Yellowhead Mining Updates Mineral Resource Estimate for Harper Creek Project
14 February 2012 - 10:45PM
PR Newswire (Canada)
M&I tonnage increases 53% and Contained Copper Increases 47%
TSX-V:YMI VANCOUVER, Feb. 16, 2012 /CNW/ - Yellowhead Mining Inc.
is pleased to announce the results of an updated National
Instrument 43-101-compliant resource estimate as of December 20,
2011 for its Harper Creek Project north of Kamloops, British
Columbia. The updated resource includes drilling conducted in 2011
in support of the Feasibility Study, scheduled for completion by
March 31, 2012. A total 10,843 metres were drilled in
37 holes. At a 0.2% copper cut-off grade ("COG"), total
measured and indicated ("M&I") resource is estimated at 815
million tonnes grading 0.29% copper and containing 5.26 billion
pounds of copper, an increase of 1.67 billion pounds of copper over
the prior Preliminary Economic Assessment (PEA) estimate. A
significant part of the increase in M&I is a result of drilling
that has expanded the resource at depth and to the north. Infill
drilling has also improved the confidence in the resource and
allowed the reclassification of 40 million tonnes of Inferred
material at a 0.2% copper COG. A tabulation of mineral resource by
category follows at the end of the news release. Ian Smith,
President & CEO of Yellowhead, stated, "This resource update
confirms our belief that the Harper Creek deposit holds significant
potential for expansion. Geophysical targets and geochemical
anomalies together with outcropping sulphides indicate that the
deposit remains open along strike for some 4km to the east, as well
as down dip to the north and at depth. We plan to continue
step out drilling to expand the existing resource and to identify
new deposits within our mineral tenures. We have also
observed that closing up the drill spacing yields an improvement in
grade for copper, gold and silver in the Measured category over the
PEA results. We believe that Harper Creek is one of the largest
independent copper development projects in( )Canada, capable of
producing a large, long-term supply of clean concentrates, with
exceptional infrastructure and a favourable political
climate. The planned production rate of 25.55Mt/year milled
would currently make Harper Creek Canada's second largest open pit
copper mine." Harper Creek Mineral Resource Estimate Methodology
Block model grade estimation for copper, gold and silver was
carried out by the inverse distance squared method using 6 metre
downhole drill composites. High grades were capped prior to
compositing at levels of 5% Cu, 1 g/t Au and 30 g/t Ag. Block
model dimensions were 12 by 12 by 12 metres. Grade estimation
was constrained by a combination of geologic, structural and grade
shell wireframes. Bulk density was assigned by lithology
based on data from 10,739 density measurements on drill core.
Classified blocks were constrained by an optimized pit shell using
a Cu price of $3.00/lb. Combined processing and General &
Administrative costs were set at $6.02/tonne. Ore and waste
mining costs were $1.40/tonne with a bench increment of
$0.025/tonne. Pit slopes on the north, east and west sides
were set at 42° and slopes to the south were 32°. The selected base
case cut-off grade of 0.2 % Cu is considered consistent with other
mineral deposits of similar characteristics, scale and location.
The effective date of the estimate is December 20, 2011. Measured
Indicated COG Cu Au Ag Cu Cu Au Ag Cu %Cu Ktonnes % g/t g/t billion
Ktonnes % g/t g/t billion # # 0.1 590,790 0.24 0.028 1.1 3.13
928,207 0.22 0.026 1.1 4.50 0.2 348,515 0.31 0.034 1.3 2.38 466,482
0.28 0.030 1.3 2.88 0.3 149,694 0.39 0.044 1.5 1.29 144,943 0.38
0.040 1.5 1.21 0.4 56,753 0.48 0.056 1.7 0.60 44,638 0.47 0.051 1.7
0.46 0.5 18,925 0.58 0.074 2.0 0.24 11,687 0.57 0.065 1.9 0.15
Measured + Indicated Inferred COG Cu Au Ag Cu Cu Au Ag Cu % Ktonnes
% g/t g/t billion Ktonnes % g/t g/t billion Cu # # 0.1 1,518,997
0.23 0.027 1.1 7.63 155,251 0.22 0.027 1.1 0.75 0.2 814,997 0.29
0.032 1.3 5.26 80,169 0.30 0.033 1.4 0.53 0.3 294,637 0.39 0.042
1.5 2.50 31,635 0.39 0.037 1.5 0.27 0.4 101,391 0.48 0.054 1.7 1.06
11,360 0.47 0.044 1.8 0.12 0.5 30,612 0.58 0.071 2.0 0.39 3,017
0.57 0.054 2.0 0.04 Sample Collection, Analysis and QA/QC Core was
cut by electric rock saw with half core shipped to the ALS Group
for sample preparation and analysis. Drill core samples were
analyzed for multi-elements by total digestion ICP-ES and for gold
by fire assay with an AA finish. Core samples returning greater
than 2,000 ppm copper in the ICP-ES process were then assayed for
copper. Key elements of Yellowhead's QA/QC program include
chain of custody of samples, regular insertion of certified
reference standards and blanks, and duplicate check assays.
