SOURCE: Searchlight Minerals Corp.

Searchlight Minerals Corp.

August 16, 2010 07:00 ET

Searchlight Minerals Provides Clarkdale Operations Update

HENDERSON, NV--(Marketwire - August 16, 2010) -  Searchlight Minerals Corp. (OTCBB: SRCH) ("Searchlight," "SMC" or the "Company"), an exploration stage minerals company focused on precious metals projects in the southwestern United States, has filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. In the filing, the Company included an update on the activities at its Clarkdale Slag Project (the "Project") in north-central Arizona.

Overview

Prior to 2009, the Company completed a drilling and sampling program, operated a small pilot plant in Phoenix, Arizona, completed an internal prefeasibility study of the pilot plant, acquired the Project, and designed and constructed a demonstration production module. Most of 2009 was devoted to attempts to commission and optimize the production module, during which time the Company encountered numerous challenges involving its crushing and grinding circuit. In early 2010, the Company brought in experienced outside engineering resources to better define and execute on a multi-pronged approach to commercial feasibility of the Project. This refocusing effort has resulted in significant progress, both operationally and from a research and development perspective, and the technical team is in the final stages of analyzing multiple processes in order to determine the most efficient and productive path towards the completion of a bankable feasibility study.

Background

The Company's primary goal consistently has been to demonstrate the economic viability of the Project, including the generation of a bankable feasibility study for the Project. This work has required developing a technically viable flow sheet for extracting gold, silver, copper and zinc from the slag material at the Project site. The Company began work on the Project under a joint venture arrangement with the then existing owners of the Clarkdale site, with qualified independent engineers, by drilling and sampling the slag pile, under chain-of-custody standards, in order to understand potential grades and tonnages. After obtaining results from these efforts, the Company proceeded to work on the metallurgy capable of unlocking the value of the metals contained in the slag material. To achieve this objective, the Company operated a small pilot plant in Phoenix, Arizona, and completed an internal pre-feasibility study. The results of this work demonstrated that, with proper grinding, a simple halide leach could extract the precious and base metals in sufficient quantities which could potentially be economically viable. The next step involved the construction of a larger pilot plant (test module) at the Clarkdale site designed to test the commercial viability of the process and to complete a feasibility study. The flow sheet created for the test module did not contain any proprietary or "black box" technology, but management was not aware of any commercial mining operation that used this specific equipment and chemistry. The Company proceeded to build one commercial module rather than complete a theoretical feasibility study. Concurrently, the Company completed the acquisition of the Clarkdale Project site from the previous owners.

Thereafter, the Company designed and built an operational plant in order to process 100-250 tons of slag per day based upon the pilot program in Phoenix. The plant was staffed and commissioned in the first quarter of 2009. However, although the crushing and grinding circuit was able to produce assays from small samples of milled product that demonstrated the presence of 0.4 ounces per ton of gold in the slag material, the benign leach chemistry used in the operational plant was unable to duplicate the results of the liberation of gold from the slag material achieved in the pilot plant.

The key to the potential success of the flow sheet involves the mechanical liberation of the metals by proper grinding. This process proved to be a significant challenge for the larger grinding equipment installed on site. After an entire year of innovative attempts and modifications, the grinding circuit failed to liberate the precious metals sufficiently to allow the simple and benign halide leach circuit to operate effectively. The Company concluded that investigations of alternative grinding and leaching methods were necessary in order to solve the problem. The Company has conducted preliminary studies of these alternative approaches to the process flow sheet, which have shown promising results and are the current focus of the Company's efforts.

External Resources and Multiple Path Strategy

In early 2010, in order to focus more effectively on alternative approaches to the process flow sheet, the Company supplemented its internal technical team with a new Project Manager and additional experienced engineers. The new engineering team consists of specialists in grinding, leaching, autoclaving, filtration, resins, solvent extraction and electro-winning. Of the five experienced engineering professionals brought in to assist the Company's internal technical team, three are registered "qualified persons" by the Mining and Minerals Association of America (MMSA).

