Troy Resources NL
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TSX : TRY

Troy Resources NL

May 08, 2009 03:21 ET

Troy Completes Acquisition of the Casposo Gold-Silver Deposit From Intrepid Mines Ltd

PERTH, WESTERN AUSTRALIA--(Marketwire - May 7, 2009) - Troy Resources NL ("Troy") (TSX:TRY)(ASX:TRY) -

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Highlights

- Troy has completed the acquisition of the Casposo gold-silver deposit in San Juan province of Argentina from Intrepid Mines Ltd ("Intrepid").

- The acquisition price of US$20 million was paid on closing with US$2 million remaining to be paid on the 6th month anniversary of first production. Troy has funded the acquisition from cash reserves.

- Troy has commenced looking at the potential to fast track the mine development utilising the gold plant it holds in storage in New South Wales, Australia.

- As part of the Casposo deal Troy has secured an experienced local exploration team and acquired a portfolio of extensional, "brownfields" and regional exploration targets.

Troy announces it has completed the acquisition of Intrepid Mining's 100% interest in the Casposo deposit in San Juan Province in Argentina (see Figure #1). Troy has funded the acquisition entirely out of cash reserves.

Troy's Executive Director, Ken Nilsson, who has been responsible for all of Troy's mine developments, has taken responsibility for the development of the Casposo deposit into a producing mine. The team of employees based in Argentina who work on the Casposo project have transferred with the acquisition and are now employees of the Troy Resources group.

Commenting on the closing of the transaction, Troy CEO Paul Benson said: "We are very pleased we have closed the transaction to acquire Casposo. Our focus now will be to develop a new fast track and low capital cost plan for the development of the deposit. We expect to be able to update the market on the new development plan in the September quarter. This is an important milestone for Troy. We are entering a new phase of growth which will lift Troy's annual gold production above 100,000 ounces of gold per annum."

Troy has a track record of building mines quickly, efficiently and at low cost, and this will be Troy's third mine in South America. In 2002 Troy's acquired its first mine, Sertao, as an in-situ resource and quickly sourced an appropriately sized second-hand plant in Australia that was refurbished and transported to Brazil. In addition, Troy completed an infill drilling program which increased reserves whilst awaiting shipping. Time from acquisition to first production was just 14 months with an initial capital of just US$8m. Plant construction including earth works took approximately 6 months.

Andorinhas, Troy's second Brazilian operation, was acquired as an in-situ resource in November 2006 and was developed by relocating the mill and plant from Sertao. As additional milling capacity was required, a second-hand mill was sourced from Western Australia. Following the acquisition Troy converted the resource to reserve status, constructed the processing facility and developed the open cut mine and poured first gold in March of 2008. Sixteen months from acquisition to first production with an initial capital cost of just US$16m. In mid 2007, Troy commenced development of the high grade Mamao underground mine which is now ramping up to full production.

With Casposo, Troy will look to similarly fast track development to bring it into production as quickly as possible. If Troy is able to utilise some or all of the gold plant it has in storage in Cobar, New South Wales, Troy anticipates that that would lower the capital cost and time of the mine development.

To view the Casposo Project Location map please click on the following link: http://media3.marketwire.com/docs/try58f1.pdf

Casposo is a typical Low Sulphidation epithermal style gold-silver deposit where mineralisation is hosted within rhyolite breccias and andesite. Veins are typically banded quartz-chalcedony colloform - crustiform banded with quartz - carbonate infill. Mineralisation is associated with an assemblage consisting of quartz, chalcedony, adularia, calcite, illite, sericite and trace sulphides. Gold and silver occur as electrum, native silver, sulfosalts and silver sulphides.

Mineralisation at Casposo occurs along a 10 kilometre long west-northwest-east-southeast (N60 degrees W) regional structural corridor, with the main Kamila Vein system forming a sigmoidal set 500 metres long near the centre The main structural corridor consists of 2 parallel veins sets dipping to the southwest at -60 degrees to -65 degrees (B Vein & Inca Veins). A secondary mineralised trend comprises multiple north-south striking sigmoidal structures that dip to the west at -65 degrees (Aztec, AF, B North & MV1 - Mercado Veins). Ore shoots are typically lenticular bodies up to 200 metres in length and up to 15 metres wide.

Work completed included surface sampling and geological mapping, trenching and pitting, detailed trench sampling of the vein systems, reverse circulation and diamond core drilling, an airborne magnetic survey, ground gradient-array induced polarization (IP) and pole-dipole IP surveys as well as bulk sampling for metallurgical studies. A feasibility study, commissioned in 2005, was competed by Intrepid in March, 2007.

The latest Casposo Resource estimate was completed in July 2008 by AMEC International Chile. Open pit resources were contained within a Whittle pit shell using a gold price of US$760/oz. Resources below this were classified as underground resources with a cut-off grade of 3.5g/t Au-eq. Grade interpolation techniques were inverse distance weighted.

