Xtierra Reports Second Quarter Results
01 August 2014 - 5:51AM
Marketwired Canada
Xtierra Inc. (TSX VENTURE:XAG) ("Xtierra" or the "Company") announces that it
has now published and filed its unaudited interim financial report for the three
and six month periods ended June 30, 2014 together with its Management's
Discussion and Analysis for the same period. These documents are available on
the Company's website at www.xtierra.ca and on SEDAR under the Company's profile
at www.sedar.com.
For the six month period ended June 30, 2014, the Company recorded a loss of
$108,000 ($0.001 per share), a gain of $132,000 arising on a reduction in the
fair value of the convertible notes liability.
At June 30, 2014, the Company held $220,000 in cash and cash equivalents. In
April 2014 the Company secured further advances of $250,000 from its major
shareholders to fund its working capital for the remainder of 2014.
At June 30, 2014, the Company had not achieved profitable operations, had an
accumulated deficit since inception and expects to incur further losses in the
development of its business. The continuing operations of the Company are
dependent upon its ability to raise adequate financing for working capital,
pre-feasibility and feasibility studies, and in the longer term to build the
proposed mine at Bilbao.
On July 28, 2014, the Company announced that it had initiated a strategic review
to consider alternatives in relation to its Bilbao Silver-Zinc-Lead Project (the
"Bilbao Project") in Zacatecas, Mexico and has retained Jennings Capital Inc. to
assist in the strategic review process.
Strategic alternatives include, but are not limited to, financing structures for
the development of the Bilbao Project, the sale of all or a portion of the
Company's interest in the Bilbao Project or a corporate transaction.
There are no assurances that the process will result in a transaction or, if a
transaction is undertaken, as to the commercial terms or timing of such a
transaction.
The following clarifies and corrects summary disclosure concerning the Bilbao
Project which appeared in the Company's July 28th and April 28, 2014 news
releases and prior disclosure.
The Bilbao Project
The Bilbao Project is a polymetallic sulphide and oxide replacement
silver-zinc-lead-copper deposit located approximately 500km northwest of Mexico
City in the southeastern part of the State of Zacatecas.
On April 28, 2014 the Company announced that it had received an updated National
Instrument 43-101 ("NI 43-101") compliant resource estimate and a Preliminary
Economic Assessment (PEA) on the Bilbao Project, both prepared by
RungePincockMinarco (Canada) Limited (RPM). The PEA is preliminary in nature in
that it includes in part inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves. Mineral resources
that are not mineral reserves do not have demonstrated economic viability. There
is no certainty that the results projected by the PEA will be realized with
further work and actual results may vary substantially. Because inferred
resources are speculative, the modifying factors that are applied to assess the
potential economic viability of the project are also speculative.
As previously reported, a new Zn/Pb/Ag/Cu resource estimation of the Bilbao
deposit was prepared by RPM to incorporate new drilling information acquired
during 2011-2013. This resource estimation, included in the PEA, by mineral type
at 3% Zn equivalent cut-off, excluding approximately 1 million tonnes of
previously mined out ore, is shown in the following tables:
Indicated Resource
----------------------------------------------------------------------------
Zn equiv. Ag
Mineralization Type (%) Tonnes Zn % Pb % (ppm) Cu %
----------------------------------------------------------------------------
Oxide 6.69 791,082 1.73 2.53 39 0.18
----------------------------------------------------------------------------
Mixed 7.93 778,336 2.52 2.48 51 0.21
----------------------------------------------------------------------------
Sulphide 7.56 4,555,809 2.38 1.57 72 0.18
----------------------------------------------------------------------------
Total 7.50 6,125,227 2.31 1.81 65 0.19
----------------------------------------------------------------------------
Inferred Resource
----------------------------------------------------------------------------
Zn equiv. Ag
Mineralization Type (%) Tonnes Zn % Pb % (ppm) Cu %
----------------------------------------------------------------------------
Oxide 6.38 3,069,852 1.69 2.23 42 0.16
----------------------------------------------------------------------------
Mixed 4.43 238,923 0.59 1.13 55 0.11
----------------------------------------------------------------------------
Sulphide 4.31 1,201,032 0.67 0.77 60 0.11
----------------------------------------------------------------------------
Total 5.73 4,509,537 1.36 1.78 47 0.15
----------------------------------------------------------------------------
A previous resource estimation was originally carried out by Richard Parker
Consulting Geologist in 2011 and included 84 drill holes. The resources reported
in 2011 (including both oxide and sulphide) were 10,617,891 tonnes @ 6.48% Zn
equiv. in the Indicated category and 430,000 tonnes @ 5.19% Zn equiv. in the
Inferred category. (Technical Report dated April, 2011 entitled "Geology and
revised Minerals resources of the Bilbao Silver-Lead-Zinc Deposit - State of
Zacatecas, Mexico" by RTG Parker, Consulting Geologist).