The technical staff refocused our resources and activities in accordance with operational and research and development objectives. The operational team was tasked with retrofitting the existing plant to operate and produce metal. The research and development team was tasked with exploring new grinding, leaching and extraction alternatives that would be suitable and economically viable. As a result of these efforts, four potential flow sheets have been identified for the project and are currently being tested. They are as follows:

  • Original Halide Leach (R&D Focus). The technical team's preferred path to feasibility involves a focus on a mechanical liberation of the metals that would allow the simple halide leach to work effectively. The research and development challenge has involved the identification of other commercially available and proven milling equipment that can mechanically liberate the metals and also stand up to the extreme abrasiveness of the slag material. Three potential grinding technologies have been identified, and slag samples have been shipped to domestic and foreign facilities for testing. Of the three alternatives, the most promising appears to be high pressure grinding rolls (HPGR), a very robust and efficient grinding system that is commonly used on hard and abrasive material. Two tons of slag has now been crushed and ground at a large, third party plant. The Company is analyzing the results of the mechanical performance of the HPGR system. Based upon initial analysis of the two independent engineers that observed and monitored the tests, the crushing system does not appear to suffer extreme wear, such as the Company has encountered with the crushing and grinding system currently installed at Clarkdale. The HPGR system also provided significant reduction of the ground particle size of the slag material. The original halide leach is currently being tested on samples of the HPGR-ground slag. The HPGR process could also eliminate similar equipment wear issues involved with developing feed for the other proposed parallel-path options.

  • Modified Halide Leach (Operational Focus). As the grinders in the process plant were not producing a product with sufficient mechanical liberation, alternate solutions were proposed utilizing existing plant and infrastructure at the Clarkdale facility. The most straightforward solution, with the least equipment alterations, involved modifying the leach chemistry to overcome the mechanical grinding deficiencies. To test this approach, 100 tons of Clarkdale slag were crushed, ground, and leached, resulting in approximately 50,000 gallons of pregnant leach solution ("PLS"). This lower pH chemistry successfully dissolved a portion of the contained precious and base metals into solution. The PLS contained an equivalent extracted gold grade of 0.1 to 0.2 ounces per ton (opt) of processed material. However, the more aggressive leach also dissolves significant quantities of silica and iron, creating significant challenges with the filtration and extraction processes. To deal with this challenge, the plant was subsequently retrofitted to add a solvent extraction (SX) unit to remove the silica and iron before metal recovery could be effectuated. Results to date have been mixed, and the effectiveness of the SX unit in the circuit is still being tested.

    An alternative method for extracting the gold from solution was also examined, involving direct precipitation and zinc precipitation. This resulted in the production of a low-grade doré metal containing gold, silver and copper. The technical team is currently analyzing the smelting and calculating results from the precipitation process.

  • Three-Stage Acidic Leach (Operational Focus). After analyzing all of the technical data generated from the above two processes, the Company's consulting metallurgists suggested tackling the iron and silica problem with a more direct approach. This approach used existing equipment at the Clarkdale facility and leveraged the experience gained by running a more acidic modified halide leach. The team is currently testing a three-stage leach. The first step in this process selectively and deliberately leaches only the iron and silica from the material. With the silica and iron removed, the filtered byproduct is then leached to extract the copper. The final step is designed to leach the precious metals. The Company is currently testing this approach, which is used on a commercial scale in the South African minerals processing industry, to determine its commercial viability.

  • Autoclave Process (R&D Focus). The research and development team has also explored other alternatives, in light of experience in running the plant, to assure that all high-potential processes are adequately evaluated. A promising alternative process involves autoclaving, a common process in the mining industry that involves adding substantial heat and pressure to the leaching process. Originally, this approach was considered less attractive, due to the higher capital costs associated with autoclaving.

    Thus far, the tests conducted under elevated temperature and pressure in a six-liter autoclave system, indicate an average recovered gold grade into solution of approximately 0.5 ounces per ton (opt). The autoclave tests have also shown a significant reduction in the iron and silica leached into solution, allowing the extraction process to be executed more efficiently. Initial testing further reveals that, due to added pressure, the grind may not be required to be as fine as with earlier procedures tested. These preliminary results may have positive implications for significantly reducing capital and operating costs associated with grinding, avoiding abrasive damage to equipment and improving the efficiency of the filtration process. Also, the potential higher recovered grades may offset the higher capital costs involved with autoclave systems.