Surface mapping and sampling completed to date has identified a number of outcropping gold bearing vein systems on the Casposo tenements that require drilling. In addition, Troy has acquired a portfolio of regional exploration targets within the Casposo region that warrant additional exploration. All of these extensional, "brownfields" and regional targets will be reviewed in the near future and so that an exploration program to drill test the best can be developed.



Table #1 Casposo Resources and Reserves

----------------------------------------------------------------------------
CASPOSO MINERAL RESOURCES
----------------------------------------------------------------------------
Gold Silver Gold Gold
grade grade equivalent Gold Silver equivalent
Tonnes (g/t) (g/t) grade (g/t) Ounces Ounces ounces
----------------------------------------------------------------------------
Open pit
Indicated 1,882,400 5.39 130 7.05 326,000 7,854,100 426,900
Inferred 15,800 5.61 137 7.38 2,800 69,900 3,700
----------------------------------------------------------------------------
Underground
Indicated 193,800 1.97 196 4.49 12,200 1,223,200 28,000
Inferred 8,800 2.43 294 6.21 700 83,000 1,700
----------------------------------------------------------------------------

----------------------------------------------------------------------------
TOTAL
Indicated 2,076,200 5.07 136 6.81 338,200 9,077,300 454,900
Inferred 24,600 4.47 193 6.96 3,500 152,900 5,400
----------------------------------------------------------------------------
Open pit
Probable 1,399,000 5.44 96.05 6.80 244,600 4,320,300 305,900
----------------------------------------------------------------------------
Underground
Probable 335,000 3.99 220.5 7.11 43,000 2,375,200 76,600
----------------------------------------------------------------------------

----------------------------------------------------------------------------
TOTAL
Probable 1,734,000 5.16 120.1 6.86 287,600 6,695,500 382,500
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Notes:

1. Mineral Resources are estimated using a US$760/oz gold price and US$13/oz
silver price. An economic function that includes operating costs,
metallurgical recoveries and royalty costs has been applied.
2. Rounding as required by reporting guidelines may result in apparent
differences between tonnes, grade and contained metal content.
3. Tonnage and grade measurements are in metric units. Gold ounces are
reported as troy ounces.
4. All Mineral Reserves are reported in the Probable category.
5. Mineral Reserves are estimated using a gold price of US$690/oz and
US11.80/oz silver price and an economic function that includes operating
costs, metallurgical recoveries and royalty costs.
6. Cut-off grades for Mineral Resources were 1.41g/t gold equivalent for
open pit and 3.5g/t gold equivalent for underground. Gold equivalent
grades for Mineral Resources were based on metal prices of US$760/oz gold
and US$13/oz silver and processing recoveries of 93.7% for gold and 80.6%
for silver.
7. Cut-off grades for Mineral Reserves were 1.56g/t gold equivalent for open
pit and 3.5g/t gold equivalent for underground. Gold equivalent grades
for Mineral Reserves were based on metal prices of US$690/oz gold and
US$11.8/oz silver and processing recoveries of 93.7% for gold and 80.6%
for silver.
8. The information regarding Mineral Resources and Mineral Reserves is drawn
from the technical report entitled "NI 43-101 Technical Report, Intrepid
Mines Limited, Casposo Project - July 2008" that was filed on September
16th 2008 by Intrepid under its profile on SEDAR at www.sedar.com.


Information of a scientific or technical nature in this news release was prepared under the supervision of Peter J. Doyle, Vice President Exploration and Business Development of Troy, a "qualified person" under National Instrument 43-101 - "Standards of Disclosure for Mineral Projects", and a member of the Australasian Institute of Mining and Metallurgy. Mr. Doyle has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration, and to the activity he is undertaking, to qualify as a "competent person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Doyle has reviewed and approved the information contained in this report. For further information regarding the project, including a description of the quality assurance program, quality control measures, the geology, samples collected and testing procedures in respect of the project please refer to the technical report entitled "NI 43-101 Technical Report, Intrepid Mines Limited, Casposo Project - July 2008" that was filed on SEDAR on September 16th 2008 by Intrepid Mines Limited and which is available under Intrepid's profile at www.sedar.com.

This news release contains forward-looking statements including those relating to Troy's plans to develop a mine at Casposo. These forward-looking statements reflect management's current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. A number of factors could cause actual results, performance, or achievements to differ materially from the results expressed or implied in the forward looking statements. Such factors include, among others, future prices of gold, the actual results of current production, development and/or exploration activities, changes in project parameters as plans continue to be refined, variations in ore grade or recovery rates, plant and/or equipment failure, delays in obtaining governmental approvals or in the commencement of operations and changes in construction costs.

ABN 33 006 243 750

Contact Information

  • Troy Resources NL
    Paul Benson
    Chief Executive Officer
    +61 8 9481 1277
    or
    Troy Resources NL
    John Dow
    Chairman
    +61 8 9481 1277
    +61 8 9321 8237 (FAX)
    troy@troyres.com.au
    www.try.com.au