Explorator Resources Inc.
TSX VENTURE : EXO

Explorator Resources Inc.

May 11, 2009 08:30 ET

Explorator Resources Completes Preliminary Assessment on Its El Espino Copper-Gold Project in Chile

1.467 BILLION RECOVERABLE POUNDS OF COPPER AND 755,000 RECOVERABLE OUNCES OF GOLD

TORONTO, ONTARIO--(Marketwire - May 11, 2009) - Explorator Resources Inc. ("Explorator" or the "Company") (TSX VENTURE:EXO) is pleased to announce that it has received the preliminary assessment ('scoping study') on the El Espino Project in Chile. The study was completed by AMEC, an international engineering consulting firm with extensive experience in geology, resource evaluation, mining, mineral processing, infrastructure, environment, cost estimation and financial analysis of mining projects worldwide. The study utilized reports by other specialized consultants including the resource estimate prepared by Micon International Limited ("Micon") and announced in November 2008 and metallurgical testwork completed by SGS Lakefield.

Highlights of the Scoping Study include:

- A pre-tax Net Present Value ("NPV") at an 8% discount rate of US$35 million at a base case life of mine copper price of US$1.80/lb and a gold price of US$680/oz.

- At a copper price of $2.00/lb, the pre-tax NPV rises to US$169 million.

- Average annual production of 77 million pounds of copper and 40,000 ounces of gold over a mine life of 19 years, including 165,000 ounces of gold scheduled for the first year.

- Significant potential to increase resource tonnage and grade.

- Average direct costs, inclusive of gold by-product credits, of US$18/t processed or US$1.40/ pound of copper.

- An estimated capital expenditure of US$434 million including a contingency of US$87 million.

David O'Connor, President and CEO, said "The main objectives of the scoping study were to: (1) provide a preliminary evaluation of the financial merits of the El Espino project; (2) determine the work required to advance the project to feasibility stage; and (3) to identify opportunities to enhance the economic value of the project. All objectives were met and we plan to take advantage of the opportunities identified to improve the value of the project. We are particularly excited about the potential to increase the copper-gold grade of the resources as the study indicates that a 10% increase in overall grade will increase the NPV by over US$100 million. Several of the higher grade zones within the identified resources are open along strike and at depth and have excellent potential to be expanded. Future exploration will focus on these higher grade, nearsurface zones which could have a dramatic positive impact on project economics."

The study envisages that the resources at El Espino will be mined by open-pit at a rate of 17,500 t.p.d. (6.4 Mt/a), with total production of 1.467 billion recoverable pounds of copper and 755,000 recoverable ounces of gold over a 19 year mine life. A significant amount of gold (165,000 ounces) is scheduled for production in the first year of operations, relying on very high grades found close to the surface. However, these resources have a marked nugget effect and continuity of the high grade zones is uncertain. Whereas the resource estimate has taken this into account by reducing the search ellipse parameters used and by capping the high grade gold values to 30 g/t, Explorator will increase the confidence in the location and grade of this material with more detailed drilling.

AMEC has developed an ultimate pit using Whittle software and a scoping level production plan that separates sulphide, oxide and high grade gold production and achieves a stripping ratio of 5.6:1 (W/O). Under these assumptions, the extracted portion of the Indicated and Inferred Mineral Resource estimated by Micon and announced in November, 2008, is approximately 17.4 Mt at 0.65% TCu and 0.22 g/t Au, and 96.4 Mt at 0.69% TCu and 0.29 g/t Au, respectively.

Metallurgical testing carried out by Lakefield and CIMM Laboratories has shown that the most profitable mineral processing procedure will be to recover the oxide mineralization in the flotation circuit. This will allow substantial recovery of the significant gold associated with the copper as well as reducing capital costs considerably by eliminating the need for a separate SXEW circuit.



