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
15 MINERAL RESERVES
15.1 Introduction
To convert Mineral Resources to Mineral Reserves, minable stopes were designed within the
mineralized zone. These stopes have sufficient widths to be accessed and practically mined
with the selected mining method and equipment fleet. A mining recovery and dilution factor
has been included. Only Indicated Mineral Resource material has been converted to
Reserves. This deposit does not contain Measured Mineral Resource material. Any Inferred
material within the designed stopes is treated as waste and allocated a mineralization grade
of zero.
15.2 Methodology
Two mining methods will be utilized at Pulacayo, shrinkage stoping and longhole open
stoping. The stope widths vary from 3 m to 6 m, depending on the mining method and width
of mineralization. Mining losses total 9% for the ore body. This includes material lost to the
existing mine workings. Mining dilution is 8%. It is anticipated that 8% of the material mined
will be unplanned waste from blasting overbreak and possible contamination from the
existing stopes.
The geological block model was provided by Mercator Geological Services, based in
Dartmouth Canada. The model was created in Surpac and converted into Datamine format
by TWP for mine planning. The mine planning model is based on the original file received
from Mercator called ‘pulacayo2012.mdl’. The model is rotated by ten degrees in the
clockwise direction and contains 4,098,653 blocks. The parent block size is 5 m in the X
direction by 3 m in the Y direction by 3 m in the Z direction. The minimum sub-cell size is half
of the parent cell dimensions. Rock density has been interpolated in the block model.
15.3 Stope Generation and Mining Cut-off Grades
Potentially economic portions of the mineralization were founded on operating costs provided
by Apogee. TWP Sudamerica S.A has reviewed these costs and consider them to be
reasonable given TWP's recent reserve estimating experience in Peru and across Africa.
Several factors were used to determine if a stope was viable and economic to mine. The first
criterion was the average grade for the stope must be above 150 g/t silver. Because the
Pulacayo deposit is polymetalic, there is potential for the stope optimisation software (MSO)
to draw revenue from stopes that have a low silver grade, but high lead and zinc grades.
Using the silver grade cut-off of 150 g/t forces the model to remain silver focused by first
seeking to exploit the stopes with higher silver grades.
The second criterion is that the stope must have an NSR greater than US$ 70/t. US$ 70/t is
the economic breakeven value of a block. See the calculation of NSR in the table below.
Using the NSR instead of an individual grade allowed flexibility in the ratios of silver, lead and
zinc, while still keeping silver as the main commodity through the silver cut-off grade.
TWP Sudamérica S.A. Av. Encalada 1257 Of. 801, Santiago de Surco Lima 33, Perú (51-1) 4377473
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