Independent laboratory checks were performed by Acme Analytical
Laboratories Ltd. Qualified Person The mineral resource estimate
reported herein was prepared by independent consultant Ron Simpson,
P. Geo, President of Geosim Services Inc., an independent
"Qualified Person" under National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101"). About Yellowhead
Mining Inc. and the Harper Creek Project The Harper Creek Project
is a copper-gold-silver volcanogenic sulphide deposit with a
Measured and Indicated Resource of 815 million tonnes grading 0.29%
Cu (5.26 billion pounds of copper) plus 0.032 g/t gold and 1.3 g/t
silver, plus an Inferred Resource of 80.2 million tonnes grading
0.30% Cu (0.53 billion pounds of copper). The Harper Creek Project
is located in south-central British Columbia, approximately 150
kilometers by highway north of Kamloops. Yellowhead has a
100% interest in the Harper Creek development project((1)). A
Preliminary Economic Assessment Report ("PEA"), which demonstrated
the technical and economic viability of the Project, was completed
at the end of March 2011 and filed on SEDAR on April 1, 2011 and
can be viewed on www.sedar.com. The PEA demonstrated a 22 year
project life based on a Measured & Indicated resource of 532
million tonnes at a grade of 0.31%, a milling rate of 70,000 tonnes
per day, producing 149 million lbs. copper in concentrate per year
for years one to eight, (132Mlb/year life-of-mine), a life-of-mine
stripping ratio 0.88:1, a pre-tax IRR of 19.8% with a base case
copper price of US$2.66/lb., an NPV8 of US$598 million and a
capital cost of C$759 million in Q4 2010 dollars, including
contingency, with a 4 year payback((2)). (1) (Subject to the
payment of a 3% NSR royalty capped at $2.5 million, adjusted for
inflation and an additional 2.5% NSR royalty on an estimated 3.3
million tonnes of ore which is expected to be mined beginning in
year nine within the NI 43-101 resource.) (2) Mineral resources are
not mineral reserves and do not have demonstrated economic
viability. FORWARD-LOOKING STATEMENTS AND CAUTIONARY DISCLAIMER
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities laws. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those anticipated in the forward-looking
statements, including, among others, the accuracy of mineral grades
and related assumptions, inherent operating risks, planned
expenditures, proposed exploration and development at the Harper
Creek Project, operating and economic aspects of the Harper Creek
Project, as well as those risk factors identified in the Company's
Annual Information Form filed under the Company's SEDAR profile.
Yellowhead undertakes no obligation to update forward-looking
information if circumstances or management's estimates or opinions
should change except as required by law. The reader is cautioned
not to place undue reliance on forward-looking statements. More
detailed information about potential factors that could affect
financial results is included in the documents filed from time to
time with the Canadian securities regulatory authorities by
Yellowhead. This news release may include disclosure of scientific
and technical information, as well as information in relation to
the calculation of resources, with respect to the Harper Creek
Project. Yellowhead's disclosure of mineral resource information is
governed by National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101") under the guidelines set out in
the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") Standards on Mineral Resources and Mineral Reserves, adopted
by the CIM Council, as may be amended from time to time by the CIM
("CIM Standards"). There can be no assurance that mineral resources
will ultimately be converted into mineral reserves. Mineral
resources are not mineral reserves and do not have demonstrated
economic viability. This news release uses the terms "measured",
"indicated" and "inferred" resources. U.S. persons are advised that
while such terms are recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not
recognize them. "Inferred Resources" have a great amount of
uncertainty as to their existence and as to their economic and
legal feasibility. It cannot be assumed that all or any part of an
inferred resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred resources may not form the
basis of feasibility or other economic studies. U.S. persons are
cautioned not to assume that all or any part of measured or
indicated resources will ever be converted into reserves. U.S.
persons are also cautioned not to assume that all or any part of an
inferred mineral resource exists, or is economically or legally
mineable. Neither the TSX Venture Exchange Inc. nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. Yellowhead Mining Inc. CONTACT:
Ronald Handford, Executive Vice President, Corporate
DevelopmentDirect: 604.681.1709 ext. 204Email:
rhandford@yellowheadmining.comEmail:
info@yellowheadmining.comWebsite: www.yellowheadmining.comTwitter:
http://twitter.com/YMI_Mining
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