Cieneguita Preliminary Economic Assessment (PEA) on track for Q2 completion
Approximately 1,600 kgs of core samples are being used to generate several metallurgical composite samples at Resource Development Inc., lab of Denver, Colorado. These composites will undergo a rigorous metallurgical testing program focusing on the optimization of concentrate flotation characteristics. Initial results should be available by mid-February. Hydrogeological and water supply investigations are currently underway with geotechnical studies related to the siting of various project components starting later this month. Environmental baseline studies are also underway.
Following the definition of the most appropriate metallurgical process option the optimal processing rate will be defined and capital and operating costs estimated. Concurrent with this work an updated mineral resource will be generated as well as a mining schedule. It is anticipated that the results of the PEA will be available in the late second quarter of 2012.
The Cieneguita project hosts a NI43-101 compliant resource estimate above a 0.8 gram per tonne gold equivalent cut-off grade (using prices of $950/oz gold and $14.50/oz silver) of 20.1 million tonnes (measured + indicated) containing 474,900 ounces gold and 33.5 million ounces silver as defined in the company's technical report as filed on SEDAR on October 22, 2010.
Under a restructured joint venture agreement with Minera Rio Tinto (MRT) announced September 29, 2011, the Company is to receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. Following December 31, 2012, the Company retains a 100% interest in the property from which its joint venture partner MRT has the right to earn 20% by contributing on a pro-rata basis to the development of a larger operation, which is the subject of the ongoing PEA. Production for the month of December 2011 averaged 413 tonnes per day with a total of about 609 ounces gold and 24,000 ounces silver reporting to the bulk sulfide concentrate.
About Pan American Goldfields
Pan American Goldfields is a precious metal producer and exploration company. It is a specialist in exploration, mine development and production in Mexico's booming Sierra Madre Gold-Silver Belt. The company's most advanced project is its now producing Cieneguita gold-silver mine where a preliminary economic assessment is underway. In addition, it holds the Cerro Delta project in Argentina, where it is exploring for large gold and copper-gold mineralization in the Maricunga Gold Belt in Argentina, across from a number of world-class projects in Chile. The Company continues to assess other high impact opportunities.
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