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that point, we really only needed a couple
more months to finish our desktop evalu-
ation and decide if we wanted to proceed
or not. Under the terms of the option
agreement, we would have had to make a
US $1.5 million cash payment to Nyrstar
as well as commit to another US $3 mil
-
lion expenditure on the project. We just
didn't feel that was warranted at that time
when we only needed a couple of months
to come to a decision. So we terminated the
option agreement and finished our evalua
-
tion. It was positive and so we negotiated
with Nyrstar for our complete buyout."
Nyrstar has agreed to be responsible for
certain reclamation work and outstand-
ing fines related to legacy tailings facilities
that they will undertake following clos-
ing, subject to agreed maximum amounts.
In addition, Nyrstar will maintain the
existing mine closure bond for three
years.
Archer said that the underground work-
ings need some attention. "Some areas are
not bad, other areas require a fair bit of
rehabilitation," he noted. "Also, there is
some equipment at the plant that needs
to be fixed up or replaced, so that will all
be part and parcel of the $25 million that
we currently estimate to bring the mine
back into production over a 12-18 month
period. As well, we will complete a fair
bit of underground and surface drilling to
update the resource."
The Coricancha Mine has historical
proven and probable reserves of 640,000
tonnes of 4.35 g/t gold, 149 g/t silver,
1.77% lead, 2.6% zinc and 0.32% copper,
for 13.5 million silver equivalent ounces.
Measured and indicated resources are
890,000 tonnes of 5.04 g/t gold, 175 g/t
silver, 1.97% lead, 3.11% zinc and 0.42%
copper, for 21.96 million silver equivalent
ounces (M&I resources are inclusive of
P&P reserves). Inferred resources are 4.9
million tonnes of 4.91 g/t gold, 225 g/t sil
-
ver, 1.57% lead, 2.98% zinc and 0.438%
copper, for 124.6 million silver equivalent
ounces.
"We'll be looking to update these
resources as soon as we can to NI 43-101
reporting standards," said Archer.
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