Peregrine Metals Ltd.
TSX : PGM

Peregrine Metals Ltd.

December 15, 2010 08:20 ET

Peregrine Metals Commences Field Operations and Advances Preliminary Economic Assessment at Altar Copper-Gold Porphyry in Argentina

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 15, 2010) - Peregrine Metals Ltd. (TSX:PGM) ("Peregrine Metals" or "the Company") is pleased to report that field operations have commenced at the Altar porphyry copper-gold project ("Altar" or "the Project") in San Juan Province, Argentina and that the ongoing Altar preliminary economic assessment ("PEA") is progressing as scheduled.

The 2010/2011 field programme at Altar is underway, and is expected to continue through March, 2011. There are two core drills at the Project, and the first two metallurgical diamond drill holes (PQ size, 8.5 cm) have been completed. A total of 2,000 metres of metallurgical test drilling is planned in six holes under this programme. These holes are twins of existing resource definition core holes, and are designed to provide sample feed for flotation optimization testwork to be conducted during the first and second quarters of 2011, as well as other planned metallurgical testwork under the PEA.

The Company has also commenced an exploration drilling programme on the Project. The first of four planned core holes is underway at the Quebrada de la Mina prospect ("QDM"), located two kilometres northwest of Altar. This copper-gold porphyry target has yet to be drilled, but was the subject of a rock chip sampling programme in 2010, where 52 rock chip grab samples from a 150 metre by 300 metre area of abundant outcrop in the center of QDM returned gold assay values averaging 0.7 grams per tonne (g/t), and with the highest value being 3.9 g/t. This area of sampling is coincident with the center of an induced polarization geophysical anomaly that measures 300 metres by 900 metres. Also visible near QDM is a small pond with evidence of copper leaching. Under the current exploration programme, at least two core holes will also be drilled on an epithermal gold target in the eastern portion of Altar to determine the bulk tonnage gold potential.

As reported on October 4, 2010, the PEA is focussed on a combined leach and concentrator mining operation. Work completed or underway on the PEA includes the following: environmental baseline studies, road access studies, infrastructure siting studies, preliminary water supply studies, geotechnical studies, metallurgical and mineralogical studies, mine scheduling and a discounted cash flow model that will examine the project economics under various copper pricing scenarios. Mine scheduling will be used to optimize the recovery of the higher grade material in the upper portions of the deposit in the early years of operations. 

Mr. Eric Friedland, Chief Executive Officer of Peregrine Metals, said, "Our preliminary economic assessment is proceeding well, and on October 4, 2010 we announced a 74 percent increase in the resources at Altar, where we currently have 7.41 billion pounds of copper in the measured and indicated category and 4.32 billion pounds in the inferred category, both at a 0.3% copper cut-off grade. The PEA will determine the best combination of mining and processing options at Altar and we expect to complete the study by the third quarter, 2011. There is a heightened level of industry interest in large copper deposits such as Altar, due to the continued strong copper price and recent corporate activity in this sector."

The Company is continuing with its detailed mineralogical examination of the Altar deposit as part of the metallurgical test-work programme. A comprehensive programme of ore petrography work is underway with the examination of 120 mineralogical composites from throughout the orebody. Each composite consists of ten metre drill hole intervals of coarse assay rejects taken from a wide range of depths from a selection of 28 diamond drill holes with all host rock lithologies and mineralization types being represented.

The copper column leach tests that are currently underway at McClelland Laboratories, Nevada, are designed to study the relationships of host lithology, ore grade and mineral solubility to the kinetics of copper extraction over time in a leaching scenario. Twenty columns were included in the programme, and leaching began in June, 2010. Interim results on the column leach tests show that after 158 days, the copper recoveries range up to 72 percent of total copper content. Some of the columns were loaded with higher percentages of refractory copper mineralization to better understand the potential leach parameters of that type of mineralization, which traditionally does not respond well to leaching. The total copper recovery in all the non-refractory columns currently averages 63 percent of total copper content and leaching is continuing.