For the purposes of the PEA, RPM has estimated that approximately 5.2 million
tonnes grading 2.10% Zn, 1.40% Pb and 63.96 grams Ag per tonne of the indicated
and inferred underground sulphide resources are potentially mineable. The tonnes
and grade include an average dilution of 10 percent, at zero grade, as well as
mining losses of 5%. The RPM PEA relies on indicated mineral resources as well
as inferred mineral resources. The economic analysis in the PEA completed by RPM
for a 720,000 tonne per year processing plant capacity and is based on this
potentially mineable tonnage. Mineral resources that are not mineral reserves do
not have demonstrated economic viability. There is no certainty that the results
projected by the PEA will be realized with further work and actual results may
vary substantially. Because inferred resources are speculative, the modifying
factors that are applied to assess the potential economic viability of the
project are also speculative.
RPM's recommendations contained in the PEA identified various opportunities to
increase the potentially mineable portion of the indicated and inferred sulphide
resource and reduce operating costs through additional exploration and
engineering to improve the overall economics of the Bilbao Project.
Recommendations included:
-- Additional definition drilling targeted at the Bilbao transition and
sulphide zones could lead to re-classification of inferred resources to
indicated resources, potentially adding to the potentially mineable
portion of the current indicated resource;
-- The potential to increase level spacing and correspondingly reduce level
development, through use of cable bolts, may lead to lower mine
development costs;
-- Further analysis of hydraulic and sand backfilling options, in terms of
preparation and distribution, may further reduce overall operating
costs;
-- There may also be opportunity to reduce operating costs significantly
(approx. US$5/t to US$6/t) by reducing the number of stopes filled with
backfill;
-- Potential also exists for deferral of ramp and associated development;
-- Inclusion of transition zone material in the mine plan should be
investigated (requiring additional metallurgical testwork) to extend the
life of mine and/or potentially increase the mining rate per year;
-- Further optimization of stope sequencing could lead to improved cash
flow; and
-- Exploration drilling at the Bilbao 2 area, approximately 1.5 km south of
Bilbao, has potential to offer additional mineral resources to the
project due to the fact that current trenching, sampling and resulting
soil geochemistry information identifies similarities between the two
areas. An additional source of feed to the designed plant could lengthen
the overall life of the mine, increase the daily production rate, or
result in a combination of the two, improving the NPV and IRR of the
project.
The PEA is set out in a technical report, prepared in accordance with NI 43-101,
was filed on April 28, 2014 under the Company's profile on SEDAR at
www.sedar.com.
Qualified Person
Scientific and technical information disclosed in this press release was
prepared by or under the supervision of and approved by Gerald J. Gauthier,
P.Eng., the President and Chief Operating Officer of the Company and a
'qualified person' within the meaning of NI 43-101.
About Xtierra Inc.
Xtierra Inc. is a Toronto based exploration and development company listed on
the TSX Venture Exchange. Xtierra's shares trade under the symbol "XAG". Xtierra
has 115,370,336 shares issued and outstanding.
Xtierra is currently evaluating the development of its Bilbao Silver-Zinc-Lead
Project, located in the Central Mexican Silver Belt in the State of Zacatecas.
Cautionary Notes:
This press release may contain "forward looking information" within the meaning
of applicable Canadian securities legislation. The TSX Venture Exchange has not
reviewed and does not accept responsibility for the adequacy or accuracy of the
content of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Xtierra Inc.
Gerald Gauthier
President & Chief Operating Officer
+1 (647) 728-4131
Xtierra Inc.
Tim Gallagher
Director
+1 (416) 925-0090
Jennings Capital Inc.
Brian Imrie
Senior Managing Director, Head of Investment Banking
+1 (416) 304-2174
Jennings Capital Inc.
Marc Mills
Vice President, Investment Banking
+1 (416) 304-2189
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