May/June 2013 - The ASIA Miner

Thailand
Positive PEA for Southeast Asia project
SOUTHEAST Asia Mining Corp has received a positive NI 43-101-compliant
preliminary economic assessment (PEA) for the historical operating
Song Toh and Boh Yai silver-lead-zinc deposits. It demonstrates
robust economics with manageable pre-production capital of US$12.6
million, strong operating cashflows and a payback of 1.5 years.
The company’s president and CEO Brian Jennings says, “The results
of the PEA are very encouraging. It is based on 22 years of historical
operating history which further enhances its reliability.” The
PEA was prepared by ACA Howe International Limited and the full results
of the study will be disclosed in a NI 43-101 Technical Report.
It shows an after-tax NPV for 100% of the project of US$69.5 million
and IRR of 112% at a 7.5% discount. The average annual EBITDA is
US$13.8 million. It has been calculated at an annual throughput of
300,000 tonnes with estimated life-of-mine of 13.6 years. Life-of-mine
production is estimated at 131,500 tonnes of lead concentrate and
128,318 tonnes of zinc concentrate.
Southeast Asia has a joint venture agreement whereby it has an option
to earn an 80% interest in the mining lease applications, flotation
plant and equipment. The PEA is prepared for 100% of the project
revenues and expenditures. The assessment includes inferred 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.
The project comprises two historical operating underground mining
operations, Song Toh and Boh Yai, which were operated by
Cominco in 1948, by the German company Metalgesellschaft from
1969 to 1991, and subsequently by private Thai company Kemco
until 2002 when they were closed due to depressed metal prices.
Historically the mines processed about 5.4 million tonnes producing
520,000 tonnes of lead and zinc concentrates at the 1000
tonne/day flotation plant at Song Toh. The plant was refurbished in
2008 by Southeast Asia and its JV partner when about 60,000 tonnes
of ore was processed.
The PEA assumes mined material will be processed at the existing
flotation plant. It is assumed the mining operations and processing
will be carried out using the same methods employed in 2002 when
the plant ceased operations due to low metal prices. The mine development
of Song Toh and Boh Yai is based on existing resources
which are optimized in the early years of production.
The deposits remain open along strike and to depth providing future
potential to significantly increase the size of the resource and further
enhance the economics of an already robust economic model. Exploration
to date, including soil geochemistry and geophysical results,
indicate that substantial potential exists for additional discoveries.
New mineralization identified at Chatree
NEW drilling at the Q Prospect has intersected broad zones of significant gold mineralization
from surface within the mining lease at Kingsgate Consolidated’s Chatree
Gold Project in central Thailand. The promising RC drilling results, which include 24
metres from surface @ 5.6 grams/tonne gold, including 8 metres from 14 metres @
11.3 grams/tonne, and 34 metres from surface @ 1.7 grams tonne, follow the recent
identification of new mineralization at the A Pit.
The drilling at Q Prospect, which is immediately the north of A Pit, began in the
middle of January and is part of Kingsgate’s overall strategic drilling program aimed
at increasing resources and reserves within the mining leases at Chatree. The new
results follow closely behind the initial program that was focused on increasing resources
at the A Pit.
The A Pit results include an intersection of 49.4 metres from 227 metres @ 4.3
grams/tonne, including a high-grade interval of 29.8 metres from 246 metres @ 6.25
grams/tonne. Other highlights include 15.0 metres from 197 metres @ 4.34
grams/tonne; 4.1 metres from 275 metres @ 39.3 grams/tonne; 11.0 metres from
201 metres @ 3.65 grams/tonne; and 9.0 metres from 89 metres @ 4.2 grams/tonne.
The mineralization confirms the continuation of the A East structure north of the existing
pit and current resource model.
Encouraged by the results at both A Pit and Q Prospect, exploration will be intensified
with additional drill rigs employed to test areas of mineralization adjacent to historical
open pits which were previously explored and exploited at significantly lower
gold prices. Consequently the mineralization remains open below the majority of Chatree’s
current and historical pits.
Kingsgate’s managing director and CEO Gavin Thomas says, “The discovery of new
high-grade gold mineralization at Q Prospect and at A Pit continues to support our
broader view of the prospectivity that remains within the mining leases at Chatree.
An aerial view of the Chatree Gold Project.
36 | ASIA Miner | May/June 2013