With the increased metal price assumptions, this has led to an increase in the overall volume of material in the ultimate pit.

In developing the updated mine plan, AMEC used a Whittle Pit design price of $2.25/lb copper and a gold price of $910/oz, based on AMEC's assessment of reasonable long term prices over the project's mine life at the time the work was initiated. Subsequently, AMEC revised its commodity price outlook and used these higher prices in the financial model, including a Base Case of a reverting price model averaging $2.62/lb Cu including Cathode credits and $1,059/oz over the life of mine, and a flat $2.40/lb and $1,000/oz as an alternative case.

The updated mine plan is preliminary in nature and has used measured, indicated and inferred resources in the determination of in-pit mineable resources. The reader is cautioned that inferred resources are considered speculative from a geological perspective and there is no certainty that the indicated economic results can be achieved.

III. Recoveries and Process Flow Sheet:

The 2011 AMEC Report considers the same process flow sheet as the Micon 2009 report with the inclusion of a SART plant in order to reduce carbon consumption in the gold recovery process.

A metallurgical test program utilizing sea water as process makeup water was undertaken by CIMM laboratories in Santiago. Projected sulphide copper and gold recoveries were developed from 20 rougher flotation tests followed by six cleaner and scavenger flotation tests. Five locked cycle tests were conducted to determine the projected final concentrate copper and gold grades. One high grade gold sample from the sulphide zone was also selected and gravity test work carried out providing a projected gold recovery of 95% for this mineral.

Representative samples from the Rachel zone of the ore body were selected for both the oxide and sulphide minerals. These samples were then mixed into predesigned composites and ground at 100 µm, 140 µm, 160 µm and 200 µm and passed through a rougher flotation process in order to determine the optimum grind size. A grind size of 150 µm was determined to be the optimum grind size for further test work, and process design.

Further rougher flotation tests were then carried out followed by a three stage cleaner cycle and locked cycle tests. Rougher concentrate regrind product size was selected at 45 µm.

After initial experimental test work, final metallurgical parameters were selected to carry out test work on the oxide mineral and also blending proportions of oxide and sulphide minerals at ratios of 30%/70%, 50%/50% and 70%/30% to determine the impact of the oxide mineral on the sulphide flotation process. An optimal differential flotation period of 30 minutes was determined in order to economically maximize recoveries of oxide copper and gold. The "oxide" mineralization contains a significant portion of naturally occurring sulphide mineralization which enabled the stated recoveries. The most representative metallurgical test results of the feed grades in relation to the resource grades were then selected for the financial analysis. Further metallurgical test work is required in future work programs to further define these results.

Following which 33 rougher flotation tests were carried out on the oxide and the blended oxide and sulphide minerals. A single cycle of cleaner flotation was then carried out on the oxide differential flotation process followed be copper leaching of this product and the subsequent gold extraction via the cyanidation recovery process.

In order to determine the optimal process plant throughput, preliminary mine plans were developed for 20,000, 25,000, 30,000, 35,000 and 40,000 t/d throughputs. A base case capital estimate for the 20,000 t/d case was then factored up for each of the subsequent throughput options, and economic model were produced for each. The 30,000 t/d case was subsequently selected for the final evaluation and a detailed mine plan prepared for the corresponding process throughput.

Underground mining alternative evaluations and mine plans were also developed for the 20,000 t/d case on the deeper Pichinilla zone of the deposit, however these turned out to be sub economical.

IV. Updated Operating Costs:

Operating costs have been recalculated, to reflect current market conditions in conjunction with updated long term price forecasts. At Base Case reverting copper prices of $2.62/lb copper and $1,059/oz of gold, the life of mine operating costs are $1.02/lb of copper net of gold credit, compared to $1.06/lb projected in the 2009 Micon Report, using a copper price of $1.80/lb and $680/oz for gold. A breakdown of revised operating costs is set out in the Table 2 below:

To view the second table associated with this press release, click the following link: http://media3.marketwire.com/docs/explorator_resources_table2_jan24.pdf

Note: Gold credits $0.54/lb Cu at a Base Case reverting average LOM gold price of $1,059/oz and $0.51/lb at a flat gold price of $1,000/oz, resulting in Net Operating Costs of $1.02/lb and $1.05/lb respectively.

In developing operating costs, AMEC has used the following key operating cost inputs:

  • Power costs: $0.10/kwhr
  • Diesel Price: $0.75/l
  • Chilean peso/US$ exchange rate: 555:1
  • TC/RC: $65/t concentrate Treatment Charge and $0.065/lb Refining charge
  • Transport charges: $70/t concentrate (assumed Far East smelter); $60/t cathode.
V. Updated Capital Costs:

The revised Initial Capital Cost estimate is set out in Table 3 below:

Table 3
 
Area Cost (US$)
OPEN PIT MINE $ 198.903.000
SULPHIDE AND GOLD PROCESS PLANTS $ 210.000.000
TAILINGS $ 26.573.000
INFRASTRUCTURE $ 52.952.000
SUB TOTAL DIRECT COST $ 488.428.000
INDIRECT COST $ 79.121.000
OWNER'S COSTS $ 25.500.000
TOTAL INDIRECT COST $ 104.621.000
TOTAL DIRECT & INDIRECT COST $ 593.048.000
CONTINGENCY $ 118.746.000
TOTAL PROJECT COST $ 711.794.000

The total estimated initial capital cost for the project is $712 million. This has increased from $434 million in the 2009 Micon Report, due principally to the 71% increase in process plant capacity, from 17,500 tpd to 30,000 tpd, which has also resulted in an increase in mine equipment capacity and pre-stripping activities.

