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Latest Press Release
A summary of the NI 43-101 Technical Report and Feasibility Study:
Win-Eldrich Mines Limited (WEX, TSX Venture Exchange) is pleased to announce the completion of a Canadian Securities Administrators National Instrument 43-101 compliant Technical Report and Feasibility Study (the "Technical Report") on the Ashdown molybdenum mine, located near Denio, Nevada. The Ashdown Mine is owned by Ashdown Project LLC, of which Golden Phoenix Minerals, Inc. is the majority owner (60%) and Win-Eldrich, through its wholly-owned subsidiary, Win-Eldrich Gold, Inc., is the minority owner (40%). The Ashdown Mine is a historic gold producer (1880s to 1942) and recent molybdenum sulfide concentrate producer (2005-2007). The purpose of the Technical Report was to determine mineable reserves for mine planning purposes. The projected reserve is based on historic (1979-2004) drilling and drifting and recent production.
Mineral reserve and resource estimates were compiled as of January 1, 2008. The following projections of tonnage, contained pounds and average grade from the NI 43-101 Report is based on a cut-off grade of 0.65% Mo. This cut-off grade is based on a projected Mo price of US$30 per pound in 2008 declining to US$22.5 per pound in 2011. These projections are in addition to production from 1983-2005 (approximately 37,000 lbs Mo) and 2006-2007 (approximately 403,000 lbs Mo). 2007 production confirmed the validity of projection reserves from historic drilling.
| Mineral Reserves: |
Classification Tons (Diluted) |
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| Pounds Mo Grade (%Mo) |
Proven 47,602 2,773,908 2.91
Probable 68,916 1,074,023 0.78 |
Totals 116,517 3,847,930 1.65 |
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| Mineral Resources: |
Classification Tons Pounds |
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| Mo Grade (%Mo) |
Measured 36,653 2,773,908 3.78
Indicated 145,063 2,710,618 0.93 |
Totals 181,716 5,484,525 1.51 |
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The Mineral Resources include Mineral Reserves. The difference between the Mineral Resource and the Mineral Reserve totals is the exclusion of the North Area from the Mineral Reserve estimate due to insufficient drill hole density.
Summary of Planned Mine Activities based on the reserve estimate:
Mine Life: 3.3 years beginning January 1, 2008 Milling Rate: 100 Tons per Day Tonnage Mined: 116,500 Tons (diluted) Processing recovery: 90% Molybdenum Recovered: 3,848,000 Pounds Average Operating Costs: $300 per Ton
An economic model was prepared for the Ashdown Mine based on the following assumptions for the base case: a declining molybdenum metal price from US$30.00 per pound in 2008 to US$22.50 per pound in 2011 (2007 average was US$31.30), a capital investment of US$5.35 million during this period, and mining of 116,500 tons of ore from the South Area of Ashdown, above the 4375 Level and north of 8,550N. Actual cost of operations in 2007 were used in the economic analysis. The life-of-mine average cost of producing a pound of Mo is US$10.10. This cost should decline as efficiency improves and if additional reserves are found. The model was prepared on a pre-tax basis, as the tax burdens are different for the US and Canadian partners of the Ashdown Mine. In the base case the Ashdown Mine has a Net Present Value (NPV) of US$35,322,829 at an 8% discount rate.
Ashdown Project Background:
The Ashdown Property is located about 110 miles northwest of Winnemucca and 10 miles southwest of Denio Junction in Humboldt County, Nevada. The Ashdown Property contains 293 unpatented lode claims covering about 9 square miles in the northern Pine Forest Range.
Following its discovery in the late 1800s, the Ashdown Property was mined for gold from high-grade veins, producing a reported 52,000 tons of ore averaging 0.31 ounces of gold per ton until it was closed in 1942. Mineralization on the Ashdown property is found in two large quartz veins hosted in Jurassic metasediments and a Cretaceous quartz diorite: the north-south trending, west dipping Sylvia Vein and the northwest-southeast trending, west dipping Main Vein. Vein true thickness averages about 7 feet.
From 1979 to 1994 approximately US$8 million in exploration and drilling was conducted on the Ashdown Property. During this period 293 reverse circulation and diamond core drill holes totaling 73,300 feet were drilled. In 1982 and 1983 a joint venture between American Copper and Nickel (ACNC), a subsidiary of INCO, and Outokumpu Mines, Inc. (OMI), a subsidiary of the Finnish mining company Outokumpu Oy, drove 1,800 feet of decline, cross cut and drift to obtain bulk samples of the molybdenite mineralization from the Sylvia Vein and drilled 31 underground diamond core drill holes totaling 5,909 feet to evaluate ground conditions and delineate the Sylvia Vein. Drilling has detected molybdenite mineralization from 105 feet to 630 feet below the surface over an area 840 feet wide by 1,800 feet long. Following a drop in molybdenum prices from $18 per pound to $3 per pound in 1983, the focus for ACNC and OMI and subsequent exploration companies changed to evaluating the gold mineralization.
With the sustained rise in molybdenum and gold prices in 2003, Golden Phoenix and Win-Eldrich agreed in February 2004 to work towards forming a joint venture to develop the mineral resources located at the Ashdown Mine. In 2004 Golden Phoenix drilled nine drill holes to confirm the molybdenum mineralization and in 2005 started reopening the Sylvia decline and commenced construction of the Morris flotation mill. In 2005, Win-Eldrich milled approximately 2000 tons of ore that had been mined and stockpiled in 1983, producing about 37,000 lbs of Mo for an average price of about US$25 per pound. Ashdown Project LLC was formed by the two companies on September 28, 2006 to formalize their business relationship. The Sylvia Sill Drift was reached in September 2006 and mining and milling operations commenced in November. The Ashdown Mine began producing a salable molybdenum concentrate in December 2006 and has been mining molybdenum from the Ashdown Mine and concentrating the ore in the Morris Mill more or less continuously since then. In 2007, 18,151 tons of ore were milled and 395,634 pounds of molybdenum were produced and sold for an average price of approximately US$31 per pound.
Exploration Potential:
The potential to discover significant new resources outside of the current reserve area is excellent. The nature of this potential can be divided into three broad categories. The first is the possibility of converting vacant blocks within in the current ore reserve model to reserves. These blocks were excluded from the reserves due to the low density of drilling and/or to large gaps in drilling between mineralized blocks. The second area is the down dip and strike extensions of the Sylvia and Main veins (below 450 feet and both north and south of the 1,800 feet of strike length of the current reserve model). The third area is regional: anomalous molybdenite geochemistry has been demonstrated in wide-spaced drilling, rock-chip samples and in soil samples over a three mile length along the projected strike of the currently defined reserve. In addition, a few drill holes intercepted vein mineralization similar to that in the Sylvia Vein, but the extent of these veins or their relationship to the Sylvia or Main veins cannot be determined due to the limited exploration drilling on the property.
The project area as a whole is at a very early stage of its development from an exploration standpoint, with most of the work on the molybdenum mineralization being geographically limited to a very small footprint (7 acres) within a large claim area (6000 acres). The Technical Report recommends an exploration program that is intended to determine whether current drill indicated mineral resources may be upgraded to the proven reserve category, and to identify the extent of mineralization beyond the margins of the known resource, both down dip and along strike, as described above.
A copy of the Technical Report will be made available by Win-Eldrich on SEDAR at www.sedar.com.
Molybdenum prices have stabilized in the low $30 per pound range. World wide demand for moly continues to be strong due to rapid expansion of the Chinese and Indian economies so this price is expected to hold for a while.
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