THE ZARUMA GOLD PROJECT
(see PRODUCTION PLANT PROGRESS)
Key Highlights:
- Measured and Indicated Gold resource of 1,110,200 oz at an average grade of 13.93 g/t*
- Inferred Gold resource of 1,383,400 oz at an average grade of 12.72 g/t*
- Previous exploration on the field includes over 100,000 channel samples, 15,000 metres of drilling and over 1,705 line kms of aeromagnetic data
- Historic production estimated to be 5 million oz of Gold at and 12 million oz of Silver
- A favourable preliminary assessment report was completed in August of 2006
|
The Zaruma-Portovelo Mining District is a major, high-grade goldfield, having produced over 5,000,000 ozs of gold in the past. Modern mining was initiated in 1905, when the South American Development Company developed the Portovelo mine, and ended in the 1950s. Dynasty has been able to reassemble most of the concessions that made up the original goldfield.
Production records of SADCO indicate average individual values of 7.5 g/t to 28.7 g/t gold over average widths ranging from 0.77m to 2.14m for gold veins in the district. Individual veins production ranged from 9,000 tonnes to 1,573,000 tonnes with gold recoveries ranging from 8,000 ounces to 770,000 ounces. It is now believed that the veins extend over a 15 km north-south trend and a width of 5 km east-west.
Historical work compiled by IAMGOLD Ecuador S.A. ("IAMGOLD") includes over 100,000 channel sample data points, 41,643 m of underground drift mapping, approximately 15,000 m of diamond core drilling and 5,412 soil samples. The Company acquired the data compiled by IAMGOLD as part of its purchase of the concessions.
Estimates of mineral resources of the Zaruma Gold Field, which comprises the Zaruma property and the associated Portovelo district, are contained in two reports: dated October 22, 2004, prepared by Miroslav Kalinaj MSc; and dated October 21, 2005, prepared by Allen J. Maynard BappSc, MAIG, MAusIMM, both of whom are independent "Qualified Persons", as determined by NI 43-101. These estimates are summarized in the following table:
TOTAL MINERAL RESOURCES CONTAINED IN ZARUMA PROJECT
(INCLUDING THE PORTOVELO AREA)
| Category |
Tonnes |
Au g/t |
Au Ounces |
| Measured |
1,568,000 |
13.93 |
702,100 |
| Indicated |
915,000 |
13.87 |
408,100 |
| Inferred |
3,382,000 |
12.72 |
1,383,400 |
In August of 2006 an Independent Preliminary Assessment Report was prepared for Dynasty by W J Holly MAustIMM FFin and A J Maynard MAIG MAusIMM. The report concluded that the project had a favourable economic outlook and recommended further scoping studies. The main financial figures estimated by the study were as follows:
- Cash flow before taxes and after royalty (undiscounted)
- gold price used
- estimated mine life over two stages
- total mineable resources
- total metals recovered
- total direct capital costs
- cash operating cost per ounce
|
US$467,000,000
Gold - US$500/oz
14.5 years (2)
4,084,700 tonnes
1,534,305 oz gold
US$25,000,000
US$181
|
|
(2)
|
The Company has estimated that the initial life of the mine could be extended from 10.5 years by an additional 6.75 years if it can successfully convert 50% of the project's inferred resources into mineable resources after additional exploration work is completed.
|
As required by NI 43-101, it should be noted that the foregoing estimates are based, in part, upon estimates of resources that include 1,383,400oz gold classified as "inferred resources". Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. As such, there is no certainty that the estimates contained in the Holly/Maynard Zaruma Report will be realized.
 Gold Vein Map
|
 Dynasty Concessions
|
 Tamayo Vein Stope
Ore Shoot Extensions
|
 Underground vein photo
|
 High Grade Gold Veins
Including Proposed Declines I
|
 High Grade Gold Veins
Including Proposed Declines II
|
Management believes that the Zaruma property has significant potential to define gold-silver resources within the existing workings and through the discovery of new veins. Current focus in exploration is directed to the development of down-dip extensions of known bonanza ore shoots, discovery of new, parallel high-grade ore shoots and the identification, by mapping and trenching programs, of new veins to the north, east and west of known veins in order to advance the project to production status.
The technical information relating to the Zaruma property was disclosed by the Company in news releases which are available for review on the SEDAR website at www.sedar.com under "Dynasty Metals and Mining Inc."
|
Overview
Zaruma
)
)
)
)
)
)