Mine equipment has increased by 24% from $107 million to $133 million whilst the pre-stripping cost has increased from $7 million to $64 million, due to a revised sequencing of mining phases, which requires higher pre-production stripping.

The process plant direct cost has increased by $102 million from $108 million to $210 million, principally due to the increased process plant capacity and additional floatation capacity, as well as the addition of a SART plant.

The water supply estimate has also increased from the 2009 Micon Report from $10 million to $37 million. In the 2009 Micon Report, water was to be sourced from local underground sources with existing water rights which were to be purchased. The current concept is to pipe sea water from the coast, a distance of 42 kilometers to the plant site.

The initial capital required for the tailings dam has decreased by 24% from $35 million to $27 million. This decrease is a result of further investigation which reduced the starter dam from 3 year capacity to approximately a 1.5 year capacity. The difference in capital has been included in the sustaining capital for the tailing dam continued construction during the operation of the mine.

Indirect costs have increased as a result of the overall increases mentioned above. The owners cost has increased by 85 % from $13.5 million to $25 million. A contingency of 10% has been applied to the mining equipment and pre-stripping. All other capital cost estimated items have a contingency of 25%, for an overall Project contingency of 20%. This compares to an overall contingency of 25% in the 2009 Micon Report.

In addition to the initial capital cost, AMEC has estimated sustaining capital costs of $120.2 million over the life of the mine, including $60.8 million for the mining fleet and $59.3 million for the tailings dam.

The revised capital cost estimate excludes inflation, project escalation and foreign currency exchange variations. The capital cost estimate has been calculated at a Chilean Peso/US$ foreign exchange rate of 555.

VI. Updated Financial Analysis:

Set out in Table 4 below is an updated summary financial analysis for the Project for the Base Case and across a number of other commodity price assumptions. The financial analysis assumes that the timeline for commencement of production is approximately 4 years from the date herein:

To view the fourth table associated with this press release, click the following link: http://media3.marketwire.com/docs/explorator_resources_table4_jan24.pdf

AMEC's base case financial analysis assumes a reverting curve averaging $2.61/lb copper price ($2.62/lb including cathode premium) and $1,059/oz gold price, tending towards a long-term average of $2.40/lb and $1,000/oz. All other cases are presented at flat prices for copper and gold over the life-of-mine. The post-tax returns are after Chilean Category 1 Tax (17%) and applicable government royalties, including the recently proposed amendments.

Opportunities:

Based on the work completed to date there are several significant opportunities that may offer the potential to further enhance the El Espino Project, including:

The full extent of the deposit has yet to be fully delimited laterally and at depth. Drilling activity is ongoing at the Project and this may result in an increase to the overall Project mine life or optimal plant scale.

In evaluating the proposed plant layout, there may be opportunities to relocate the primary crusher whereby the haulage distance for ore would be significantly reduced, thereby potentially reducing mining costs.

The mine plan, particularly in the first 3 years of operation, may be further optimized to enhance the Project economics and reduce project payback period.

In the pre-feasibility stage of evaluation, trade-off studies should be conducted into owner mining vs. contractor mining as this may present opportunities to reduce initial capital cost and enhance overall Project economics.

The Project's overall estimated capital cost exceeds that of recent comparable projects, particularly when benchmarked on a throughput equivalent basis. Further refinements to the capital cost estimation may yield opportunities for reduction.

Social / Environmental:

The project has yet to proceed to the stage of submitting an Environmental Impact Statement and an assessment of potential issues is still ongoing. Of note, the main social issue is the presence of settlers on the El Espino property. Although they do not own the right of land, the Chilean authorities will expect Explorator Chile to offer a fair compensation for their relocation. Explorator Chile has been proactively engaging with these settlers and has already assisted a number of the settlers who have voluntarily relocated.

Explorator Chile has also commissioned a study on how to handle certain archeological artifacts on the property, mainly pictograms, many of which are within the pit area. Explorator Chile will have to obtain approval to relocate these archeological artifacts as part of its overall Project approval process.

Risks:

As with most projects at this level of assessment, risks exist that may affect the development of the Project. Factors that could pose a risk to the Project include changes in world commodity markets, equity markets, costs and supply of labour and materials relevant to the mining industry, extent of resources actually contained in mineral deposits, geotechnical conditions, actual recoveries achieved in processing ore, marketing of concentrate, water management, local community opposition, environmental permitting and change of regulations to the mining industry. Also see section "Context of the 2011 AMEC Report", below.