DESIGN RECOVERIES

MINERALIZATION TYPE COPPER RECOVERY (%) GOLD
RECOVERY (%)

SULPHIDE 94.9 50 to 92
OXIDE 46 68
HIGH GRADE GOLD 46 83


For gold in the sulphides, AMEC used the following recovery function as the metallurgical data showed that the gold recoveries increase with grade:

Gold recovery from sulphide mineralization equals 115.31 x Au + 46.464 (maximum 96%).

Based on iron analyses completed by ALS Laboratories and logging of iron oxide minerals, AMEC state that there is also an opportunity to recover iron from the property. Magnetite and hematite could be recovered from the tailings, and this warrants additional metallurgical studies.

Explorator contracted Gestion Ambiental Consultores (GAC) who completed an environmental baseline study on the El Espino property which was used by AMEC to develop preliminary environmental and social mitigation costs associated with the development of a mine at El Espino.

AMEC has developed a preliminary development schedule in which project study and construction will take three and a half years and the first concentrate would be shipped in the second half of 2012.

The results of the scoping study, summarised in the form required by NI 43-101, will be posted on SEDAR.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured minerals resource category. The preliminary assessment is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is not certainty that the preliminary assessment will be realized.

The mineral resource estimate was completed using the Kriging estimation methodology. The resource estimate was based on block modeling with a search ellipse for the indicated resource of 75 metres by 55 metres by 20 metres and the search ellipse for the inferred resource of 180 metres by 90 metres by 36 metres for the copper resources. For high grade gold a third search ellipse of 35 metres by 25 metres by 10 metres was used to limit the extent of the higher grade mineralization in the indicated resource category. The resource estimate was based on using the grade from 6969 - 2 metre composites in 268 drill holes.

The Preliminary Assessment was prepared under the supervision of Mr. Emmanuel Henry (MAusIMM (CP)) of AMEC, who is a qualified person (QP) within the meaning of NI 43- 101. Mr. Henry has reviewed and approved the contents of this press release.

About Explorator Resources

Explorator Resources is a Canadian-based mining exploration company focused on advancing its El Espino Copper-Gold Project in Chile. The Company is currently completing a scoping study on the Project. The Project lies within the prolific coppergold mineral area of the Cordillera de la Costa and is central to an important cluster of "Candelaria-style" copper-gold deposits. It is located 3.5 hours drive north of Santiago. The El Espino project block covers 75 square kilometres and is host to major gold and copper mineralized structures on which nine small operating mines have been developed.

REGULATORY FOOTNOTE

Mr. Michael Schuler, Explorator's Vice President, Exploration is the "Qualified Person" as defined under National Instrument 43-101 and is responsible for the scientific and technical work on Explorator's exploration program and is responsible for reviewing the technical disclosure in this news release. All analytical work has been completed by ALS Chemex of La Serena in Chile; ALS Chemex is a respected international analytical service which is accredited with NATA and complies with standards of ISO 9001:2000 and ISO17025:1999. It employs a variety of international standards for quality control purposes. Samples are transported from the project to the ALS Chemex laboratory in La Serena sample by Company personnel or a reputable commercial carrier. All analytical testing is performed utilizing a variety of industry standard analytical techniques, including: (1) ALS Analytical Code Au-ICP22 (Au 50g fire assay with ICP-AES finish), (2) ALS analytical code Au-GRA22 (Au 50g fire assay with a gravity finish), (3) ALS analytical code ME-ICP61 (33 element analysis using a four acid digestion and ICP-AES analysis), and (4) ALS analytical code Cu-AA62 (ore grade copper analysis using a four acid digestion and an AAS finish. All diamond drill core is geologically logged, cut in half using a diamond saw and sampled by Company geologists in one (1) to three (3) meter sample intervals depending on visual grade estimates; the archive portion of the sample is securely stored at the company's core shed adjacent to the office in the town of Illapel.

The Company has initiated a QA/QC program consisting of utilizing standards, duplicate and blank samples and laboratory cross-checks and routinely repeats sample analysis.

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 is identified by words such as "estimates", "intends", "expects", "believes", "may", "will" and includes, 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. These statements are based on management's current expectations and beliefs and 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 public 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