Metco Resources inc.

Metco Resources inc.

July 18, 2007 10:23 ET

Metco Resources Inc.: Results of Prefeasibility Study on the Caber Deposit and Technical Report on the Caber and Caber North Deposits, Matagami

MONTREAL, CANADA--(Marketwire - July 18, 2007) - Metco Resources Inc. ("Metco") (TSX VENTURE:MKO) announces the release of the NI 43-101 document entitled: "Prefeasibility Study on the Caber Deposit - Technical Report on the Caber and Caber North Deposits, Matagami, Quebec" prepared by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA") of Toronto for geology, diamond drilling programs and mineral resource estimation, and GENIVAR Limited Partnership ("Genivar"), an engineering firm of Quebec City, for mining, mineral reserve estimates, metallurgy, infrastructures and economic evaluation. Metco holds 100% of Caber and Caber North deposits.

Genivar has concluded that under the level of precision achieved in this study (± 25%), the Caber project is technically feasible and, after the cash flow and sensitivity analysis, is economically viable as well.

The following results were obtained under certain parameters and assumptions provided below:

- The Caber project can generate a positive net cash flow of: $19,972,000 before taxes;

- The cash flow Net Present Value (NPV) discounted at 8%: $12,292,000;

- The Internal Rate of Return (IRR): 30.34%;

- Payback period of 30 months on a total project timeframe of 40.5 months;

- An increase in metal prices of +10% results in a NPV @ 8% of $20,751,000;

- A decrease in metal prices of -10% results in a NPV @ 8% of $3,832,000;

- With metal prices +10%, the IRR becomes 44.69% and with -10% it becomes 15.18%.

The mineral resources of the Caber deposit were first reviewed and re-estimated by Scott Wilson RPA at:

Indicated category: 494,000 tonnes @ 10.9% Zn, 1.1% Cu, 11 g/t Ag and 0.15 g/t Au

Inferred category: 171,000 tonnes @ 8.4% Zn, 1.3% Cu, 11 g/t Ag and 0.17 g/t Au

Based solely on the indicated mineral resources, Genivar has calculated that the Caber deposit contains probable mineral reserves of:

589,000 tonnes at an average grade of 8.58% Zn, 0.84% Cu, 8.89 g/t Ag and 0.13 g/t Au

Genivar has calculated those reserves after designing a mining plan in which the deposit is accessed via a ramp and where sublevel stoping with longitudinal retreat and delayed cemented rock fill was the mining method used.

Mining and milling of those probable mineral reserves were then evaluated according to the following parameters:

- Ore is transported by truck over a distance of 38 km to railhead in Matagami, then transported by train over a distance of 110 km to Breakwater's Langlois Mill at Lebel-sur-Quevillon. Milling is scheduled at the rate of 1,000 tonnes/day.

- Capital and ongoing investments: $35,231,000 including a 14.1% contingency.

- Project life: 40.5 months, including 15 months for construction and 25.5 months of production.

- Metal prices used: Zn: US $1.12/lb, Cu: US $2.55/lb, Ag: US $12.00/oz, Au: US $600/oz.

- Exchange rate used: Can $1.09 per US $.

- A 1% NSR royalty is payable to International Royalties.

- Milling at direct milling cost +10%.

- Metal recoveries used: Zn = 93%, Cu = 84%, Ag = 34%, Au = 35%.

- Overall operating cost of $81.07 per tonne milled including ore transportation.

The surface and underground exploration programs that were laid out by Scott Wilson RPA to enhance the categorization of the inferred mineral resources of the Caber and the Caber North deposits are not included in either capital nor in operating costs. The current inferred mineral resources at Caber North are estimated at:

2,610,000 tonnes(1) at an average grade of 4.26% Zn, 1.59% Cu, 21.06 g/t Ag

(1) Categorized by A.Tremblay, Eng. 2003

Scott Wilson RPA reviewed the inferred mineral resources at Caber North and considers the classification to be appropriate.

The corporate strategy of Metco is to search for, acquire, explore, and develop mining properties with a high potential for base metals throughout Canada.

Florent Gauthier, P.Eng., is the qualified person who has reviewed the content of this news release.

The authors of the NI 43-101 Report have also provided their approval for its release and also for the present press release.

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

Contact Information

  • Metco Resources Inc.
    Florent Gauthier
    514-954-9673 (FAX)
    SOLAK Communications
    Francois Kalos