VII. 2010 El Espino 43-101 Technical Report:

Explorator retained AMEC in connection with the preparation of the 2011 El Espino NI 43-101 Preliminary Assessment Technical Report (the "2011 AMEC Report"). The 2011 AMEC Report will be completed and filed on SEDAR and Explorator's web site within 45 days of this release.

The updated Mineral Resource and mine plan and all other technical and financial information contained herein has either been developed by AMEC or has been reviewed and accepted by AMEC. Emmanuel Henry MAusIMM (CP) and Armando Simon RPGeo, principals of AMEC, were responsible for reviewing the updated Mineral Resource. Marcelo Hernando, MAusIMM, Senior Mining Engineer at AMEC, was responsible for Mine Planning. Perla Acuna, MAusIMM, has reviewed the metallurgical test works and the process design. Emmanuel Henry was also responsible for reviewing the capital and operating costs and the updated financial analysis contained herein. Collectively, Emmanuel Henry, Armando Simon, Marcelo Hernando and Perla Acuna are the Qualified Persons for purposes of NI 43-101, and have approved the El Espino Information contained in this press release.

About AMEC:

AMEC is a focused supplier of value-added consultancy, engineering and project management services to the world's natural resources, nuclear, clean energy, water and environmental sectors. AMEC employs over 21,000 people in around 40 countries worldwide. In the mining sector, AMEC has primary centers of expertise, located in Canada, USA, Chile, Peru, Brazil, South Africa, Australia and the United Kingdom, from which it provides comprehensive project evaluation and execution capabilities.

Context of 2011 AMEC Report:

AMEC was retained by Explorator in connection with the preparation of an NI 43-101 compliant assessment of an internal scoping study, undertaken on behalf of Explorator Resources Chile, its 49% owned affiliate which owns the Project (the "Internal Scoping Study"), which was completed in late December, 2010. Sociedad Punta del Cobre S.A. owns the remaining 51% of SCM and is Project operator.

In undertaking its assessment, AMEC developed an independent geological resource calculation, derived by AMEC from a geological and drilling data base provided by Explorator Chile. This estimate was developed on a copper-equivalence basis and differs materially from the Internal Scoping Study geological resource calculation.

Since AMEC did not endorse the geological resource contained in the Internal Scoping Study, AMEC then undertook an independent whittle pit evaluation of the AMEC geological resource in order to develop its own estimate of the mineable resource. This evaluation was based on AMEC's assessment of Project metallurgical recovery test work and alternative process flow sheets, and various assumptions as to commodity price and cost inputs that AMEC deems are reasonable. Various such assumptions differed materially from those used in the Internal Scoping Study, resulting in the selection by AMEC of a different optimal process flow sheet, and materially different assessments of the mineable resource and mine plan. AMEC also developed an assessment of the optimal process plant throughput rate, capital costs, operating costs and economic evaluation of the Project. This work was derived in part from the work undertaken in the Internal Scoping Study and in part from AMEC's own independent assessment, based on its recent experience with mining projects in Chile and globally.

The AMEC Report reflects AMEC's current assessment as to the optimal development program for the Project. However, the reader is cautioned that Explorator is not the operator of the Project. Accordingly, in the event of a development decision, Explorator cannot compel Pucobre, the Project operator, to implement a development program that is in accordance with that set out in the AMEC Report.

OTHER INFORMATION:

A copy of the release, as well as other information related to the Company, is available on the Company's web site at www.explorator.ca and on SEDAR at www.sedar.com.

EXPLORATOR RESOURCES INC.

David Prins, President & CEO

ABOUT EXPLORATOR RESOURCES:

Explorator Resources is a Canadian-based mining exploration company with a 49% interest in the El Espino Copper-Gold Project in Chile (the "Project"). Sociedad Punta del Cobre S.A. ("SPC") acquired the remaining 51% of the Project in March 2009 in return for an investment of up to US$18.5 million, with US$7.0 million used to exercise the option to purchase agreement on the Project and the remaining funds directed at the continued exploration and evaluation activities.

The Project lies within the prolific copper-gold mineral area of the Cordillera de la Costa, 240 km. north of Santiago. An Updated Preliminary Economic Assessment (see press release dated Jan 24, 2011) defined the potential for an average annual payable production of 120 million pounds of copper and 61,000 ounces of gold over a 13.5 year mine life (life-of-mine payable production of 1.621 billion lbs copper and 828,000 oz. gold) at an average cash cost for the base case of $1.02/lb, net of gold credits (based on a gold price of $1,059/oz.).

FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information are identified by words such as "estimates", "intends", "expects", "believes", "may", "will" and included, without limitation, statements regarding the company's plan of business operations, production levels and costs, potential contractual arrangements and the delivery of equipment, receipt of working capital, anticipated revenues, mineral reserve and mineral resource estimates, and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, risks inherent in the mining industry, financing risks, labour risks, uncertainty of mineral reserve and resource estimates, equipment and supply risks, regulatory risks and environmental concerns. Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Explorator Resources Inc.
    David Prins
    President & CEO
    +56 2 793-4925
    www.explorator.ca