    The Company has conducted testing of the autoclave process and developed a technical program to determine whether the autoclave process is a commercially scalable and economically viable alternative. Optimization of autoclave testing is currently underway prior to running a bulk sample through a larger continuous pilot autoclave system to determine the potential scale-up to a full-scale commercial system. If successful, this pilot testing would serve as the basis for a pre-design engineering study for a full-scale 2,000 ton-per-day commercial production facility. If the autoclave technology proves viable, its most common application in processing copper/gold ore would be to use it as a pre- or post-treatment to a chemical leach. The data and practical operating experience gained in all leach tests completed in the Clarkdale plant thus far may be directly applicable and will be part of the pre-design engineering study. Although the Company is at an early testing stage of this program, the off-the-shelf and commercially-proven nature of autoclave technology, coupled with the experience gained with chemical leach testing, may reduce the delays encountered with previous technical approaches.

Summary and Conclusions

"The Company has experienced difficulties based on the number and complexities of the technical challenges this unique project has encountered in proving its commercial feasibility," said Ian McNeil, Chief Executive Officer of Searchlight Minerals Corp. "However, management and the technical team remain committed and optimistic that the most economic solution will be identified in order to demonstrate commercial viability."

"To date, we have been focused on technical, management and operational changes in order to finalize the flow sheet and complete a feasibility study. In pursuing these goals, the Company recognizes that it must deploy its financial and other resources in the most effective manner possible. The preservation of cash and effective deployment of capital represents a high priority for management as we seek to achieve key strategic milestones in coming months."

"The Company is also committed to the completion of tests on the grinding, three-stage leach and autoclave technology as soon as practicable. Once the Company obtains the data from all this testing, the Company plans to make a decision on which technical path to proceed with based on the most efficient path to commercial feasibility. This will allow the Company to better define the most economical, effective and timely path to commercial feasibility," concluded McNeil.

About Searchlight Minerals Corp.

Searchlight Minerals Corp. is an exploration stage company engaged in the acquisition and exploration of mineral properties and slag reprocessing projects. The Company holds interests in two mineral projects: (i) the Clarkdale Slag Project, located in Clarkdale, Arizona, which is a reclamation project to recover precious and base metals from the reprocessing of slag produced from the smelting of copper ore mined at the United Verde Copper Mine in Jerome, Arizona; and (ii) the Searchlight Gold Project, which involves exploration for precious metals on mining claims near Searchlight, Nevada. The Clarkdale Slag Project is the more advanced of two ongoing projects that the Company is pursuing. The Searchlight Gold Project is an early-stage gold exploration endeavor on 3,200 acres located approximately 50 miles south of Las Vegas, Nevada.

Searchlight Minerals Corp. is headquartered in Henderson, Nevada, and its common stock is listed on the OTC Bulletin Board under the symbol "SRCH." Additional information is available on the Company's website at www.searchlightminerals.com and in the Company's filings with the U.S. Securities and Exchange Commission.

Forward-Looking Statements

This Press Release may contain, in addition to historical information, forward-looking statements. Statements in this Press Release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" in the Company's periodic filings with the Commission. When used in this Press Release in discussing the recent developments on the Project, including, without limitation, the resolution of certain issues relating to the operation of the production module, the words such as "believe," "could," "may," "expect" and similar expressions are forward-looking statements. The risk factors that could cause actual results to differ from these forward-looking statements include, but are not restricted to technical issues on the Project that may affect the production module and its primary process components, challenges in moving from pilot plant scale to production scale, the risk that actual recoveries of base and precious metals or other minerals re-processed from the slag material at the Clarkdale site will not be economically feasible, uncertainty of estimates of mineralized material, operational risk, the Company's limited operating history, uncertainties about the availability of additional financing, geological or mechanical difficulties affecting the Company's planned mineral recovery programs, the risk that actual capital costs, operating costs and economic returns may differ significantly from the Company's estimates, uncertainty whether the results from the Company's feasibility studies and the results from the operation of the production module are not sufficiently positive for the Company to proceed with the construction of its processing facility, operational risk, the impact of governmental and environmental regulation, financial risk, currency risk volatility in the prices of precious metals and other statements that are not historical facts as disclosed under the heading "Risk Factors" in the Company's periodic filings with securities regulators in the United States. Consequently, risk factors including, but not limited to the aforementioned, may result in significant delays to the projected or anticipated production target dates.

Contact Information

  • Contact Information:

    RJ Falkner & Company, Inc.
    Investor Relations Counsel
    (800) 377-9893
    Email Contact