The 2011 flotation test programme is planned to involve eight semi-autogenous grinding ("SAG") comminution tests, eight ball mill grind tests, comprehensive flotation optimization tests on two master composites (grind size optimization, reagent and pH screening), 16 variability flotation tests and four float concentrate autoclave tests. The two master composites represent two of the major copper-bearing lithologies, quartz porphyry and rhyolite. Preliminary comminution tests announced on July 8, 2010 showed the material is easy to crush, has a high porosity and has low abrasion characteristics. 

Supplementary 2011 testwork could include two pyrite flotation tests from rougher tails, two gold cyanide column leach tests on leached capping material, and two copper column leach tests on low-grade sulphide material.

The budget for 2011 operations, including completion of the ongoing PEA, is expected to be approximately US$9.5 million. The Company had cash resources of approximately CDN$12.4 million on November 1, 2010. 

Images of the project and the updated resource can be viewed at http://www.pmet.com/i/pdf/altar416.pdf.

Updates on the 2011 field programme and PEA progress will be issued on a regular basis.

BACKGROUND INFORMATION

Altar is a large Andean-style porphyry copper-gold deposit. The alteration zone encompasses an area measuring over three by two kilometres with a strong, coincident induced polarization ("IP") geophysical anomaly of approximately the same size. A total of 140 core holes has been drilled at the Project for 55,641 metres, and the deposit remains open in two directions and at depth. 

The resource estimates detailed in the Technical Report for the Altar project are summarized in the following table.

2010 ALTAR RESOURCE ESTIMATE
 
        Contained Metal
Resource Copper Cut-off
Grade
(% CuEq)*
Quantity
Tonnes
(Million)
Cu Equivalent
Grade
(% CuEq)*
Copper
(Billion lbs)
Gold
(Million oz)
Measured 0.3 491 0.45 4.69 0.96
Indicated 0.3 311 0.41 2.72 0.57
Measured + Indicated 0.3 802 0.44 7.41 1.53
Inferred 0.3 465 0.44 4.32 0.88
Note: Mineral Resources that are not mineral reserves do not yet have demonstrated economic viability. More information on the resource estimation is available on page seven of the October 4, 2010 Technical Report, which is filed on SEDAR and is available on the Company's website.
*The copper equivalent ("CuEq") calculation is based on a copper price of US$2.80/lb and gold price of US$850/oz. It also includes a factor to compensate for an assumed gold recovery of 65% and a 90% recovery for copper.

Peregrine Metals holds a 100% interest in the Altar project subject to a 1% NSR royalty granted to Rio Tinto and another 1% NSR royalty granted to the underlying concession owners that may be purchased by Peregrine Metals from the underlying owners at any time for US $1 million.

Jeff Toohey, M.Sc., P.Eng., Vice President Exploration for the Company, is a Qualified Person as defined by NI 43-101 and is responsible for the design and implementation of the exploration work being carried out by the Company at the Altar Project.

Cautionary Note Regarding Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Such forward-looking statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned exploration and development of its properties, planned expenditures and plans related to its business, mineral resource estimates and other matters that may occur in the future. These statements relate to analyses and other information that are based on expectations of future performance and planned work programmes. The Company has made a number of assumptions with respect to, among other things, the price of copper and other metals, economic and political conditions, and continuity of operations. Although the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following: fluctuations in mineral prices; the Company's dependence on one mineral project; the nature of mineral exploration and mining and the uncertain commercial viability of certain mineral deposits; the re-allocation of the proposed uses of the net proceeds of the offering and the private placement; the Company's lack of operating revenues; uncertainty in the Company's ability to obtain necessary financing to fund the development of its mineral properties or the completion of further exploration programmes; the Company's principal property being located in Argentina, including political, economic, and regulatory instability; governmental regulations and obtaining necessary licenses and permits; the Company's mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; fluctuations in the currency markets (particularly the Argentina peso, Canadian dollar and United States dollar); the business being subject to environmental laws and regulations which may increase costs of doing business and restrict the Company's operations; and the Company's dependence on key personnel. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company's forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

Contact Information

  • Peregrine Metals Ltd.
    Mr. Eric Friedland
    President
    (604) 669-8800
    or
    Peregrine Metals Ltd.
    Mr. Michael Westerlund
    VP Investor Relations and Corporate Communications
    (604) 669-8800
    (604) 408-8881 (FAX)
    info@pmet.com
    www.pmet.com