Pulacayo Project Feasibility Study - Apogee Silver

Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report
090644-3-0000-20-IFI-100
14.3.2 Data Validation
Results from 268 surface and underground drill holes completed by Apogee and ASC
between 2002 and 2011, totaling 69,739 m of diamond drilling and 28807 core samples, were
received by Mercator in digital spreadsheet format from Apogee and were subsequently
complied and imported into GemcomSurpac ® Version 6.3.1 software. The final drill hole
accepted for the current resource estimate from the 2011 drill programs by Apogee was
11PUD266.
Validation checks on overlapping intervals, inconsistent drill hole identifiers, improper
lithological assignment, unreasonable assay value assignment, and missing interval data
were performed. Checking of database analytical entries was also carried out against
laboratory records supplied by Apogee. Of the 28,807 assay results in the drilling data set for
the property, 24,366 occur within the current resource outline and associated peripheral
interpolation domain.
14.3.3 Metal Pricing and Net Smelter Return (NSR) Calculation
The previous resource estimate by Mercator completed in October, 2011 used a NSR factor
and NSR shell wireframe to evaluate the polymetallic nature of mineralization at Pulacayo.
This was consistent with methods used in preceding historical resources estimates for the
deposit prepared by Micon. For the purpose of the current resource, silver, lead and zinc
grades were interpreted and modeled independently to better assess individual grade
distribution and continuity and to improve overall spatial confidence in grade interpolation. A
NSR factor was subsequently calculated from interpolated block grades within the sulphide
zone for reporting purposes.
NSR incorporates consideration of metallurgical, milling, and mining inputs. More specifically,
NSR is the calculated potential revenue that is returned from the smelter for the sale of
concentrate products. The NSR method recognizes that more than one metal, in this
circumstance Ag, Pb and Zn, can contribute to a potential revenue stream. It derives a
potential revenue value that accounts for such items as recovery to concentrate, metal
prices, payable fractions of the metals treatment, and refining charges, penalties, freight and
handling. By this means, in situ metal grades can be converted to potential revenues and a
cut-off grade can be identified as the estimated cost of all activities related to mining, mineral
processing and general administration.
John Starkey, P. Eng., of Starkey and Associates Inc., Consulting Metallurgical Engineers,
was retained by Apogee to develop a digital spreadsheet-based NSR calculator for the
current Pulacayo resource estimate. This calculator was reviewed by Mercator and accepted
for use in the resource estimation program. The following description of the NSR calculator is
a direct excerpt from the Starkey (2010) report to Apogee.
“The NSR calculation method used for Apogee Minerals’ Pulacayo Project was done using
basic principles and standard concepts taken from typical smelter contracts in the silver lead
zinc industry, to calculate the value of one ton of lead or zinc concentrate, shipped to either a
lead or a zinc smelter respectively.
To do this in a meaningful way, a metallurgical balance, based on the grade of ore in the
mine and metallurgical research to determine mill recoveries, was first done in order to
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